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, 1999
-----------------
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, 1999
-----------------------------------------------
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,
1999 1999
(Unaudited)
(Audited)
ASSETS ------------
- ----------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $105,666,515
$108,418,478
OTHER ASSETS
Cash and cash equivalents 1,701,145
1,693,799
Investments 2,317,166
2,237,166
Notes receivable 1,364,322
1,364,322
Deferred acquisition costs,
net of accumulated amortization (Note B) 1,587,245
1,612,244
Organization costs, net of
accumulated amortization (Note B) -
170
Other assets 2,574,600
2,459,125
----------- ---
- --------
$115,210,993
$117,785,304
===========
===========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 53,060 $
4,553
Accounts payable affiliates 12,142,535
11,385,333
Capital contributions payable (Note D) 1,595,177
1,595,177
----------- -
- ----------
13,790,772
12,985,063
----------- -
- ----------
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, 1999 102,295,679
105,641,899
General Partner (875,458)
(841,658)
----------- -
- ----------
101,420,221
104,800,241
----------- -
- ----------
$115,210,993
$117,785,304
===========
===========
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,
1999
1999
(Unaudited)
(Audited)
ASSETS -----------
- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $13,628,532
$14,142,163
OTHER ASSETS
Cash and cash equivalents 325,879
306,884
Investments 128,028
128,028
Notes receivable 32,170
32,170
Deferred acquisition costs,
net of accumulated amortization (Note B) 244,396
247,024
Organization costs, net of
accumulated amortization (Note B) -
- -
Other assets 809,244
807,527
---------- --
- --------
$15,168,249
$15,663,796
==========
==========
LIABILITIES
Accounts payable and accrued
expenses (Note C) $ 14,066 $
1,145
Accounts payable affiliates 3,293,925
3,155,784
Capital contributions payable (Note D) 32,922
32,922
---------- ---
- -------
3,340,913
3,189,851
---------- --
- --------
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, 1999 12,041,734
12,681,877
General Partner (214,398)
(207,932)
---------- ----
- ------
11,827,336
12,473,945
---------- ----
- ------
$15,168,249
$15,663,796
==========
==========
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,
1999 1999
(Unaudited) (Audited)
ASSETS -----------
- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $26,335,478
$27,165,227
OTHER ASSETS
Cash and cash equivalents 221,893
213,451
Investments 884,449
884,449
Notes receivable -
- -
Deferred acquisition costs
net of accumulated amortization (Note B) 391,808
396,021
Organization costs, net of
accumulated amortization (Note B) -
- -
Other assets 144,857
133,695
---------- ----
- ------
$27,978,485
$28,792,843
==========
==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 12,260 $
- -
Accounts payable affiliates 2,900,062
2,727,066
Capital contributions payable (Note D) 142,506
142,506
---------- ----
- -----
3,054,828
2,869,572
----------
- ---------
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, 1999 25,141,029
26,130,647
General Partner (217,372)
(207,736)
Unrealized gain (loss) on securities
available for sale, net -
- -
---------- ----
- ------
24,923,657
25,923,271
---------- ----
- ------
$27,978,485
$28,792,843
==========
==========
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,
1999
1999
(Unaudited)
(Audited)
ASSETS -----------
- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $24,164,420
$24,774,196
OTHER ASSETS
Cash and cash equivalents 358,200
349,189
Investments 100,000
100,000
Notes receivable 1,332,152
1,332,152
Deferred acquisition costs
net of accumulated amortization (Note B) 345,985
357,648
Organization costs, net of
accumulated amortization (Note B) -
- -
Other assets 1,526,894
1,425,347
---------- ---
- -------
$27,827,651
$28,338,532
==========
==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 10,027 $
- -
Accounts payable affiliates 3,283,658
3,035,918
Capital contributions payable (Note D) 1,367,195
1,367,195
---------- --
- --------
4,660,880
4,403,113
---------- ----
- ------
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, 1999 23,364,783
24,125,744
General Partner (198,012)
(190,325)
---------- ---
- -------
23,166,771
23,935,419
----------
- ----------
$27,827,651
$28,338,532
==========
==========
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,
1999
1999
(Unaudited)
(Audited)
ASSETS ------------
- ----------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $18,490,176
$18,832,106
OTHER ASSETS
Cash and cash equivalents 304,262
306,065
Investments 230,531
230,531
Notes receivable -
- -
Deferred acquisition costs,
new of accumulated amortization (Note B) 266,303
269,156
Organization costs, net of
accumulated amortization (Note B) -
- -
Other assets 58,943
56,099
---------- ---
- -------
$19,350,215
$19,693,957
==========
==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 7,310 $
- -
Accounts payable affiliates 1,450,476
1,354,989
Capital contributions payable (Note D) 18,554
18,554
----------
- ---------
1,476,340
1,373,543
---------- -
- --------
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, 1999 18,005,363
18,447,437
General Partner (131,488)
(127,023)
---------
- ---------
17,873,875
18,320,414
---------
- ---------
$19,350,215
$19,693,957
==========
==========
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,
1999
1999
(Unaudited)
(Audited)
ASSETS ------------
- ----------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $23,047,909
$23,504,786
OTHER ASSETS
Cash and cash equivalents 490,911
518,210
Investments 974,158
894,158
Notes receivables -
- -
Deferred acquisition costs,
net of accumulated amortization (Note B) 338,753
342,395
Organization costs, net of
accumulated amortization (Note B) -
170
Other assets 34,662
36,457
--------- --
- --------
$24,886,393
$25,296,176
==========
==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 9,397 $
3,408
Accounts payable affiliates 1,214,414
1,111,576
Capital contributions payable (Note D) 34,000
34,000
---------
- ---------
1,257,811
1,148,984
---------
- ---------
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, 1999 23,742,770
24,256,194
General Partner (114,188)
(109,002)
---------- -----
- -----
23,628,582
24,147,192
---------- --
- --------
$24,886,393
$25,296,176
==========
==========
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)
1999 1998
---- ----
Income
Interest income $ 59,471 $ 76,746
Other Income 300 -
--------- ---------
59,771 76,746
Share of loss from Operating
Partnerships (Note D) (2,714,397)
(3,909,238)
--------- ---------
Expenses
Professional fees 52,887 35,385
Fund management fee (Note C) 595,028 560,837
Amortization 25,169 52,024
General and administrative expenses 52,310 75,452
--------- ---------
725,394 723,698
--------- ---------
NET LOSS $(3,380,020)
$(4,556,190)
========== ==========
Net loss allocated to limited
partners $(3,346,220)
$(4,510,627)
========== ==========
Net loss allocated general
partner $ (33,800) $
(45,563)
========== ==========
Net loss per BAC $ (.74) $
(1.02)
========== ==========
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
- -----------------------
1999
1998
----
- ----
Income
Interest income $ 13,494 $
2,631
-------
- -------
Share of loss from Operating
Partnerships (512,749)
(598,423)
-------
- -------
Expenses
Professional fees 14,598
- -
Fund management fee (Note C) 119,516
116,938
Amortization 2,628
2,628
General and administrative expenses 10,612
25,757
-------
- -------
147,354
145,323
-------
- -------
NET LOSS $(646,609)
$(741,115)
========
========
Net loss allocated to limited
partners $(640,143)
$(733,704)
========
========
Net loss allocated to general
partner $ (6,466) $
(7,411)
========
========
Net loss per BAC $ (.16) $
(.19)
========
========
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
- ------------------------
1999
1998
----
- ----
Income
Interest income $ 12,322 $
29,750
Other Income 150
- -
------- -
- -------
12,472
29,750
Share of loss from Operating
Partnerships (829,749)
(1,081,720)
------- --
- -------
Expenses
Professional fees 12,260
13,793
Fund management fee (Note C) 152,827
136,688
Amortization 4,213
13,107
General and administrative expenses 13,037
4,214
------- -
- -------
182,337
167,802
------- -
- -------
NET LOSS $(999,614)
$(1,219,772)
========
==========
Net loss allocated to limited
partners $(989,618)
$(1,207,574)
========
==========
Net loss allocated to general
partner $ (9,996) $
(12,198)
========
==========
Net loss per BAC $ (.18) $
(.22)
========
==========
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
- ------------------------
1999
1998
------
- ------
Income
Interest income $ 4,617 $
1,746
Other Income 150
- -
--------- --
- -------
4,767
1,746
Share of loss from Operating
Partnerships (605,664)
(957,936)
--------- --
- -------
Expenses
Professional fees 10,811
12,819
Fund management fee (Note C) 132,841
118,167
Amortization 11,662
21,595
General and administrative expenses 12,437
11,806
--------- --
- -------
167,751
164,387
--------- --
- -------
NET LOSS $ (768,648)
$(1,120,577)
==========
==========
Net loss allocated to limited
partners $ (760,961)
$(1,109,371)
==========
==========
Net loss allocated to general
partner $ (7,687) $
(11,206)
==========
==========
Net loss per BAC $ (.15) $
(.22)
==========
==========
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
- ----------------------
1999
1998
----
- ----
Income
Interest income $ 4,481 $
18,255
-------
- -------
Share of loss from Operating
Partnerships (340,799)
(506,989)
-------
- -------
Expenses
Professional fees 9,123
- -
Fund management fee (Note C) 90,457
88,707
Amortization 2,853
10,542
General and administrative expenses 7,788
14,774
-------
- -------
110,221
114,023
-------
- -------
NET LOSS $(446,539)
$(602,757)
========
========
Net loss allocated to limited
partners $(442,074)
$(596,729)
========
========
Net loss allocated to general
partner $ (4,465) $
(6,028)
========
========
Net loss per BAC $ (.12) $
(.17)
========
========
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
- ----------------------
1999
1998
----
- ----
Income
Interest income $ 24,557 $
24,364
-------
- ------
Share of loss from Operating
Partnerships (425,436)
(764,170)
-------
- -------
Expenses
Professional fees 6,095
8,773
Fund management fee (Note C) 99,387
100,337
Amortization 3,813
13,045 General and administrative expenses 8,436
10,008
-------
- -------
117,731
132,163
-------
- -------
NET LOSS $(518,610)
$(871,969)
========
========
Net loss allocated to limited
partners $(513,424)
$(863,249)
========
========
Net loss allocated to general
partner $ (5,186) $
(8,720)
========
========
Net loss per BAC $ (.13) $
(.22)
========
========
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, 1999
(Unaudited)
Unrealized
gain (loss) on
securities
available
General for
Assignees Partner sale, net Total
--------- ------- --------- -----
Partners' capital
(deficit)
April 1, 1999 $105,641,899 $(841,658) $ - $104,800,241
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - - -
Net income (loss) (3,346,220) (33,800) - (3,380,020)
---------- ------- ------ ----------
Partners' capital
(deficit),
June 30, 1999 $102,295,679 $(875,458) $ - $101,420,221
=========== ======== ======= ===========
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, 1999
(Unaudited)
Unrealized
gain (loss) on
securities
available
General for
Assignees Partner sale,net Total
--------- ------- -------- -----
Series 15
- ---------
Partners' capital
(deficit),
April 1, 1999 $12,681,877 $ (207,932) $ - 12,473,945
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - - -
Net income (loss) (640,143) (6,466) - (646,609)
--------- ------- --------- --------
Partners' capital
(deficit),
June 30, 1999 $12,041,734 $ (214,398) $ - $11,827,336
========== ======== ========== ==========
Series 16
- ---------
Partners' capital
(deficit),
April 1, 1999 $26,130,647 $ (207,376) $ - $25,923,271
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - - -
Net income (loss) (989,618) (9,996) - (999,614)
---------- ------- -------- ---------
Partners' capital
(deficit),
June 30, 1999 $25,141,029 $ (217,372) $ - $24,923,657
========== ======== ========= ==========
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, 1999
(Unaudited)
Unrealized
gain (loss) on
securities
available
General for
Assignees Partner sale,net
Total
--------- ------- --------
- -----
Series 17
- ---------
Partners' capital
(deficit),
April 1, 1999 $24,125,744 $(190,325) $ -
$23,935,419
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - -
- -
Net income (loss) (760,961) (7,687) -
(768,648)
--------- -------- ------- --
- --------
Partners' capital
(deficit),
June 30, 1999 $23,364,783 $(198,012) $ -
$23,166,771
========== ======== =========
==========
Series 18
- ---------
Partners' capital
(deficit),
April 1, 1999 $18,447,437 $(127,023) $ -
$18,320,414
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - -
- -
Net income (loss) (442,074) (4,465) -
(446,539)
---------- -------- ------- --
- -------
Partners' capital
(deficit),
June 30, 1999 $18,005,363 $(131,488) $ -
$17,873,875
========== ======= =========
==========
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, 1999
(Unaudited)
Unrealized
gain (loss) on
securities
available
General for
Assignees Partner sale,net
Total
-------- ------- --------
- -----
Series 19
- ---------
Partners' capital
(deficit),
April 1, 1999 $24,256,194 $(109,002) $ -
$24,147,192
Net change in
unrealized gain
(loss) on secur-
ities available
for sale - - -
- -
Net income (loss) (513,424) (5,186) -
(518,610)
---------- ------- --------
- --------
Partners' capital
(deficit),
June 30, 1999 $23,742,770 $(114,188) $ -
$23,628,582
========== ======== ==========
==========
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)
1999
1998
----
- ----
Cash flows from operating activities:
Net loss $ (3,380,020) $
(4,556,190)
Adjustments
Distributions from Operating
Partnerships 37,565
9,244
Amortization 25,170
52,024
Share of loss from Operating
Partnerships 2,714,397 3,909,238
Changes in assets and liabilities
(Decrease) Increase in accounts
payable and accrued expenses 380,778
4,793
Decrease (Increase) in accounts
receivable (115,475)
(77,932)
Decrease (Increase) in accounts
payable affiliates 424,931
784,429
---------
- --------
Net cash (used in) provided by
operating activities 87,346
125,606
---------
- --------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire -
- -
Capital contributions paid to
Operating Partnerships -
(154,714)
Advances to Operating Partnerships -
(98,934)
Investments (80,000)
118,740
--------- -
- -------
Net cash (used in) provided by
investing activities (80,000)
134,908
---------
- --------
17
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
1999
1998
----
- ----
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 7,346
(9,302)
--------- -
- --------
Cash and cash equivalents, beginning 1,693,799
1,653,522
--------- -
- --------
Cash and cash equivalents, ending $ 1,701,145 $
1,644,220
==========
==========
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
- -------------------------
1999
1998
----
- ----
Cash flows from operating activities:
Net loss $ (646,609) $
(741,115)
Adjustments
Distributions from Operating
Partnerships 882
861
Amortization 2,628
2,628
Share of loss from Operating
Partnerships 512,749
598,423
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 12,921
2,005
Decrease (Increase) in accounts
receivable (1,717)
(1,688)
Decrease (Increase) in accounts
payable affiliates 138,141
235,696
------- -
- ------
Net cash (used in) provided by
operating activities 18,995
96,810
------- -
- ------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire -
- -
Capital contributions paid to Operating
Partnerships -
- -
Advances to Operating Partnerships -
(98,934)
Investments -
- -
------- -
- ------
Net cash (used in) provided by
investing activities -
(98,934)
------- -
- ------
19
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 15
- ----------------------
1999
1998
----
- ----
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 18,995
(2,124)
Cash and cash equivalents, beginning 306,884
156,717
------- -
- ------
Cash and cash equivalents, ending $ 325,879 $
154,593
========
========
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 $ (999,614)
$(1,219,772)
Adjustments
Distributions from Operating
Partnerships
607
Amortization 4,214
4,214
Share of loss from Operating
Partnerships 829,749
1,081,720
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 12,260
494
Decrease (Increase) in accounts
receivable (11,162)
(14,053)
Decrease (Increase) in accounts
payable affiliates 172,995
172,990
---------
- --------
Net cash (used in) provided by
operating activities 8,442
26,200
---------
- --------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire -
- -
Capital contributions paid to Operating
Partnerships -
- -
Advances to Operating Partnerships -
- -
Investments -
- -
---------
- --------
Net cash (used in) provided by
investing activities -
- -
---------
- --------
21
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 16
- -----------------------
1999 1998
-----
- -----
Continued
- ---------
Cash flows from financing activity:
Credit adjusters received from
Operating Partnerships -
- -
---------
- --------
Net cash (used in) provided by
financing activity -
- -
---------
- --------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 8,442
26,200
Cash and cash equivalents, beginning 213,451
199,558
---------
- --------
Cash and cash equivalents, ending $ 221,893 $
225,758
==========
==========
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
- -------------------------
1999
1998
----
- ----
Cash flows from operating activities:
Net loss $ (768,648)
$(1,120,577)
Adjustments
Distributions from Operating
Partnerships 4,113
7,776
Amortization 11,662
21,595
Share of loss from Operating
Partnerships 605,664
957,936
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 342,298
- -
Decrease (Increase) in accounts
receivable (101,547)
(32,983)
Decrease (Increase) in accounts
payable affiliates (84,531)
177,418
---------
- --------
Net cash (used in) provided by
operating activities 9,011
11,165
---------
- --------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire -
- -
Capital contributions paid to Operating
Partnerships -
- -
Advances to Operating Partnerships -
- -
Investments -
- -
---------
- --------
Net cash (used in) provided by
investing activates -
- -
---------
- --------
23
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 17
- ------------------------
1999 1998
---- ----
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 9,011
11,165
Cash and cash equivalents, beginning 349,189
388,024
---------
- --------
Cash and cash equivalents, ending $ 358,200 $
399,189
==========
==========
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
- -------------------------
1999
1998
----
- ----
Cash flows from operating activities:
Net loss $ (446,539) $
(602,757)
Adjustments
Distributions from Operating
Partnerships 1,130
- -
Amortization 2,853
10,542
Share of loss from Operating
Partnerships 340,799
506,989
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 7,310
294
Decrease (Increase) in accounts
receivable (2,844)
(18,118)
Decrease (Increase) in accounts
payable affiliates 95,488
95,488
---------
- -------- Net cash (used in) provided by
operating activities (1,803)
(7,562)
---------
- --------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire -
- -
Capital contributions paid to Operating
Partnerships -
(154,714)
Advances to Operating Partnerships -
- -
Investments -
125,000
---------
- --------
Net cash (used in) provided by
investing activities -
(29,714)
---------
- --------
25
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 18
- -----------------------
1999 1998
---- ----
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 (1,803)
(37,276)
Cash and cash equivalents, beginning 306,065
301,444
--------
- --------
Cash and cash equivalents, ending $ 304,262 $
264,168
=========
==========
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
- -------------------------
1999
1998
----
- ----
Cash flows from operating activities:
Net loss $ (518,610) $
(871,969)
Adjustments
Distributions from Operating
Partnerships 31,440
- -
Amortization 3,813
13,045
Share of loss from Operating
Partnerships 425,436
764,170
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 5,989
2,000
Decrease (Increase) in accounts
Receivable/ other assets 1,795
(11,090)
Decrease (Increase) in accounts
payable affiliates 102,838
102,837
---------
- --------
Net cash (used in) provided by
operating activities 52,701
(1,007)
---------
- --------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire -
- -
Capital contributions paid to Operating
Partnerships -
- -
Advances to Operating Partnerships -
- -
Investments (80,000)
(6,260)
---------
- --------
Net cash (used in) provided by
investing activities (80,000)
(6,260)
--------- -
- -------
27
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 19
- ------------------------
1999 1998
---- ----
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 (27,299)
(7,267)
Cash and cash equivalents, beginning 518,210
607,779
---------
- --------
Cash and cash equivalents, ending $ 490,911 $
600,512
==========
==========
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, 1999
(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, 1999
(Unaudited)
NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein as of
June 30, 1999 and for the three months then ended have been
prepared by the Fund, without audit. The Fund accounts for its
investments in Operating Partnerships using the equity method,
whereby the Fund adjusts its investment cost for its share of
each Operating Partnership's results of operations and for any
distributions received or accrued. Costs incurred by the Fund in
acquiring the investments in the Operating Partnerships are
capitalized to the
investment account. The Fund's accounting and financial
reporting policies are in conformity with generally accepted
accounting principles and include adjustments in interim periods
considered necessary for a fair presentation of the results of
operations. Such adjustments are of a normal recurring nature.
Investment Securities
- ---------------------
The Fund has determined that all of it's investment
securities are to be categorized as securities available for
sale. Securities classified as available for sale are those debt
securities that the Fund purchased that may be liquidated prior
to the maturity date should the need arise. These securities are
carried an approximate fair market value.
The amortized cost of securities available for sale as of
June 30, 1999 by contractual maturity are as follows:
Amortized
Cost
---------
Due in one year or less $2,317,166
Due after one year -
---------
Total $2,317,166
=========
The fair market value of the securities is $2,317,166.
30
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1999
(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, 1999 and 1998 the Fund has accumulated organization
amortization totaling $934,428 and $894,093 respectively. The
breakdown of accumulated organization amortization within the
Fund as of June 30, 1999 and 1998 is as follows:
1999 1998
---- ----
Series 15 $167,077 $167,077
Series 16 227,909 227,909
Series 17 205,888 205,016
Series 18 150,296 139,212
Series 19 183,258 154,879
------- -------
$934,428 $894,093
======= =======
On July 1, 1995, the Fund began amortizing unallocated
acquisition costs over 330 months from April 1, 1995. As of June
30, 1999 the Fund has
accumulated unallocated acquisition amortization totaling
$306,091. The
breakdown of accumulated unallocated acquisition amortization
within the fund
as of June 30, 1999 for Series 15, Series 16, Series 17, Series
18, and
Series 19 is $44,774, $71,620, $81,765, $48,636 and $59,296,
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 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,
1999 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, 1999
(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. The fund management fees accrued for the
quarter ended June 30, 1999 and 1998 are as follows:
1999 1998
---- ----
Series 15 $137,013 $137,013
Series 16 172,995 172,995
Series 17 141,342 141,342
Series 18 95,487 95,487
Series 19 102,837 102,837
------- -------
$649,674 $649,674
======= =======
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS
At June 30, 1999 and 1998, 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, 1999 and 1998 is as
follows:
Series 15 68
Series 16 64
Series 17 49
Series 18 34
Series 19 26
---
241
===
32
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1999
(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, 1999 and 1998
are as follows:
1999 1998
---- ----
Series 15 $ 32,922 $ 32,922
Series 16 142,506 145,311
Series 17 1,367,195 1,367,195
Series 18 18,554 562,921
Series 19 34,000 463,000
--------- ----------
$1,595,177 $ 2,571,349
========= ==========
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,
1999.
33
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 15
- ---------------------------
1999 1998
---- ----
Revenues
Rental $ 2,427,558 $
2,361,861
Interest and other 83,133
108,691
--------- --
- -------
2,510,691
2,470,552
--------- -
- --------
Expenses
Interest 694,218
716,760
Depreciation and amortization 954,000
929,837
Operating expenses 1,546,183
1,510,079
--------- -
- --------
3,194,401
3,156,676
--------- ---
- ------
NET LOSS $ (683,710) $
(686,124)
=========
=========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $ (512,749) $
(598,423)
=========
=========
Net loss allocated to other
partners $ (6,837) $
(6,861)
=========
=========
Net loss suspended $ (164,124) $
(80,840)
=========
=========
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, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 16
- --------------------------
1999 1998
---- ----
Revenues
Rental $ 3,085,327 $
2,967,061
Interest and other 142,545
233,688
---------
- ---------
3,227,872
3,200,749
---------
- ---------
Expenses
Interest 927,227
1,030,920
Depreciation and amortization 1,209,040
1,159,007
Operating expenses 2,027,128
2,123,215
---------
- ---------
4,163,395
4,313,142
---------
- ---------
NET LOSS $ (935,523)
$(1,112,393)
==========
==========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $ (829,749)
$(1,081,720)
==========
==========
Net loss allocated to other
partners $ (9,355) $
(30,673)
==========
==========
Net loss suspended $ (96,419) $
- -
==========
==========
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.
35
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three Months ended March 31,
(Unaudited)
Series 17
- --------------------------
1999 1998
Revenues ---- ----
Rental $ 2,737,626 $
2,610,299
Interest and other 87,828
163,805
--------- -
- --------
2,825,454
2,774,104
--------- -
- --------
Expenses
Interest 915,328
1,032,783
Depreciation and amortization 911,848
1,132,381
Operating expenses 1,610,060
1,576,552
--------- -
- --------
3,437,236
3,741,716
--------- -
- --------
NET LOSS $ (611,782) $
(967,612)
==========
=========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $ (605,664) $
(957,936)
==========
=========
Net loss allocated to other
partners $ (6,118) $
(9,676)
==========
=========
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.
36
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1999
(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 $ 1,610,813
$1,526,479
Interest and other 86,695
57,354
--------- -
- --------
1,697,508
1,583,833
--------- -
- --------
Expenses
Interest 457,470
549,159
Depreciation and amortization 623,236
681,994
Operating expenses 974,916
877,378
--------- -
- --------
2,055,622
2,108,531
--------- -
- --------
NET LOSS $ (358,114) $
(524,698)
=========
=========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $ (340,799) $
(506,989)
=========
=========
Net loss allocated to other
partners $ (3,581) $
(5,247)
=========
=========
Net loss suspended $ (13,734) $
(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, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 19
- --------------------------
1999 1998
Revenues ---- ----
Rental $ 2,261,354 $
2,172,136
Interest and other 77,908
59,513
--------- -
- --------
2,339,262
2,231,649
--------- --
- -------
Expenses
Interest 843,587
881,904
Depreciation and amortization 703,864
984,268
Operating expenses 1,221,544
1,137,366
--------- --
- -------
2,768,995
3,003,538
--------- -
- --------
NET LOSS $ (429,733) $
(771,889)
=========
=========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $ (425,436) $
(764,170)
=========
=========
Net loss allocated to other
partners $ (4,297) $
(7,719)
=========
=========
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.
38
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 1999
(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, 1999 and March
31, 1998 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 year ended December 31, 1999
is expected to differ from its loss for financial reporting
purposes for the year end March 31, 2000. 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, 1999, 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
30,1999.
(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, 1999, none of Series 16
net
offering proceeds had been used to pay capital contributions.
Series 16 net offering proceeds in the amount of $142,506 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, 1999.
(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, 1999, none of Series 17
net offering proceeds had been used to pay capital contributions.
Series 17 net offering proceeds in the amount of $458,200 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, 1999.
(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, 1999, none of Series 18
net offering proceeds had been used to pay capital contributions.
Series 18 net offering proceeds in the amount of $18,554 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, 1999.
(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, 1999, none of Series 19
net
offering proceeds had been used to pay capital contributions.
Series 19 net offering proceeds in the amount of $34,000 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, 1999.
Results of Operations
- ---------------------
As of June 30, 1999 and 1998 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
41
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 June 30, 1999. 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 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,
1999 for Series 15, Series 16, Series 17, Series 18 and Series 19
were $119,516, $152,827, $132,841, $90,457, and $99,387
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 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, 1999 and 1998, the average qualified
occupancy for the series was 100% for both years. The series had
a total of 68 properties at June 30, 1999, 68 of which were at
100% qualified occupancy.
For the three months being reported Series 15 reflects a net
loss from Operating Partnerships of $683,710. When adjusted for
depreciation, which is a non-cash item, the Operating
Partnerships reflect positive operations of $270,290. This is an
interim period estimate; it is not necessarily indicative of the
final year end results.
42
The Operating General Partner of Hidden Cove Apartments
(Hidden Cove) continues to incur operating deficits due to high
operating expenses. While the new management company has been
successful in reducing the deficits by reducing expenses, the
property remains unable to operate above break-even. The
Operating General Partner has been funding a capital improvement
plan established by the new management company in hopes of
improving the property's appeal. Average physical occupancy at
the property remains at 98%. To date the Operating General
Partner has been unsuccessful in securing refinancing through
local lenders. During the completion of the 1998 audit, the
Operating General Partner was notified by the lender that
mortgage interest had not been accruing at the proper rate. As
such, an adjustment was made to correct the outstanding principal
and interest balances.
The Operating General Partner of School Street I Limited
Partnership (School Street Apts. I) hired a new management
company in October 1998 in order to improve operations at the
property. The average occupancy reached 93% during the second
quarter of 1999. In addition, the debt was modified in January,
1999 reducing the interest rate to 7.25% and the loan was written
down. Capital needs were addressed as part of the refinancing
package and all repair work will be completed as of December 31,
1999.
(Series 16) As of June 30, 1999 and 1998, the average qualified
occupancy for the series was 99.6% for both years. The series had
a
total of 64 properties at June 30, 1999. 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 $935,523. When adjusted for
depreciation, which is a non-cash item, the Operating
Partnerships reflect positive operations of $273,517. This is an
interim period estimate; it is not necessarily indicative of the
final year end results.
The management company assumed the role of 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) as of March 1, 1999. The new
Operating General Partner continues to focus on reducing the
property's operating expenses and reducing vacancies. The
Operating General Partner completed a loan restructure reducing
the interest rate on the mortgage to 8%. In addition, a second
mortgage at a 5.5% interest rate was closed. This mortgage was
approved by the Investment Limited Partner and will be used to
fund capital needs. The second quarter average occupancy reached
99%.
43
(Series 17) As of June 30, 1999 and 1998, the average qualified
occupancy for the series was 99.7% for both years. The series
had a
total of 49 properties at June 30, 1999. 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 $611,782. When adjusted for
depreciation, which, is a non-cash item, the Operating
Partnerships reflect positive operations of $300,066. This is an
interim period estimate; it is not necessarily indicative of the
final year end results.
Annadale Housing Partners (Kingsview Manor & Estates) has
reported net losses due to operational issues associated with the
property. Decreasing occupancy during the quarter and economic
factors relevant to the marketplace prevent the necessary rental
income from being generated to cover the operational expenses.
In order to address these issues, the Operating General Partner
has hired a consultant to assist management in aggressively
marketing the property. In addition, the management agent has
hired a new on-site manager and leasing agent. The rental rates
at the property were increased during the last quarter of 1998.
In a step to cut costs even further the Operating General Partner
has initiated loan restructure discussions with the first lender
for more favorable terms. These talks are currently ongoing and
the outcome cannot be determined at this time. The Investment
General Partner continues to monitor this situation closely.
Occupancy is 89% as of June 30, 1999.
The property owned by California Investors VI L.P. (Orchard
Park) has increased its physical occupancy from 91% as of March
31, 1999 to 99% as of June 30, 1999. The increased occupancy is
the result of the management company's aggressive marketing
efforts. The Operating General Partner, with the assistance of a
consultant, developed a new marketing campaign, which was
implemented during the last quarter of 1998. In addition, the
management company replaced the site manager and leasing agent.
A large recreation facility is expected to be built adjacent to
the property at the end of 1999. Once this park is opened, it is
expected to further enhance the appeal of Orchard Park Apartments
to families.
44
(Series 18) As of June 30, 1999 and 1998 the average qualified
occupancy for the series was 100% and 99.9%, respectively. The
series had a total of 34 properties at June 30, 1999, out of the
total all had 100% qualified occupancy.
For the three months being reported Series 18 reflects a net
loss from Operating Partnerships of $358,114. When adjusted for
depreciation, which is a non-cash item, the Operating
Partnerships reflect positive operations of $265,121. 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. A judgment was issued which will remove any
uncertainty as to the Operating Partnership's possession of the
land. The appropriate title information has been received and
is in the process of execution. Additionally, occupancy started
to drop in the fourth quarter of 1998, with a year-end physical
occupancy of 78%. A new management company, selected by the
Investment General Partner, is to begin at the site in mid
August. This new management company will focus on improving
occupancy, collections, and tenant retention. Periodic cash
shortfalls are anticipated until the occupancy stabilizes and
maintenance expenses are reduced.
Parvin's Limited Partnership (Parvin's Branch Townhomes)
continues to incur operating deficits due to higher than average
operating expenses and occupancy issues with its six transitional
units. The General Partner and the Management Company have been
deferring their respective fees to improve the property's cash
flow. In addition, the General Partner continues to fund
deficits. The property's 18 non-transitional housing units
operate with a strong occupancy, however, the six transitional
units incur significant turnover , which results in increased
operating expense. The Investment General Partner has been in
contact with the Operating General Partner to determine how to
improve the situation. The Operating General Partner has taken a
more active role in the leasing and day to day management of the
six transitional units. In addition, the Operating General
Partner is working to have the six units removed form the
transitional program. This should give the property the
opportunity to lease the units to long-term qualified residents.
45
(Series 19) As of June 30, 1999 and 1998 the average qualified
occupancy for the series was 100% for both years. The series had
a total of 26 properties at June 30, 1999, 25 of which were at
100% qualified occupancy.
For the three months being reported Series 19 reflects a net
loss from Operating Partnerships of $429,733. When adjusted for
depreciation, which is a non-cash item, the Operating
Partnerships reflect positive operations of $274,131. This is an
interim period estimate; it is not necessarily indicative of the
final year end results.
Year 2000 Compliance
- --------------------
As Previously stated in the Partnership's 10-K, Boston
Capital and its management have reviewed the potential computer
problems that may arise from the century date change known as the
"Year 2000" or "Y2K" problem. We are currently in the process of
taking the necessary precautions to minimize any disruptions.
The majority of Boston Capital's systems are "Y2K" Compliant. For
all remaining systems we are working the vendors to make the
necessary upgrades and replacements. Boston Capital has no
reason to believe that any of its systems will not be fully
compliant before the year 2000 and is committed to ensuring that
the "Y2K" issue will have no impact on our investors.
46
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
47
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 16, 1999 By: /s/ John P. Manning
-------------------
John P. Manning,
Partner & Principal
Financial
Officer
48
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