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, 1999
-----------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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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, 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
September 30, March 31,
1999 1999
(Unaudited) (Audited)
ASSETS ------------ ----------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $102,836,731 $108,418,478
OTHER ASSETS
Cash and cash equivalents 1,826,675 1,693,799
Investments 2,121,657 2,237,166
Notes receivable 1,364,322 1,364,322
Deferred acquisition costs,
net of accumulated amortization (Note B) 1,577,796 1,612,244
Organization costs, net of
accumulated amortization (Note B) - 170
Other assets 2,764,210 2,459,125
----------- -----------
$112,491,391 $117,785,304
=========== ===========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 9,043 $ 4,553
Accounts payable affiliates 12,979,634 11,385,333
Capital contributions payable (Note D) 1,592,677 1,595,177
----------- -----------
14,581,354 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 98,820,597 105,641,899
General Partner (910,560) (841,658)
----------- -----------
97,910,037 104,800,241
----------- -----------
$112,491,391 $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
----------------------------
September 30, March 31,
1999 1999
(Unaudited) (Audited)
ASSETS ----------- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $13,237,869 $14,142,163
OTHER ASSETS
Cash and cash equivalents 289,781 306,884
Investments 135,167 128,028
Notes receivable 32,170 32,170
Deferred acquisition costs,
net of accumulated amortization (Note B) 241,768 247,024
Organization costs, net of
accumulated amortization (Note B) - -
Other assets 836,633 807,527
---------- ----------
$14,773,388 $15,663,796
========== ==========
LIABILITIES
Accounts payable and accrued
expenses (Note C) $ 1,928 $ 1,145
Accounts payable affiliates 3,450,387 3,155,784
Capital contributions payable (Note D) 32,922 32,922
---------- ----------
3,485,237 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 11,507,941 12,681,877
General Partner (219,790) (207,932)
---------- ----------
11,288,151 12,473,945
---------- ----------
$14,773,388 $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
----------------------------
September 30, March 31,
1999 1999
(Unaudited) (Audited)
ASSETS ----------- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $25,406,603 $27,165,227
OTHER ASSETS
Cash and cash equivalents 179,951 213,451
Investments 894,067 884,449
Notes receivable - -
Deferred acquisition costs
net of accumulated amortization (Note B) 387,596 396,021
Organization costs, net of
accumulated amortization (Note B) - -
Other assets 146,512 133,695
---------- ----------
$27,014,729 $28,792,843
========== ==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 1,164 $ -
Accounts payable affiliates 3,073,056 2,727,066
Capital contributions payable (Note D) 140,006 142,506
---------- ---------
3,214,226 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 September 30, 1999 24,029,107 26,130,647
General Partner (228,604) (207,376)
Unrealized gain (loss) on securities
available for sale, net - -
---------- ----------
23,800,503 25,923,271
---------- ----------
$27,014,729 $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
-------------------------
September 30, March 31,
1999 1999
(Unaudited) (Audited)
ASSETS ----------- ---------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $23,539,337 $24,774,196
OTHER ASSETS
Cash and cash equivalents 451,130 349,189
Investments - 100,000
Notes receivable 1,332,152 1,332,152
Deferred acquisition costs
net of accumulated amortization (Note B) 349,873 357,648
Organization costs, net of
accumulated amortization (Note B) - -
Other assets 1,692,418 1,425,347
---------- ----------
$27,364,910 $28,338,532
========== ==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 928 $ -
Accounts payable affiliates 3,592,978 3,035,918
Capital contributions payable (Note D) 1,367,195 1,367,195
---------- ----------
4,961,101 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 September 30, 1999 22,609,450 24,125,744
General Partner (205,641) (190,325)
---------- ----------
22,403,809 23,935,419
---------- ----------
$27,364,910 $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
-----------------------
September 30, March 31,
1999 1999
(Unaudited) (Audited)
ASSETS ------------ ----------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $18,015,755 $18,832,106
OTHER ASSETS
Cash and cash equivalents 298,954 306,065
Investments 233,302 230,531
Notes receivable - -
Deferred acquisition costs,
new of accumulated amortization (Note B) 263,449 269,156
Organization costs, net of
accumulated amortization (Note B) - -
Other assets 61,030 56,099
---------- ----------
$18,872,490 $19,693,957
========== ==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 856 $ -
Accounts payable affiliates 1,545,963 1,354,989
Capital contributions payable (Note D) 18,554 18,554
---------- ---------
1,565,373 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 Septmeber 30, 1999 17,444,273 18,447,437
General Partner (137,156) (127,023)
---------- ----------
17,307,117 18,320,414
---------- ----------
$18,872,490 $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
---------------------------
September 30, March 31,
1999 1999
(Unaudited) (Audited)
ASSETS ------------ ----------
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D) $22,637,167 $23,504,786
OTHER ASSETS
Cash and cash equivalents 606,859 518,210
Investments 859,121 894,158
Notes receivables - -
Deferred acquisition costs,
net of accumulated amortization (Note B) 335,110 342,395
Organization costs, net of
accumulated amortization (Note B) - 170
Other assets 27,617 36,457
--------- ----------
$24,465,874 $25,296,176
========== ==========
LIABILITIES
Accounts payable & accrued
expenses (Note C) $ 4,167 $ 3,408
Accounts payable affiliates 1,317,250 1,111,576
Capital contributions payable (Note D) 34,000 34,000
--------- ---------
1,355,417 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 September 30, 1999 23,229,826 24,256,194
General Partner (119,369) (109,002)
---------- ----------
23,110,457 24,147,192
---------- ----------
$24,465,874 $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 September 30,
(Unaudited)
1999 1998
---- ----
Income
Interest income $ 44,332 $ 52,498
Other Income 12,900 -
--------- ---------
57,232 52,498
Share of loss from Operating
Partnerships (Note D) (2,831,342) (3,221,843)
--------- ---------
Expenses
Professional fees 110,850 117,330
Fund management fee (Note C) 574,925 613,131
Amortization 17,224 42,963
General and administrative expenses 33,074 41,490
--------- ---------
736,073 814,914
--------- ---------
NET LOSS $(3,510,183) $(3,984,259)
========== ==========
Net loss allocated to limited
partners $(3,475,081) $(3,944,414)
========== ==========
Net loss allocated general
partner $ (35,102) $ (39,845)
========== ==========
Net loss per BAC $ (.77) $ (.09)
========== ==========
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
-----------------------
1999 1998
---- ----
Income
Interest income $ 6,346 $ 2,344
------- -------
Share of loss from Operating
Partnerships (Note D) (392,273) (540,027)
------- -------
Expenses
Professional fees 27,120 30,642
Fund management fee (Note C) 115,958 131,763
Amortization 2,628 2,628
General and administrative expenses 7,553 7,845
------- -------
153,259 172,878
------- -------
NET LOSS $(539,186) $(710,561)
======== ========
Net loss allocated to limited
partners $(533,794) $(703,454)
======== ========
Net loss allocated to general
partner $ (5,392) $ (7,107)
======== ========
Net loss per BAC $ (.13) $ (.18)
======== ========
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
------------------------
1999 1998
---- ----
Income
Interest income $ 12,421 $ 16,303
Other Income 150 -
------- ---------
12,571 16,303
Share of loss from Operating
Partnerships (Note D) (928,850) (744,267)
------- ---------
Expenses
Professional fees 29,870 30,244
Fund management fee (Note C) 162,551 162,005
Amortization 4,213 4,213
General and administrative expenses 10,241 10,543
------- --------
206,875 207,005
------- --------
NET LOSS $(1,123,154) $ (934,969)
========= ==========
Net loss allocated to limited
partners $(1,111,922) $ (925,619)
======== ==========
Net loss allocated to general
partner $ (11,232) $ (9,350)
======== ==========
Net loss per BAC $ (.21) $ (.17)
======== ==========
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
------------------------
1999 1998
------ ------
Income
Interest income $ 3,302 $ 1,809
Other Income 11,850 -
--------- ---------
15,152 1,809
Share of loss from Operating
Partnerships (Note D) (625,056) (702,557)
--------- ---------
Expenses
Professional fees 22,120 22,890
Fund management fee (Note C) 125,592 138,342
Amortization 3,887 12,534
General and administrative expenses 1,458 8,822
--------- ---------
153,057 182,588
--------- ---------
NET LOSS $ (762,961) $ (883,336)
========== ==========
Net loss allocated to limited
partners $ (755,331) $ (874,522)
========== ==========
Net loss allocated to general
partner $ (7,630) $ (8,814)
========== ==========
Net loss per BAC $ (.15) $ (.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
----------------------
1999 1998
---- ----
Income
Interest income $ 4,556 $ 7,280
------- -------
Share of loss from Operating
Partnerships (Note D) (474,421) (533,849)
------- -------
Expenses
Professional fees 17,120 18,052
Fund management fee (Note C) 70,487 80,434
Amortization 2,853 10,542
General and administrative expenses 6,432 6,617
------- -------
96,892 115,645
------- -------
NET LOSS $(566,757) $(642,214)
======== ========
Net loss allocated to limited
partners $(561,089) $(635,792)
======== ========
Net loss allocated to general
partner $ (5,668) $ (6,422)
======== ========
Net loss per BAC $ (.15) $ (.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 September 30,
(Unaudited)
SERIES 19
----------------------
1999 1998
---- ----
Income
Interest income $ 17,707 $ 24,762
Other income 900
------- -------
18,607
Share of loss from Operating
Partnerships (Note D) (410,742) (701,123)
------- -------
Expenses
Professional fees 14,620 15,502
Fund management fee (Note C) 100,337 100,587
Amortization 3,643 13,045
General and administrative expenses 7,390 7,664
------- -------
125,990 136,798
------- -------
NET LOSS $(518,125) $(813,159)
======== ========
Net loss allocated to limited
partners $(512,944) $(805,027)
======== ========
Net loss allocated to general
partner $ (5,181) $ (8,132)
======== ========
Net loss per BAC $ (.13) $ (.20)
======== ========
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)
1999 1998
---- ----
Income
Interest income $ 93,885 $ 129,246
Other Income 23,117 -
--------- ---------
117,002 129,246
Share of loss from Operating
Partnerships (Note D) (5,545,739) (7,131,081)
--------- ---------
Expenses
Professional fees 163,737 176,679
Fund management fee (Note C) 1,169,952 1,173,969
Amortization 34,618 94,985
General and administrative expenses 93,160 92,978
--------- ---------
1,461,467 1,538,611
--------- ---------
NET LOSS $(6,890,204) $(8,540,446)
========== ==========
Net loss allocated to limited
partners $(6,821,302) $(8,455,041)
========== ==========
Net loss allocated general
partner $ (68,902) $ (85,405)
========== ==========
Net loss per BAC $ (1.53) $ (1.91)
========== ==========
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
-----------------------
1999 1998
---- ----
Income
Interest income $ 19,840 $ 4,976
------- ---------
Share of loss from Operating
Partnerships (Note D) (905,022) (1,138,450)
------- ---------
Expenses
Professional fees 41,718 46,307
Fund management fee (Note C) 235,474 248,701
Amortization 5,256 5,256
General and administrative expenses 18,164 17,936
------- ---------
300,612 318,200
------- ---------
NET LOSS $(1,185,794) $(1,451,674)
========= =========
Net loss allocated to limited
partners $(1,173,936) $(1,437,157)
========= =========
Net loss allocated to general
partner $ (11,858) $ (14,517)
========= =========
Net loss per BAC $ (.30) $ (.37)
========= =========
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
------------------------
1999 1998
---- ----
Income
Interest income $ 24,742 $ 46,053
Other Income 300 -
------- ---------
25,042 46,053
Share of loss from Operating
Partnerships (Note D) (1,758,599) (1,825,987)
------- ---------
Expenses
Professional fees 42,130 44,038
Fund management fee (Note C) 315,377 298,694
Amortization 8,425 8,425
General and administrative expenses 23,279 23,651
------- --------
389,211 374,808
------- --------
NET LOSS $(2,122,768) $(2,154,742)
========= ==========
Net loss allocated to limited
partners $(2,101,540) $(2,133,195)
========= ==========
Net loss allocated to general
partner $ (21,228) $ (21,547)
========= ==========
Net loss per BAC $ (.39) $ (.39)
========= ==========
The accompanying notes are an integral part of these statements.
1
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Six Months Ended September 30,
(Unaudited)
SERIES 17
------------------------
1999 1998
------ ------
Income
Interest income $ 7,919 $ 3,556
Other Income 12,000 -
--------- ---------
19,919 3,556
Share of loss from Operating
Partnerships (Note D) (1,230,720) (1,660,513)
--------- ---------
Expenses
Professional fees 32,931 35,709
Fund management fee (Note C) 258,433 256,509
Amortization 7,775 34,129
General and administrative expenses 21,670 20,628
--------- ---------
320,809 346,975
--------- ---------
NET LOSS $(1,531,610) $(2,003,932)
========== ==========
Net loss allocated to limited
partners $(1,516,294) $(1,983,892)
========== ==========
Net loss allocated to general
partner $ (15,316) $ (20,040)
========== ==========
Net loss per BAC $ (.30) $ (.40)
========== ==========
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
----------------------
1999 1998
---- ----
Income
Interest income $ 9,037 $ 25,535
------- ---------
Share of loss from Operating
Partnerships (Note D) (815,220) (1,040,838)
------- ---------
Expenses
Professional fees 26,243 26,350
Fund management fee (Note C) 160,944 169,141
Amortization 5,707 21,084
General and administrative expenses 14,220 13,092
------- ---------
207,114 229,667
------- ---------
NET LOSS $(1,013,297) $(1,244,970)
========= =========
Net loss allocated to limited
partners $(1,003,164) $(1,232,520)
========= =========
Net loss allocated to general
partner $ (10,133) $ (12,450)
======== =========
Net loss per BAC $ (.28) $ (.34)
======== =========
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
----------------------
1999 1998
---- ----
Income
Interest income $ 32,347 $ 49,126
Other income 10,817
------- ---------
43,164
Share of loss from Operating
Partnerships (Note D) (836,178) (1,465,293)
------- ---------
Expenses
Professional fees 20,715 24,275
Fund management fee (Note C) 199,724 200,924
Amortization 7,455 26,091
General and administrative expenses 15,827 17,671
------- ---------
243,721 268,961
------- ---------
NET LOSS $(1,036,735) $(1,685,128)
========= =========
Net loss allocated to limited
partners $(1,026,368) $(1,668,277)
========= =========
Net loss allocated to general
partner $ (10,367) $ (16,851)
========= =========
Net loss per BAC $ (.26) $ (.41)
========= ========
The accompanying notes are an integral part of these statements.
1
Boston Capital Tax Credit Fund III L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Six Months Ended September 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) (6,821,302) (68,902) - (6,890,204)
---------- ------- ------ ----------
Partners' capital
(deficit)
September 30, 1999 $ 98,820,597 $ (910,560) $ - $ 97,910,037
=========== ======== ======= ===========
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, 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) (1,173,936) (11,858) - (1,185,794)
--------- ------- --------- ----------
Partners' capital
(deficit),
September 30, 1999 $11,507,941 $ (219,790) $ - $11,288,151
========== ======== ========== ==========
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) (2,101,540) (21,228) - (2,122,768)
---------- ------- -------- ----------
Partners' capital
(deficit),
September 30, 1999 $24,029,107 $ (228,604) $ - $23,800,503
========== ======== ========= ==========
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, 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) (1,516,294) (15,316) - (1,531,610)
--------- -------- ------- ----------
Partners' capital
(deficit),
September 30, 1999 $22,609,450 $(205,641) $ - $22,403,809
========== ======== ========= ==========
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) (1,003,164) (10,133) - (1,013,297)
---------- -------- ------- ---------
Partners' capital
(deficit),
September 30, 1999 $17,444,273 $(137,156) $ - $17,307,117
========== ======= ========= ==========
The accompanying notes are an integral part of these statements.
2
Boston Capital Tax Credit Fund III L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Six Months Ended September 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) (1,026,368) (10,367) - (1,036,735)
---------- ------- -------- ---------
Partners' capital
(deficit),
September 30, 1999 $23,229,826 $(119,369) $ - $23,110,457
========== ======== ========== ==========
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)
1999 1998
---- ----
Cash flows from operating activities:
Net loss $ (6,890,204) $ (8,540,446)
Adjustments
Distributions from Operating
Partnerships 37,616 15,507
Amortization 34,618 94,985
Share of loss from Operating
Partnerships 5,545,739 7,131,081
Changes in assets and liabilities
(Decrease) Increase in accounts
payable and accrued expenses 4,490 47,965
Decrease (Increase) in accounts
receivable (306,694) (171,382)
Decrease (Increase) in accounts
payable affiliates 1,594,302 1,552,651
--------- ---------
Net cash (used in) provided by
operating activities 19,867 130,361
--------- ---------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire - -
Capital contributions paid to
Operating Partnerships (2,500) (156,214)
Advances to Operating Partnerships - (79,236)
Investments 115,509 225,648
--------- --------
Net cash (used in) provided by
investing activities 113,009 (9,802)
--------- --------
2
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 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 132,876 120,559
--------- ---------
Cash and cash equivalents, beginning 1,693,799 1,653,522
--------- ---------
Cash and cash equivalents, ending $ 1,826,675 $ 1,744,081
========== ==========
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
-------------------------
1999 1998
---- ----
Cash flows from operating activities:
Net loss $(1,185,794) $(1,451,674)
Adjustments
Distributions from Operating
Partnerships 882 874
Amortization 5,256 5,256
Share of loss from Operating
Partnerships 905,022 1,138,450
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 783 322
Decrease (Increase) in accounts
receivable (30,716) (444)
Decrease (Increase) in accounts
payable affiliates 294,603 441,965
------- -------
Net cash (used in) provided by
operating activities (9,964) 134,749
------- -------
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 - (186,247)
Investments (7,139) (3,028)
------- -------
Net cash (used in) provided by
investing activities (7,139) (189,275)
------- -------
2
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 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 (17,103) (54,526)
Cash and cash equivalents, beginning 306,884 156,717
------- -------
Cash and cash equivalents, ending $ 289,781 $ 102,191
======== ========
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.
2
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 30,
(Unaudited)
Series 16
-------------------------
1999 1998
---- ----
Cash flows from operating activities:
Net loss $(2,122,768) $(2,154,742)
Adjustments
Distributions from Operating
Partnerships 25 635
Amortization 8,425 8,425
Share of loss from Operating
Partnerships 1,758,599 1,825,987
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 1,164 457
Decrease (Increase) in accounts
receivable (12,817) (20,162)
Decrease (Increase) in accounts
payable affiliates 345,990 345,985
--------- --------
Net cash (used in) provided by
operating activities (21,382) 6,585
--------- --------
Cash flows from investing activities:
Acquisition costs repaid (paid) for
Operating Partnerships acquired or
to acquire - -
Capital contributions paid to Operating
Partnerships (2,500) (1,500)
Advances to Operating Partnerships - -
Investments (9,618) 121,291
--------- --------
Net cash (used in) provided by
investing activities (12,118) 119,791
--------- --------
2
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 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 (33,500) 126,376
Cash and cash equivalents, beginning 213,451 199,558
--------- --------
Cash and cash equivalents, ending $ 179,951 $ 325,934
========== ==========
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.
2
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 30,
(Unaudited)
Series 17
-------------------------
1999 1998
---- ----
Cash flows from operating activities:
Net loss $(1,531,610) $(2,003,932)
Adjustments
Distributions from Operating
Partnerships 4,139 7,803
Amortization 7,775 34,129
Share of loss from Operating
Partnerships 1,230,720 1,660,513
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 928 46,596
Decrease (Increase) in accounts
receivable (267,071) (130,949)
Decrease (Increase) in accounts
payable affiliates 557,060 368,053
--------- --------
Net cash (used in) provided by
operating activities 1,941 (17,787)
--------- --------
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 100,000 -
--------- --------
Net cash (used in) provided by
investing activates 100,000 -
--------- --------
2
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 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 101,941 (17,787)
Cash and cash equivalents, beginning 349,189 388,024
--------- --------
Cash and cash equivalents, ending $ 451,130 $ 370,237
========== ==========
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.
3
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 30,
(Unaudited)
Series 18
-------------------------
1999 1998
---- ----
Cash flows from operating activities:
Net loss $(1,013,297) $(1,244,970)
Adjustments
Distributions from Operating
Partnerships 1,130 6,130
Amortization 5,707 21,084
Share of loss from Operating
Partnerships 815,220 1,040,838
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 856 272
Decrease (Increase) in accounts
receivable (4,930) (3,390)
Decrease (Increase) in accounts
payable affiliates 190,974 190,974
--------- --------
Net cash (used in) provided by
operating activities (4,340) 10,938
--------- --------
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 - (14,280)
Investments (2,771) 119,676
--------- --------
Net cash (used in) provided by
investing activities (2,771) (49,318)
--------- --------
3
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 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 (7,111) (38,380)
Cash and cash equivalents, beginning 306,065 301,444
-------- --------
Cash and cash equivalents, ending $ 298,954 $ 263,064
========= ==========
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.
3
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 30,
(Unaudited)
Series 19
-------------------------
1999 1998
---- ----
Cash flows from operating activities:
Net loss $(1,036,735) $(1,685,128)
Adjustments
Distributions from Operating
Partnerships 31,440 65
Amortization 7,455 26,091
Share of loss from Operating
Partnerships 836,178 1,465,293
Changes in assets and liabilities
(Decrease) increase in accounts
payable and accrued expenses 759 318
Decrease (Increase) in accounts
Receivable/ other assets 8,840 (16,437)
Decrease (Increase) in accounts
payable affiliates 205,675 205,674
--------- --------
Net cash (used in) provided by
operating activities 53,612 (4,124)
--------- --------
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 35,037 109,000
--------- --------
Net cash (used in) provided by
investing activities 35,037 109,000
--------- --------
3
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Six Months Ended September 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 88,649 104,876
Cash and cash equivalents, beginning 518,210 607,779
--------- --------
Cash and cash equivalents, ending $ 606,859 $ 712,655
========== ==========
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.
3
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS
September 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.
3
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1999
(Unaudited)
NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein as of September 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 $2,121,657
Due after one year -
---------
Total $2,121,657
=========
The fair market value of the securities is $2,121,657.
3
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 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 September
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 September 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 September 30, 1999 the Fund has
accumulated unallocated acquisition amortization totaling $315,542. The
breakdown of accumulated unallocated acquisition amortization within the fund
as of September 30, 1999 for Series 15, Series 16, Series 17, Series 18, and
Series 19 is $47,402, $75,833, $77,878, $51,490 and $62,939, 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 September 30, 1999 all series had completed payment of all acquisition
fees due to Boston Capital Partners, Inc.
3
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 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 September 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 September 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 September 30, 1999 and 1998 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, 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 September 30,
1999 and 1998 are as follows:
1999 1998
---- ----
Series 15 $ 32,922 $ 32,922
Series 16 140,006 145,311
Series 17 1,367,195 1,367,195
Series 18 18,554 562,921
Series 19 34,000 463,000
--------- ----------
$1,592,677 $ 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
six months ended June 30, 1999.
39
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Six months ended June 30,
(Unaudited)
Series 15
---------------------------
1999 1998
---- ----
Revenues
Rental $ 4,867,033 $ 4,749,918
Interest and other 169,245 238,332
--------- ---------
5,036,278 4,988,250
--------- ---------
Expenses
Interest 1,381,481 1,429,297
Depreciation and amortization 1,901,685 1,871,234
Operating expenses 3,041,468 3,025,819
--------- ---------
6,324,634 6,326,350
--------- ---------
NET LOSS $(1,288,356) $(1,338,100)
========= =========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $ (905,022) $(1,138,450)
========= =========
Net loss allocated to other
partners $ (12,884) $ (13,381)
========= =========
Net loss suspended $ (370,450) $ (186,269)
========= =========
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, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Six months ended June 30,
(Unaudited)
Series 16
--------------------------
1999 1998
---- ----
Revenues
Rental $ 6,136,645 $ 6,012,307
Interest and other 312,806 473,062
--------- ---------
6,449,451 6,485,369
--------- ---------
Expenses
Interest 1,965,497 2,112,658
Depreciation and amortization 2,391,922 2,277,728
Operating expenses 4,112,999 3,968,244
--------- ---------
8,470,418 8,358,630
--------- ---------
NET LOSS $(2,020,967) $(1,873,261)
========== ==========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $(1,758,599) $(1,825,987)
========== ==========
Net loss allocated to other
partners $ (20,210) $ (18,733)
========== ==========
Net loss suspended $ (242,158) $ (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.
4
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Six Months ended June 30,
(Unaudited)
Series 17
--------------------------
1999 1998
Revenues ---- ----
Rental $ 5,449,718 $ 5,385,005
Interest and other 215,841 305,686
--------- ---------
5,665,559 5,690,691
--------- ---------
Expenses
Interest 1,821,772 2,083,741
Depreciation and amortization 1,922,826 2,104,727
Operating expenses 3,164,113 3,179,509
--------- ---------
6,908,711 7,367,977
--------- ---------
NET LOSS $(1,243,152) $(1,677,286)
========== =========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $(1,230,720) $(1,660,513)
========== =========
Net loss allocated to other
partners $ (12,432) $ (16,773)
========== =========
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.
4
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Six months ended June 30,
(Unaudited)
Series 18
----------------------------
1999 1998
Revenues ---- ----
Rental $ 3,222,312 $3,062,836
Interest and other 173,696 116,280
--------- ---------
3,396,008 3,179,116
--------- ---------
Expenses
Interest 1,053,685 1,105,161
Depreciation and amortization 1,285,615 1,370,740
Operating expenses 1,908,227 1,788,878
--------- ---------
4,247,527 4,264,779
--------- ---------
NET LOSS $ (851,519) $(1,085,663)
========= =========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $ (815,220) $(1,040,838)
========= =========
Net loss allocated to other
partners $ (8,515) $ (10,857)
========= =========
Net loss suspended $ (27,784) $ (33,968)
========= =========
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, 1999
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Six months ended June 30,
(Unaudited)
Series 19
--------------------------
1999 1998
Revenues ---- ----
Rental $ 4,517,530 $ 4,396,231
Interest and other 160,447 155,810
--------- ---------
4,677,977 4,552,041
--------- ---------
Expenses
Interest 1,672,668 1,765,501
Depreciation and amortization 1,449,178 1,964,599
Operating expenses 2,400,755 2,302,035
--------- ---------
5,522,601 6,032,135
--------- ---------
NET LOSS $ (844,624) $(1,480,094)
========= =========
Net loss allocated to Boston
Capital Tax Credit Fund
III L.P. $ (836,178) $(1,465,293)
========= =========
Net loss allocated to other
partners $ (8,446) $ (14,801)
========= =========
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.
4
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 1999
(Unaudited)
NOTE D - INVESTMENT IN OPERATING PARTNERSHIPS-CONTINUED
When comparing the results of operations from the operating partnerships
for the six months ended June 31, 1999 and June 30, 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.
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, 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 September 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.
4
During the quarter ended September 30, 1999, $2,506 of Series 16 net
offering proceeds had been used to pay capital contributions. Series 16 net
offering proceeds in the amount of $140,006 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, 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 September 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 $451,130 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, 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 September 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 September 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 September 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 September 30, 1999.
Results of Operations
- ---------------------
As of September 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
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, 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 $115,958, $162,551, $125,592, $70,487, and $100,337 respectively.
The Fund's investment objectives do not include receipt of significant
cash distributions from the Operating Partnerships in which it has invested or
intends to invest. The Fund's investments in Operating Partnerships have been
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, 1999 and 1998, the average qualified
occupancy for the series was 100% for both years. The series had a total of
68 properties at September 30, 1999, all of which were at 100% qualified
occupancy.
For the six months being reported Series 15 reflects a net loss from
Operating Partnerships of $1,288,356. When adjusted for depreciation, which
is a non-cash item, the Operating Partnerships reflect positive operations of
$613,329. This is an interim period estimate; it is not necessarily
indicative of the final year end results.
48
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 expenses and increasing occupancy, the property
remains unable to operate above break-even. Major capital improvements items
identified by the management company have been completed. The remaining items
are to be completed as units turnover and it is anticipated that all of the
items will be completed by year end. Average physical occupancy at the
property remains at 98%. To date the Operating General Partner has been
unsuccessful in securing refinancing through local lenders. Refinancing will
be attempted again in 2000 once the property has maintained stabilized
occupancy greater than 90% for a significant period of time.
The Operating General Partner of School Street I Limited Partnership
(School Street Apts. I) hired a new management company in September 1999 in
order to improve operations at the property. The average occupancy declined
to 68% during the third quarter of 1999 due to management pursuing evictions
of delinquent tenants. In addition, the debt was modified in January, 1999
reducing the interest rate to 7.25% and writing down the outstanding principal
of the loan. Capital needs were addressed as part of the refinancing package
and all repair work is scheduled to be completed by December 31, 1999.
(Series 16) As of September 30, 1999 and 1998, the average qualified
occupancy for the series was 99.7% for both years. The series had a
total of 64 properties at September 30, 1999. Out of the total, 62 had 100%
qualified occupancy.
For the six months being reported Series 16 reflects a net loss from
Operating Partnerships of $2,020,967. When adjusted for depreciation, which
is a non-cash item, the Operating Partnerships reflect positive operations of
$370,955. 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) effective January 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 third quarter
average occupancy was 97%.
49
(Series 17) As of September 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 September 30, 1999. 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 $1,243,152. When adjusted for depreciation, which,
is a non-cash item, the Operating Partnerships reflect positive operations of
$679,674. 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. 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. As a
result of these changes, occupancy reached 97% as of September 30, 1999. The
rental rates at the property were increased during the quarter. 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.
The property owned by California Investors VI LP (Orchard Park) has
reached physical occupancy of 94% as of September 1999. The increased
occupancy is the result of the management company's aggressive marketing
efforts and the many capital improvements completed at the property, including
office renovations and the addition of an activity center. These improvements
have been successful in attracting and retaining tenants. In addition, 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.
5
(Series 18) As of September 30, 1999 and 1998 the average qualified occupancy
for the series was 100% for both years. The series had a total of 34
properties at September 30, 1999, out of the total all had 100% qualified
occupancy.
For the six months being reported Series 18 reflects a net loss from
Operating Partnerships of $851,519. When adjusted for depreciation, which is
a non-cash item, the Operating Partnerships reflect positive operations of
$434,096. 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, began at the site in mid
August. This new management company is focusing 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 Operating General
Partner has taken a more active role in the leasing and day to day management
of the six transitional units. The Operating General Partner has been
successful in removing the six transitional units from the program. As of
1/1/00, the six units will be available to non-transitional qualified
residence. The property manager is in the process of contacting prospective
residents on the waiting list as well as families on the waiting list of the
Department of Community Affairs to find qualified residents. The manager
expects to have the six units ready and occupied by qualified residence by
1/15/00. As of 9/30/99, the property had a 92% occupancy, which is up from
83% recorded at 3/31/99 and the 75% at 6/30/99. Because of the stable
occupancy in the third quarter, 100% in July, 96% in August and 92% in
September, the operating expenses have been controlled. It is anticipated the
expenses will remain under control for the balance of the year. However,
repairs and maintenance expenses are expected to increase in January of 2000
as a result of the turnover and conversion of the six transitional units.
5
(Series 19) As of September 30, 1999 and 1998 the average qualified occupancy
for the series was 100% and 99.8%, respectively. The series had a total of 26
properties at September 30, 1999, all of which were at 100% qualified
occupancy.
For the six months being reported Series 19 reflects a net loss from
Operating Partnerships of $844,624. When adjusted for depreciation, which is
a non-cash item, the Operating Partnerships reflect positive operations of
$604,554. 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.
52
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
53
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 17, 1999 By: /s/ John P. Manning
-------------------
John P. Manning,
Partner & Principal Financial
Officer
54
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<CIK> 0000879555
<NAME> BOSTON CAPITAL TAX CREDIT FUND III LP
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> SEP-30-1999
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