-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EVHOGyt/iI+owNPtm/5bOKpu6nzpfpfaRxlj8zbn7u0Q8sv2Vt1ZNjGGfHW5H8y2 0LKilUKRXuZelH3B5XK4PQ== 0000879555-98-000012.txt : 19981120 0000879555-98-000012.hdr.sgml : 19981120 ACCESSION NUMBER: 0000879555-98-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981119 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOSTON CAPITAL TAX CREDIT FUND III L P CENTRAL INDEX KEY: 0000879555 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF APARTMENT BUILDINGS [6513] IRS NUMBER: 521749505 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-21718 FILM NUMBER: 98755607 BUSINESS ADDRESS: STREET 1: 313 CONGRESS ST STREET 2: C/O BOSTON CAPITAL PARTNERS INC CITY: BOSTON STATE: MA ZIP: 02210 BUSINESS PHONE: 6174390072 MAIL ADDRESS: STREET 1: ONE BOSTON PLACE STREET 2: STE 2100 CITY: BOSTON STATE: MA ZIP: 02108-4406 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1998 ----------------- or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to -------- -------- Commission file number 0-21718 ------- BOSTON CAPITAL TAX CREDIT FUND III L.P. - ----------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 52-1749505 - -------------------------------- ----------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Boston Place, Suite 2100, Boston, Massachusetts 02108 - ----------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (617) 624-8900 -------------- - ----------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days. Yes X No ------ ------ BOSTON CAPITAL TAX CREDIT FUND III L.P. -------------------------------------------------- QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED September 30, 1998 ----------------------------------------------- TABLE OF CONTENTS ----------------- PART I - FINANCIAL INFORMATION Item 1. Financial Statements.............................. Balance Sheets.................................... Statements of Operations.......................... Statement of Changes in Partners' Capital......... Statements of Cash Flows.......................... Notes to Financial Statements..................... Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..................................... PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K.................. Signatures........................................ Boston Capital Tax Credit Fund III L.P. BALANCE SHEETS September 30, March 31, 1998 1998 (Unaudited) (Audited) ASSETS ------------ - ------------ INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $113,885,680 $121,032,270 OTHER ASSETS Cash and cash equivalents 1,774,081 1,653,522 Investments 2,623,928 2,970,867 Notes receivable 2,056,333 2,056,333 Deferred acquisition costs, net of accumulated amortization (Note B) 1,631,141 1,681,137 Organization costs, net of accumulated amortization (Note B) 22,371 67,358 Other assets 2,100,209 1,728,300 ----------- - ----------- $124,093,743 $131,189,787 =========== =========== LIABILITIES Accounts payable & accrued expenses (Note C) $ 52,518 $ 4,553 Accounts payable affiliates 10,256,063 8,703,412 Capital contributions payable (Note D) 2,569,849 2,726,063 ----------- - ----------- 12,878,430 11,434,028 ----------- - ----------- PARTNERS' CAPITAL Limited Partners Units of limited partnership interest, $10 stated value per BAC; 22,000,000 authorized BACs; 21,996,102 issued and outstanding, as of June 30, 1998 111,992,820 120,447,861 General Partner (777,507) (692,102) ----------- - ----------- 111,215,313 119,755,759 ----------- - ----------- $124,093,743 $131,189,787 =========== =========== The accompanying notes are an integral part of these statements. 1 Boston Capital Tax Credit Fund III L.P. BALANCE SHEETS SERIES 15 - ---------------------------- September 30, March 31, 1998 1998 (Unaudited) (Audited) ASSETS ----------- - --------- INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $15,107,081 $16,246,406 OTHER ASSETS Cash and cash equivalents 102,191 156,717 Investments 128,028 125,000 Notes receivable 110,000 110,000 Deferred acquisition costs, net of accumulated amortization (Note B) 252,280 257,535 Organization costs, net of accumulated amortization (Note B) - - - Other assets 659,777 473,086 ---------- - ---------- $16,359,357 $17,368,744 ========== ========== LIABILITIES Accounts payable and accrued expenses (Note C) $ 1,467 $ 1,145 Accounts payable affiliates 2,802,710 2,360,745 Capital contributions payable (Note D) 32,922 32,922 ---------- - ---------- 2,837,099 2,394,812 ---------- - ---------- PARTNERS' CAPITAL Limited Partners Units of limited partnership interest, $10 stated value per BAC; 22,000,000 authorized BACs; 3,870,500 issued and outstanding, as of June 30, 1998 13,719,707 15,156,864 General Partner (197,449) (182,932) ---------- - ---------- 13,522,258 14,973,932 ---------- - ---------- $16,359,357 $17,368,744 ========== ========== The accompanying notes are an integral part of these statements. 2 Boston Capital Tax Credit Fund III L.P. BALANCE SHEETS SERIES 16 - ---------------------------- September 30, March 31, 1998 1998 (Unaudited) (Audited) ASSETS ----------- - --------- INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $28,951,221 $30,777,843 OTHER ASSETS Cash and cash equivalents 325,934 199,558 Investments 879,467 1,000,758 Notes receivable - - - Deferred acquisition costs net of accumulated amortization (Note B) 404,446 412,871 Organization costs, net of accumulated amortization (Note B) - - - Other assets 92,372 72,210 ---------- - ---------- $30,653,440 $32,463,240 ========== ========== LIABILITIES Accounts payable & accrued expenses (Note C) $ 457 $ - - Accounts payable affiliates 2,581,076 2,235,091 Capital contributions payable (Note D) 143,811 145,311 ---------- - ---------- 2,725,344 2,380,402 ---------- - ---------- PARTNERS' CAPITAL Limited Partners Units of limited partnership interest, $10 stated value per BAC; 22,000,000 authorized BACs; 5,429,402 issued and outstanding, as of September 30, 1998 28,115,423 30,248,618 General Partner (187,327) (165,780) Unrealized gain (loss) on securities available for sale, net - - - ---------- - ---------- 27,928,096 30,082,838 ---------- - ---------- $30,653,440 $32,463,240 ========== ========== The accompanying notes are an integral part of these statements. 3 Boston Capital Tax Credit Fund III L.P. BALANCE SHEETS SERIES 17 - ---------------------------- September 30, March 31, 1998 1998 (Unaudited) (Audited) ASSETS ----------- - --------- INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $26,094,462 $27,762,778 OTHER ASSETS Cash and cash equivalents 370,237 388,024 Investments - - - Notes receivable 1,409,982 1,409,982 Deferred acquisition costs net of accumulated amortization (Note B) 349,872 373,197 Organization costs, net of accumulated amortization (Note B) - 10,804 Other assets 1,252,763 1,121,814 ---------- - ---------- $29,477,316 $31,066,599 ========== ========== LIABILITIES Accounts payable & accrued expenses (Note C) $ 46,596 $ - - Accounts payable affiliates 2,527,359 2,159,306 Capital contributions payable (Note D) 1,367,195 1,367,195 ---------- - ---------- 3,941,150 3,526,501 ---------- - ---------- PARTNERS' CAPITAL Limited Partners Units of limited partnership interest, $10 stated value per BAC; 22,000,000 authorized BACs; 5,000,000 issued and outstanding, as of June 30, 1998 25,710,484 27,694,376 General Partner (174,318) (154,278) ---------- - ---------- 25,536,166 27,540,098 ---------- - ---------- $29,477,316 $31,066,599 ========== ========== The accompanying notes are an integral part of these statements. 4 Boston Capital Tax Credit Fund III L.P. BALANCE SHEETS SERIES 18 - ---------------------------- September 30, March 31, 1998 1998 (Unaudited) (Audited) ASSETS ------------ - ---------- INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $19,874,634 $20,921,603 OTHER ASSETS Cash and cash equivalents 263,064 301,444 Investments 354,324 474,000 Notes receivable 536,351 536,351 Deferred acquisition costs, new of accumulated amortization (Note B) 274,863 280,569 Organization costs, net of accumulated amortization (Note B) 3,395 18,772 Other assets 62,292 44,622 ---------- - ---------- $21,368,923 $22,577,361 ========== ========== LIABILITIES Accounts payable & accrued expenses (Note C) $ 272 $ - - Accounts payable affiliates 1,239,015 1,048,041 Capital contributions payable (Note D) 562,921 717,635 ---------- - ---------- 1,802,208 1,765,676 ---------- - ---------- PARTNERS' CAPITAL Limited Partners Units of limited partnership interest, $10 stated value per BAC; 22,000,000 authorized BACs; 3,616,200 issued and outstanding, as of September 30, 1998 19,681,275 20,913,795 General Partner (114,560) (102,110) ---------- - ---------- 19,566,715 20,811,685 ---------- - ---------- $21,368,923 $22,577,361 ========== ========== The accompanying notes are an integral part of these statements. 5 Boston Capital Tax Credit Fund III L.P. BALANCE SHEETS SERIES 19 - ---------------------------- September 30, March 31, 1998 1998 (Unaudited) (Audited) ASSETS ------------ - ---------- INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $23,858,282 $25,323,640 OTHER ASSETS Cash and cash equivalents 712,655 607,779 Investments 1,262,109 1,371,109 Notes receivables - - - Deferred acquisition costs, net of accumulated amortization (Note B) 349,680 356,965 Organization costs, net of accumulated amortization (Note B) 18,976 37,782 Other assets 33,005 16,568 ---------- - ---------- $26,234,707 $27,713,843 ========== ========== LIABILITIES Accounts payable & accrued expenses (Note C) $ 3,726 $ 3,408 Accounts payable affiliates 1,105,903 900,229 Capital contributions payable (Note D) 463,000 463,000 ---------- - ---------- 1,572,629 1,366,637 ---------- - ---------- PARTNERS' CAPITAL Limited Partners Units of limited partnership interest, $10 stated value per BAC; 22,000,000 authorized BACs; 4,080,000 issued and outstanding, as of June 30, 1998 24,765,931 26,434,208 General Partner (103,853) (87,002) ---------- - ---------- 24,662,078 26,347,206 ---------- - ---------- $26,234,707 $27,713,843 ========== ========== The accompanying notes are an integral part of these statements. 6 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Three Months Ended September 30, (Unaudited) 1998 1997 ---- ---- Income Interest income $ 52,498 $ 51,860 ---------- ---------- Share of loss from Operating Partnerships (Note D) (3,221,843) (2,953,785) ---------- ---------- Expenses Professional fees 117,330 181,326 Fund management fee (Note C) 613,131 537,585 Amortization 42,963 55,405 General and administrative expenses 41,490 71,869 ---------- ---------- 814,914 846,185 ---------- ---------- NET LOSS $(3,984,259) $(3,748,110) ========== ========== Net loss allocated to limited partners $(3,944,414) $(3,710,629) ========== ========== Net loss allocated general partner $ (39,845) $ (37,481) ========== ========== Net loss per BAC $ (.09) $ (.85) ========== ========== The accompanying notes are an integral part of these statements. 7 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Three Months Ended September 30, (Unaudited) SERIES 15 - ----------------------- 1998 1997 ---- - ---- Income Interest income $ 2,344 $ 630 -------- - -------- Share of loss from Operating Partnerships (540,027) (662,215) -------- - -------- Expenses Professional fees 30,642 46,746 Fund management fee (Note C) 131,763 110,595 Amortization 2,628 2,628 General and administrative expenses 7,845 12,262 -------- - -------- 172,878 172,231 -------- - -------- NET LOSS $(710,561) $(833,816) ======== ======== Net loss allocated to limited partners $(703,454) $(825,478) ======== ======== Net loss allocated to general partner $ (7,107) $ (8,338) ======== ======== Net loss per BAC $ (.18) $ (.21) ======== ======== The accompanying notes are an integral part of these statements. 8 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Three Months Ended September 30, (Unaudited) SERIES 16 - ------------------------ 1998 1997 ---- - ---- Income Interest income $ 16,303 $ 15,685 -------- - -------- Share of loss from Operating Partnerships (744,267) (595,713) -------- - -------- Expenses Professional fees 30,244 47,673 Fund management fee (Note C) 162,005 152,486 Amortization 4,213 15,370 General and administrative expenses 10,542 18,349 -------- - -------- 207,005 233,878 -------- - -------- NET LOSS $(934,969) $(813,906) ======== ======== Net loss allocated to limited partners $(925,619) $(805,767) ======== ======== Net loss allocated to general partner $ (9,350) $ (8,139) ======== ======== Net loss per BAC $ (.17) $ (.14) ======== ======== The accompanying notes are an integral part of these statements. 9 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Three Months Ended September 30, (Unaudited) SERIES 17 - ------------------------ 1998 1997 ---- - ---- Income Interest income $ 1,809 $ 3,594 -------- - -------- Share of loss from Operating Partnerships (702,557) (718,001) -------- - -------- Expenses Professional fees 22,890 33,229 Fund management fee (Note C) 138,342 114,981 Amortization 12,534 13,820 General and administrative expenses 8,822 14,416 -------- - -------- 182,588 176,446 -------- - -------- NET LOSS $(883,356) $(890,853) ======== ======== Net loss allocated to limited partners $(874,522) $(881,944) ======== ======== Net loss allocated to general partner $ (8,834) $ (8,909) ======== ======== Net loss per BAC $ (.18) $ (.18) ======== ======== The accompanying notes are an integral part of these statements. 10 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Three Months Ended September 30, (Unaudited) SERIES 18 - ---------------------- 1998 1997 ---- - ---- Income Interest income $ 7,280 $ 8,310 -------- - -------- Share of loss from Operating Partnerships (533,849) (519,526) -------- - -------- Expenses Professional fees 18,052 28,026 Fund management fee (Note C) 80,434 78,936 Amortization 10,542 10,542 General and administrative expenses 6,617 11,764 -------- - -------- 115,645 129,268 -------- - -------- NET LOSS $(642,214) $(640,484) ======== ======== Net loss allocated to limited partners $(635,792) $(634,079) ======== ======== Net loss allocated to general partner $ (6,422) $ (6,405) ======== ======== Net loss per BAC $ (.17) $ (.18) ======== ======== The accompanying notes are an integral part of these statements. 11 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Three Months Ended September 30, (Unaudited) SERIES 19 - ---------------------- 1998 1997 ---- - ---- Income Interest income $ 24,762 $ 23,641 -------- - -------- Share of loss from Operating Partnerships (701,123) (458,330) -------- - -------- Expenses Professional fees 15,502 25,652 Fund management fee (Note C) 100,587 80,587 Amortization 13,045 13,045 General and administrative expenses 7,664 15,078 -------- - -------- 136,798 134,362 -------- - -------- NET LOSS $(813,159) $(569,051) ======== ======== Net loss allocated to limited partners $(805,027) $(563,361) ======== ======== Net loss allocated to general partner $ (8,132) $ (5,690) ======== ======== Net loss per BAC $ (.20) $ (.14) ======== ======== The accompanying notes are an integral part of these statements. 12 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Six Months Ended September 30, (Unaudited) 1998 1997 ---- ---- Income Interest income $ 129,246 $ 91,928 ---------- ---------- Share of loss from Operating Partnerships (Note D) (7,131,081) (6,486,219) ---------- ---------- Expenses Professional fees 176,679 197,664 Fund management fee (Note C) 1,173,969 1,065,349 Amortization 94,985 110,810 General and administrative expenses 92,978 137,732 ---------- ---------- 1,538,611 1,511,555 ---------- ---------- NET LOSS $(8,540,446) $(7,905,846) ========== ========== Net loss allocated to limited , , partners $(8,455,041) $(7,826,789) ========== ========== Net loss allocated general partner $ (85,405) $ (79,057) ========== ========== Net loss per BAC $ (1.91) $ (1.78) ========== ========== The accompanying notes are an integral part of these statements. 13 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Six Months Ended September 30, (Unaudited) SERIES 15 - ----------------------- 1998 1997 ---- - ---- Income Interest income $ 4,976 $ 2,223 ---------- -- - -------- Share of loss from Operating Partnerships (1,138,450) (1,411,484) ---------- -- - -------- Expenses Professional fees 46,307 49,708 Fund management fee (Note C) 248,701 235,983 Amortization 5,256 5,256 General and administrative expenses 17,936 23,036 ---------- -- - -------- 318,200 313,983 ---------- -- - -------- NET LOSS $(1,451,674) $(1,723,244) ========== ========== Net loss allocated to limited partners $(1,437,157) $(1,706,012) ========== ========== Net loss allocated to general partner $ (14,517) $ (17,232) ========== ========== Net loss per BAC $ (.37) $ (.44) ========== ========== The accompanying notes are an integral part of these statements. 14 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Six Months Ended September 30, (Unaudited) SERIES 16 - ------------------------ 1998 1997 ---- - ---- Income Interest income $ 46,053 $ 24,547 --------- - - -------- Share of loss from Operating Partnerships (1,825,987) (1,560,995) ---------- -- - -------- Expenses Professional fees 44,038 55,750 Fund management fee (Note C) 298,694 321,831 Amortization 8,425 30,740 General and administrative expenses 23,651 34,880 ---------- -- - -------- 374,808 443,201 ---------- -- - -------- NET LOSS $(2,154,742) $(1,979,649) ========== ========== Net loss allocated to limited partners $(2,133,195) $(1,959,853) ========== ========== Net loss allocated to general partner $ (21,547) $ (19,796) ========== ========== Net loss per BAC $ (.39) $ (.36) ========== ========== The accompanying notes are an integral part of these statements. 15 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Six Months Ended September 30, (Unaudited) SERIES 17 - ------------------------ 1998 1997 ---- - ---- Income Interest income $ 3,556 $ 7,753 ---------- -- - -------- Share of loss from Operating Partnerships (1,660,513) (1,243,397) ---------- - ---------- Expenses Professional fees 35,709 34,967 Fund management fee (Note C) 256,509 256,824 Amortization 34,129 27,639 General and administrative expenses 20,628 27,348 ---------- - ---------- 346,975 346,778 ---------- - ---------- NET LOSS $(2,003,932) $(1,582,422) ========== ========== Net loss allocated to limited partners $(1,983,892) $(1,566,598) ========== ========== Net loss allocated to general partner $ (20,040) $ (15,824) ========== ========== Net loss per BAC $ (.40) $ (.31) ========== ========== The accompanying notes are an integral part of these statements. 16 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Six Months Ended September 30, (Unaudited) SERIES 18 - ---------------------- 1998 1997 ---- - ---- Income Interest income $ 25,535 $ 15,552 ---------- -- - -------- Share of loss from Operating Partnerships (1,040,838) (1,135,136) ---------- -- - -------- Expenses Professional fees 26,350 29,565 Fund management fee (Note C) 169,141 173,568 Amortization 21,084 21,084 General and administrative expenses 13,092 21,905 ---------- -- - -------- 229,667 246,122 ---------- -- - -------- NET LOSS $(1,244,970) $(1,365,706) ========== ========== Net loss allocated to limited partners $(1,232,520) $(1,352,049) ========== ========== Net loss allocated to general partner $ (12,450) $ (13,657) ========== ========== Net loss per BAC $ (.34) $ (.37) ========== ========== The accompanying notes are an integral part of these statements. 17 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Six Months Ended September 30, (Unaudited) SERIES 19 - ---------------------- 1998 1997 ---- - ---- Income Interest income $ 49,126 $ 41,853 ---------- -- - -------- Share of loss from Operating Partnerships (1,465,293) (1,135,207) ---------- -- - -------- Expenses Professional fees 24,275 27,674 Fund management fee (Note C) 200,924 77,143 Amortization 26,091 26,091 General and administrative expenses 17,671 30,563 ---------- -- - -------- 268,961 161,471 ---------- -- - -------- NET LOSS $(1,685,128) $(1,254,825) ========== ========== Net loss allocated to limited partners $(1,668,277) $(1,242,277) ========== ========== Net loss allocated to general partner $ (16,851) $ (12,548) ========== ========== Net loss per BAC $ (.41) $ (.30) ========== ========== The accompanying notes are an integral part of these statements. 18 Boston Capital Tax Credit Fund III L.P. STATEMENT OF CHANGES IN PARTNERS' CAPITAL Six Months Ended September 30, 1998 (Unaudited) Unrealized gain (loss) on securities available General for Assignees Partner sale, net Total --------- ------- --------- - ----- Partners' capital (deficit) April 1, 1998 $120,447,861 $(692,102) $ - $119,755,759 Net change in unrealized gain (loss) on secur- ities available for sale - - - - - Net income (loss) (8,455,041) (85,405) - (8,540,446) ----------- -------- --------- - ----------- Partners' capital (deficit), June 30, 1998 $111,992,820 $(777,507) $ - $111,215,313 =========== ======== ========= =========== The accompanying notes are an integral part of these statements. 19 Boston Capital Tax Credit Fund III L.P. STATEMENT OF CHANGES IN PARTNERS' CAPITAL Six Months Ended September 30, 1998 (Unaudited) Unrealized gain (loss) on securities available General for Assignees Partner sale,net Total --------- ------- -------- - ----- Series 15 - --------- Partners' capital (deficit), April 1, 1998 $15,156,864 $ (182,932) $ - $14,973,932 Net change in unrealized gain (loss) on secur- ities available for sale - - - - - Net income (loss) (1,437,157) (14,517) - (1,451,674) ---------- -------- ---------- - ---------- Partners' capital (deficit), June 30, 1998 $13,719,707 $ (197,449) $ - $13,522,258 ========== ======== ========== ========== Series 16 - --------- Partners' capital (deficit), April 1, 1998 $30,248,618 $ (165,780) $ - $30,082,838 Net change in unrealized gain (loss) on secur- ities available for sale - - - - - Net income (loss) (2,133,195) (21,547) - (2,154,742) ---------- -------- --------- - ---------- Partners' capital (deficit), September 30, 1998 $28,115,423 $(187,327) $ - $27,928,096 ========== ======== ========= ========== The accompanying notes are an integral part of these statements. 20 Boston Capital Tax Credit Fund III L.P. STATEMENT OF CHANGES IN PARTNERS' CAPITAL Six Months Ended September 30, 1998 (Unaudited) Unrealized gain (loss) on securities available General for Assignees Partner sale,net Total --------- ------- -------- - ----- Series 17 - --------- Partners' capital (deficit), April 1, 1998 $27,694,376 $(154,278) $ - $27,540,098 Net change in unrealized gain (loss) on secur- ities available for sale - - - - - Net income (loss) (1,983,892) (20,040) - (2,003,932) ---------- -------- --------- - ---------- Partners' capital (deficit), June 30, 1998 $25,710,484 $(174,318) $ - $25,536,166 ========== ======== ========= ========== Series 18 - --------- Partners' capital (deficit), April 1, 1998 $20,913,795 $(102,110) $ - $20,811,685 Net change in unrealized gain (loss) on secur- ities available for sale - - - - - Net income (loss) (1,232,520) (12,450) - (1,244,970) ---------- ------- --------- - ---------- Partners' capital (deficit), June 30, 1998 $19,681,275 $(114,560) $ - $19,566,715 ========== ======= ========= ========== The accompanying notes are an integral part of these statements. 21 Boston Capital Tax Credit Fund III L.P. STATEMENT OF CHANGES IN PARTNERS' CAPITAL Six Months Ended September 30, 1998 (Unaudited) Unrealized gain (loss) on securities available General for Assignees Partner sale,net Total --------- ------- -------- - ----- Series 19 - --------- Partners' capital (deficit), April 1, 1998 $26,434,208 $ (87,002) $ - $26,347,206 Net change in unrealized gain (loss) on secur- ities available for sale - - - - - Net income (loss) (1,668,277) (16,851) - (1,685,128) ---------- -------- ---------- - ---------- Partners' capital (deficit), September 30, 1998 $24,765,931 $(103,853) $ - $24,662,078 ========== ======== ========== ========== The accompanying notes are an integral part of these statements. 22 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Six Months Ended September 30, (Unaudited) 1998 1997 ---- - ---- Cash flows from operating activities: Net loss $ (8,540,446) $ (7,905,846) Adjustments Distributions from Operating Partnerships 15,507 17,436 Amortization 94,985 110,810 Share of loss from Operating Partnerships 7,131,081 6,486,219 Changes in assets and liabilities (Decrease) Increase in accounts payable and accrued expenses 47,965 (129) Decrease (Increase) in accounts receivable (171,382) (7,677) Decrease (Increase) in accounts payable affiliates 1,552,651 1,299,332 ---------- - ---------- Net cash (used in) provided by operating activities 130,361 145 ---------- - ---------- Cash flows from investing activities: Acquisition costs repaid (paid) for Operating Partnerships acquired or to acquire - - - Capital contributions paid to Operating Partnerships (156,214) (344,925) Advances to Operating Partnerships (79,236) - - Investments 225,648 (142,968) ---------- - - --------- Net cash (used in) provided by investing activities 9,802 (487,893) ---------- - ---------- 23 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Six Months Ended September 30, (Unaudited) 1998 1997 ---- - ---- Continued - --------- Cash flows from financing activity: Credit adjusters received from Operating Partnerships - - - ---------- - ---------- Net cash (used in) provided by financing activity - - - ---------- - ---------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (120,559) (487,748) ---------- - ---------- Cash and cash equivalents, beginning 1,653,522 3,925,706 ---------- - ---------- Cash and cash equivalents, ending $ 1,774,081 $ 3,437,958 ========== ========== Supplemental schedule of noncash investing and financing activates: The fund has increased its investments for unpaid capital contributions due to the Operating Partnerships $ - $ - - ========== ========== The accompanying notes are an integral part of these statements. 24 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Six Months Ended September 30, (Unaudited) Series 15 - ------------------------- 1998 1997 ---- - ---- Cash flows from operating activities: Net loss $(1,451,674) $(1,723,244) Adjustments Distributions from Operating Partnerships 874 3,017 Amortization 5,256 5,256 Share of loss from Operating Partnerships 1,138,450 1,411,484 Changes in assets and liabilities (Decrease) increase in accounts payable and accrued expenses 322 1 Decrease (Increase) in accounts receivable (444) - - Decrease (Increase) in accounts payable affiliates 441,965 274,026 -------- - - -------- Net cash (used in) provided by operating activities 134,749 (29,460) -------- - - -------- Cash flows from investing activities: Acquisition costs repaid (paid) for Operating Partnerships acquired or to acquire - - - Capital contributions paid to Operating Partnerships - (145,068) Advances to Operating Partnerships (186,247) - - Investments (3,028) - - -------- - - -------- Net cash (used in) provided by investing activities (189,275) (145,068) -------- - - -------- 25 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Six Months Ended September 30, (Unaudited) Series 15 - ---------------------- 1998 1997 ---- - ---- Continued - --------- Cash flows from financing activity: Credit adjusters received from Operating Partnerships - - - -------- - -------- Net cash (used in) provided by financing activity - - - -------- - -------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (54,526) (174,528) Cash and cash equivalents, beginning 156,717 246,845 -------- - -------- Cash and cash equivalents, ending $ 102,191 $ 72,317 ======== ======== Supplemental schedule of noncash investing and financing activities The Fund has increased its investments for unpaid capital contributions due to the Operating Partnerships $ - $ - - ======== ========= The accompanying notes are an integral part of these statements. 26 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Six Months Ended September 30, (Unaudited) Series 16 - ------------------------- 1998 1997 ---- - ---- Cash flows from operating activities: Net loss $(2,154,742) $(1,979,649) Adjustments Distributions from Operating Partnerships 635 2,653 Amortization 8,425 30,740 Share of loss from Operating Partnerships 1,825,987 1,560,995 Changes in assets and liabilities (Decrease) increase in accounts payable and accrued expenses 457 - - Decrease (Increase) in accounts receivable (20,162) (786) Decrease (Increase) in accounts payable affiliates 345,985 345,995 ---------- - ---------- Net cash (used in) provided by operating activities 6,585 (40,052) ---------- - ---------- Cash flows from investing activities: Acquisition costs repaid (paid) for Operating Partnerships acquired or to acquire - - - Capital contributions paid to Operating Partnerships (1,500) (9,914) Advances to Operating Partnerships - - - Investments 121,291 (29,262) ---------- - ---------- Net cash (used in) provided by investing activities 119,791 (39,176) ---------- - ---------- 27 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Six Months Ended September 30, (Unaudited) Series 16 - ----------------------- 1998 1997 ---- - ----- Continued - --------- Cash flows from financing activity: Credit adjusters received from Operating Partnerships - - - --------- - ---------- Net cash (used in) provided by financing activity - - - --------- - ---------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 126,376 (79,228) Cash and cash equivalents, beginning 199,558 1,183,424 ---------- - ---------- Cash and cash equivalents, ending $ 325,934 $ 1,104,196 ========== ========== Supplemental schedule of noncash investing and financing activities: The Fund has increased its investments for unpaid capital contributions due to the Operating Partnerships $ - $ - - ========== ========== The accompanying notes are an integral part of these statements. 28 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Six Months Ended September 30, (Unaudited) Series 17 - ------------------------- 1998 1997 ---- - ---- Cash flows from operating activities: Net loss $(2,003,932) $(1,582,422) Adjustments Distributions from Operating Partnerships 7,803 5,570 Amortization 34,129 27,639 Share of loss from Operating Partnerships 1,660,513 1,243,397 Changes in assets and liabilities (Decrease) increase in accounts payable and accrued expenses 46,596 - - Decrease (Increase) in accounts receivable (130,949) (3,807) Decrease (Increase) in accounts payable affiliates 368,053 282,684 ---------- - ---------- Net cash (used in) provided by operating activities (17,787) (26,939) ---------- - ---------- Cash flows from investing activities: Acquisition costs repaid (paid) for Operating Partnerships acquired or to acquire - - - Capital contributions paid to Operating Partnerships - (4,000) Advances to Operating Partnerships - - - Investments - - - ---------- - ---------- Net cash (used in) provided by investing activates - (4,000) ---------- - ---------- 29 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Six Months Ended September 30, (Unaudited) Series 17 - ------------------------ 1998 1997 ---- ---- Continued - --------- Cash flows from financing activity: Credit adjusters received from Operating Partnerships - - - ---------- - ---------- Net cash (used in) provided by financing activity - - - ---------- - ---------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (17,787) (30,939) Cash and cash equivalents, beginning 388,024 539,185 ---------- - ---------- Cash and cash equivalents, ending $ 370,237 $ 508,246 ========== ========== Supplemental schedule of noncash investing and financing activities: The Fund has increased its investments for unpaid capital contributions due to the Operating Partnerships $ - $ - - ========== ========== The accompanying notes are an integral part of these statements. 30 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Six Months Ended September 30, (Unaudited) Series 18 - ------------------------- 1998 1997 ---- - ---- Cash flows from operating activities: Net loss $(1,244,970) $(1,365,706) Adjustments Distributions from Operating Partnerships 6,130 1,132 Amortization 21,084 21,084 Share of loss from Operating Partnerships 1,040,838 1,135,136 Changes in assets and liabilities (Decrease) increase in accounts payable and accrued expenses 272 (129) Decrease (Increase) in accounts receivable (3,390) (367) Decrease (Increase) in accounts payable affiliates 190,974 190,953 ---------- - ---------- Net cash (used in) provided by operating activities 10,938 (17,897) ---------- - ---------- Cash flows from investing activities: Acquisition costs repaid (paid) for Operating Partnerships acquired or to acquire - - - Capital contributions paid to Operating Partnerships (154,714) (38,320) Advances to Operating Partnerships (14,280) - - Investments 119,676 (15.416) ---------- - ---------- Net cash (used in) provided by investing activities (49,318) (53,736) ---------- - ---------- 31 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Six Months Ended September 30, (Unaudited) Series 18 - ----------------------- 1998 1997 ---- ---- Continued - --------- Cash flows from financing activity: Credit adjusters received from Operating Partnerships - - - --------- - ---------- Net cash (used in) provided by financing activity - - - --------- - ---------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (38,380) (71,633) Cash and cash equivalents, beginning 301,444 766,409 --------- - ---------- Cash and cash equivalents, ending $ 263,064 $ 694,776 ========= ========== Supplemental schedule of noncash investing and financing activities: The Fund has increased its investments for unpaid capital contributions due to the Operating Partnerships $ - $ - - ========= ========= The accompanying notes are an integral part of these statements. 32 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Six Months Ended September 30, (Unaudited) Series 19 - ------------------------- 1998 1997 ---- - ---- Cash flows from operating activities: Net loss $(1,685,128) $(1,254,825) Adjustments Distributions from Operating Partnerships 65 5,064 Amortization 26,091 26,091 Share of loss from Operating Partnerships 1,465,293 1,135,207 Changes in assets and liabilities (Decrease) increase in accounts payable and accrued expenses 318 (1) Decrease (Increase) in accounts receivable (16,437) (2,717) Decrease (Increase) in accounts payable affiliates 205,674 205,674 ---------- - ---------- Net cash (used in) provided by operating activities (4,124) 114,493 ---------- - ---------- Cash flows from investing activities: Acquisition costs repaid (paid) for Operating Partnerships acquired or to acquire - - - Capital contributions paid to Operating Partnerships - (147,623) Advances to Operating Partnerships - - - Investments 109,000 (98,290) ---------- - ---------- Net cash (used in) provided by investing activities 109,000 (245,913) ---------- - --------- 33 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Six Months Ended September 30, (Unaudited) Series 19 - ------------------------ 1998 1997 ---- ---- Continued - --------- Cash flows from financing activity: Credit adjusters received from Operating Partnerships - - - ---------- - ---------- Net cash (used in) provided by financing activity - - - ---------- - ---------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 104,876 (131,420) Cash and cash equivalents, beginning 607,779 1,189,843 ---------- - ---------- Cash and cash equivalents, ending $ 712,655 $ 1,058,423 ========== ========== Supplemental schedule of noncash investing and financing activities: The Fund has increased its investments for unpaid capital contributions due to the Operating Partnerships $ - $ - - ========== ========== The accompanying notes are an integral part of these statements. 34 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS September 30, 1998 (Unaudited) NOTE A - ORGANIZATION Boston Capital Tax Credit Fund III L.P. (the "Fund") was formed under the laws of the State of Delaware as of September 19, 1991 for the purpose of acquiring, holding, and disposing of limited partnership interests in Operating Partnerships which will acquire, develop, rehabilitate, operate and own newly constructed, existing or rehabilitated low-income apartment complexes ("Operating Partnerships"). The general partner of the Fund is Boston Capital Associates III L.P., a Delaware limited partnership. Boston Capital Associates, a Massachusetts general partnership, whose only two partners are Herbert F. Collins and John P. Manning, the principals of Boston Capital Partners, Inc., is the sole general partner of the general partner. The limited partner of the general partner is Capital Investment Holdings, a general partnership whose partners are certain officers and employees of Boston Capital Partners, Inc., and its affiliates. The Assignor Limited Partner is BCTC III Assignor Corp., a Delaware corporation which is wholly-owned by Herbert F. Collins and John P. Manning. Pursuant to the Securities Act of 1933, the Fund filed a Form S-11 Registration Statement with the Securities and Exchange Commission, effective January 24, 1992 which covered the offering (the "Public Offering") of the Fund's beneficial assignee certificates ("BACs") representing assignments of units of the beneficial interest of the limited partnership interest of the Assignor Limited Partner. The Fund registered 20,000,000 BACs at $10 per BAC for sale to the public in one or more series. On September 4, 1993 the Fund filed an amendment to Form S-11 with the Securities and Exchange Commission which registered an additional 2,000,000 BACs at $10 per BAC for sale to the public in one or more series. The registration for the additional BACs became effective on October 6, 1993. Offers and sales of BACs in Series 15 through 19 of the Fund were completed and the last of the BACs in Series 15, 16, 17, 18 and 19 were issued by the Fund on June 26, 1992, December 28, 1992, June 17, 1993, September 22, 1993, and December 17, 1993, respectively. The Fund sold 3,870,500 of Series 15 BACs, for a total of $38,705,000; 5,429,402 of Series 16 BACs, for a total of $54,293,000; 5,000,000 of Series 17 BACs, for a total of $50,000,000; 3,616,200 of Series 18 BACs, for a total of $36,162,000; and 4,080,000 of Series 19 BACs, for a total of $40,800,000. The Fund issued the last BACs in Series 19 on December 17, 1993. This concluded the Public Offering of the Fund. 35 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED September 30, 1998 (Unaudited) NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES The condensed financial statements included herein as of September 30, 1998 and for the three and six months then ended have been prepared by the Fund, without audit. The Fund accounts for its investments in Operating Partnerships using the equity method, whereby the Fund adjusts its investment cost for its share of each Operating Partnership's results of operations and for any distributions received or accrued. Costs incurred by the Fund in acquiring the investments in the Operating Partnerships are capitalized to the investment account. The Fund's accounting and financial reporting policies are in conformity with generally accepted accounting principles and include adjustments in interim periods considered necessary for a fair presentation of the results of operations. Such adjustments are of a normal recurring nature. Investment Securities - --------------------- The Fund has determined that all of it's investment securities are to be categorized as securities available for sale. Securities classified as available for sale are those debt securities that the Fund purchased that may be liquidated prior to the maturity date should the need arise. These securities are carried at approximate fair market value. The amortized cost of securities available for sale as of September 30, 1998 by contractual maturity are as follows: Amortized Cost ----------- Due in one year or less $2,623,928 Due after one year - --------- Total $2,623,928 ========= The fair market value of the securities is $2,623,928. 36 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED September 30, 1998 (Unaudited) NOTE - B ACCOUNTING AND FINANCIAL REPORTING POLICIES - CONTINUED Amortized cost is the face value of the securities and any unamortized premium or discount. The balance sheet reflects the fair market value under investments. Amortization - ------------ The Fund amortizes organizational costs over 60 months. As of September 30, 1998 and 1997 the Fund has accumulated organization amortization totaling $912,057 and $790,707 respectively. The breakdown of accumulated organization amortization within the Fund as of September 30, 1998 and 1997 is as follows: 1998 1997 ---- ---- Series 15 $167,077 $167,077 Series 16 227,909 205,594 Series 17 205,888 175,219 Series 18 146,901 116,147 Series 19 164,282 126,670 ------- ------- $912,057 $790,707 ======= ======= On July 1, 1995, the Fund began amortizing unallocated acquisition costs over 330 months from April 1, 1995. As of September 30, 1998 the Fund has accumulated unallocated acquisition amortization totaling $262,197. The breakdown of accumulated unallocated acquisition amortization within the fund as of September 30, 1998 for Series 15, Series 16, Series 17, Series 18, and Series 19 is $36,890, $58,983, $77,878, $40,077 and $48,369, respectively. NOTE C - RELATED PARTY TRANSACTIONS The Fund has entered into several transactions with various affiliates of the general partner, including Boston Capital Partners, Inc., and Boston Capital Asset Management Limited Partnership (formerly Boston Capital Communications Limited Partnership) as follows: Boston Capital Partners, Inc. is entitled to asset acquisition fees for selecting, evaluating, structuring, negotiating, and closing the Fund's acquisition of interests in the Operating Partnerships. Prior to the quarter ended September 30, 1998 all series had completed payment of all acquisition fees due to Boston Capital Partners, Inc. 37 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED September 30, 1998 (Unaudited) NOTE C - RELATED PARTY TRANSACTIONS - CONTINUED An annual fund management fee based on .5 percent of the aggregate cost of all apartment complexes owned by the Operating Partnerships, has been accrued to Boston Capital Asset Management Limited Partnership (formerly Boston Capital Communications Limited Partnership). The fund management fees accrued for the quarter ended September 30, 1998 and 1997 are as follows: 1998 1997 ---- ---- Series 15 $137,013 $137,013 Series 16 172,995 172,995 Series 17 141,342 142,488 Series 18 95,487 95,487 Series 19 102,837 102,837 ------- ------- $649,674 $650,820 ======= ======= NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS At September 30, 1998 and 1997, the Fund had limited partnership interests in 241 Operating Partnerships which own or are constructing apartment complexes. The breakdown of Operating Partnerships within the Fund at September 30, 1998 and 1997 is as follows: Series 15 68 Series 16 64 Series 17 49 Series 18 34 Series 19 26 --- 241 === 38 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED September 30, 1998 (Unaudited) NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS - CONTINUED Under the terms of the Fund's investment in each Operating Partnership, the Fund is required to make capital contributions to the Operating Partnerships. These contributions are payable in installments over several years upon each Operating Partnership achieving specified levels of construction and/or operations. The contributions payable at September 30, 1998 and 1997 are as follows: 1998 1997 ---- ---- Series 15 $ 32,922 $ 34,528 Series 16 143,811 145,311 Series 17 1,367,195 1,840,259 Series 18 562,921 717,635 Series 19 463,000 684,180 --------- ---------- $2,569,849 $ 3,421,913 ========= ========== The Fund's fiscal year ends March 31st of each year, while all the Operating Partnerships' fiscal years are the calendar year. Pursuant to the provisions of each Operating Partnership Agreement, financial results for each of the Operating Partnerships are provided to the Fund within 45 days after the close of each Operating Partnership's quarterly period. Accordingly, the current financial results available for the Operating Partnerships are for the six months ended June 30, 1998. 39 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED September 30, 1998 (Unaudited) NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued) COMBINED SUMMARIZED STATEMENTS OF OPERATIONS Six months ended June 30, (Unaudited) Series 15 - --------------------------- 1998 1997 ---- ---- Revenues Rental $ 4,749,918 $ 4,675,328 Interest and other 238,332 218,980 --------- - --------- 4,988,250 4,894,308 --------- - --------- Expenses Interest 1,429,297 1,508,149 Depreciation and amortization 1,871,234 2,034,327 Operating expenses 3,025,819 2,871,634 --------- - --------- 6,326,350 6,414,110 --------- - --------- NET LOSS $(1,338,100) $(1,519,802) ========= ========= Net loss allocated to Boston Capital Tax Credit Fund III L.P. $(1,138,450) $(1,411,484) ========= ========= Net loss allocated to other partners $ (13,381) $ (15,198) ========= ========= Net loss suspended $ (186,269) $ (93,120) ========= ========= The Fund accounts for its investments using the equity method of accounting. Under the equity method of accounting, the partnership adjusts its investment cost for its share of each Operating Partnership's results of operations and for any distributions received or accrued. However, the Partnership recognizes individual operating losses only to the extent of capital contributions. Excess losses are suspended for use in future years to offset excess income. 40 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED September 30, 1998 (Unaudited) NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued) COMBINED SUMMARIZED STATEMENTS OF OPERATIONS Six months ended June 30, (Unaudited) Series 16 - -------------------------- 1998 1997 ---- ---- Revenues Rental $ 6,012,307 $ 6,076,922 Interest and other 473,062 492,341 ---------- - ---------- 6,485,369 6,569,263 ---------- - ---------- Expenses Interest 2,112,658 2,140,469 Depreciation and amortization 2,277,728 2,257,796 Operating expenses 3,968,245 3,747,760 ---------- - ---------- 8,358,630 8,146,025 ---------- - ---------- NET LOSS $(1,873,261) $(1,576,762) ========== ========== Net loss allocated to Boston Capital Tax Credit Fund III L.P. $(1,825,987) $(1,560,995) ========== ========== Net loss allocated to other partners $ (47,274) $ (15,767) ========== ========== Net loss suspended $ (28,541) $ - - ========== ========== The Fund accounts for its investments using the equity method of accounting. Under the equity method of accounting, the partnership adjusts its investment cost for its share of each Operating Partnership's results of operations and for any distributions received or accrued. However, the Partnership recognizes individual operating losses only to the extent of capital contributions. Excess losses are suspended for use in future years to offset excess income. 41 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED September 30, 1998 (Unaudited) NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued) COMBINED SUMMARIZED STATEMENTS OF OPERATIONS Six Months ended June 30, (Unaudited) Series 17 - -------------------------- 1998 1997 Revenues ---- ---- Rental $ 5,385,005 $ 6,125,371 Interest and other 305,686 251,581 ---------- - --------- 5,690,691 6,376,952 ---------- - --------- Expenses Interest 2,083,741 2,296,620 Depreciation and amortization 2,104,727 1,993,456 Operating expenses 3,179,509 3,342,831 ---------- - --------- 7,367,977 7,632,907 ---------- - --------- NET LOSS $(1,677,286) $(1,255,955) ========== ========= Net loss allocated to Boston Capital Tax Credit Fund III L.P. $(1,660,513) $(1,243,397) ========== ========= Net loss allocated to other partners $ (16,773) $ (12,558) ========== ========= The Fund accounts for its investments using the equity method of accounting. Under the equity method of accounting, the partnership adjusts its investment cost for its share of each Operating Partnership's results of operations and for any distributions received or accrued. However, the Partnership recognizes individual operating losses only to the extent of capital contributions. Excess losses are suspended for use in future years to offset excess income. 42 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED September 30, 1998 (Unaudited) NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued) COMBINED SUMMARIZED STATEMENTS OF OPERATIONS Six months ended June 30, (Unaudited) Series 18 - ---------------------------- 1998 1997 Revenues ---- ---- Rental $ 3,062,836 $3,052,863 Interest and other 116,280 151,299 --------- - --------- 3,179,116 3,204,162 --------- - --------- Expenses Interest 1,105,161 1,116,578 Depreciation and amortization 1,370,740 1,426,453 Operating expenses 1,788,878 1,807,734 --------- - --------- 4,264,780 4,350,765 --------- - --------- NET LOSS $(1,085,663) $(1,146,603) ========= ========= Net loss allocated to Boston Capital Tax Credit Fund III L.P. $(1,040,838) $(1,135,136) ========= ========= Net loss allocated to other partners $ (10,857) $ (11,467) ========= ========= Net loss suspended $ (33,969) $ - - ========= ========= The Fund accounts for its investments using the equity method of accounting. Under the equity method of accounting, the partnership adjusts its investment cost for its share of each Operating Partnership's results of operations and for any distributions received or accrued. However, the Partnership recognizes individual operating losses only to the extent of capital contributions. Excess losses are suspended for use in future years to offset excess income. 43 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED September 30, 1998 (Unaudited) NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued) COMBINED SUMMARIZED STATEMENTS OF OPERATIONS Six months ended June 30, (Unaudited) Series 19 - -------------------------- 1998 1997 Revenues ---- ---- Rental $ 4,396,231 $ 4,338,435 Interest and other 155,810 148,618 --------- - --------- 4,552,041 4,487,053 --------- - --------- Expenses Interest 1,765,501 1,815,802 Depreciation and amortization 1,964,599 1,488,051 Operating expenses 2,302,035 2,329,874 --------- - --------- 6,032,135 5,633,727 --------- - --------- NET LOSS $(1,480,094) $(1,146,674) ========= ========= Net loss allocated to Boston Capital Tax Credit Fund III L.P. $(1,465,293) $(1,135,207) ========= ========= Net loss allocated to other partners $ (14,801) $ (11,467) ========= ========= The Fund accounts for its investments using the equity method of accounting. Under the equity method of accounting, the partnership adjusts its investment cost for its share of each Operating Partnership's results of operations and for any distributions received or accrued. However, the Partnership recognizes individual operating losses only to the extent of capital contributions. Excess losses are suspended for use in future years to offset excess income. 44 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED September 30,1998 (Unaudited) NOTE D - INVESTMENT IN OPERATING PARTNERSHIPS-CONTINUED When comparing the results of operations from the operating partnerships for the six months ended June 30, 1998 and June 30, 1997 for Series 17 and 19, variances, some material in nature, exist. The variances are the result of a number of factors including an increase in the number of Operating Partnerships which have completed construction, and an increase in the number which have completed the lease-up phase. Smaller variances are anticipated in future years since the Fund has finished acquiring Operating Partnerships, construction is complete on all of the Operating Partnerships and most have completed the lease-up phase. NOTE E - TAXABLE LOSS The Fund's taxable loss for the fiscal year ended March 31, 1999 is expected to differ from its loss for financial reporting purposes. This is primarily due to accounting differences in depreciation incurred by the Operating Partnerships and also differences between the equity method of accounting and the IRS accounting methods. No provision or benefit for income taxes has been included in these financial statements since taxable income or loss passes through to, and is reportable by, the partners and assignees individually. 45 Item 2. Management's Discussions and Analysis of Financial Condition and Results of Operations Liquidity - --------- The Fund's primary source of funds is the proceeds of its Public Offering. Other sources of liquidity will include (i) interest earned on capital contributions held pending investment and on Working Capital Reserves and (ii) cash distributions from operations of the operating Partnerships in which the Fund has and will invest. Interest income is expected to decrease over the life of the Fund as capital contributions are paid to the Operating Partnerships and Working Capital Reserves are expended. The Fund does not anticipate significant cash distributions from operations of the Operating Partnerships. The Fund is currently accruing the fund management fee. Pursuant to the Partnership Agreement, such liabilities will be deferred until the Fund receives sales of refinancing proceeds from Operating Partnerships which will be used to satisfy such liabilities. The Fund's working capital and sources of liquidity coupled with affiliated party liability accruals allow sufficient levels of liquidity to meet the third party obligations of the Fund. The Fund is currently unaware of any trends which would create insufficient liquidity to meet future third party obligations. Capital Resources - ----------------- The Fund offered BACs in a Public Offering declared effective by the Securities and Exchange Commission on January 24, 1992. The Fund received $38,705,000, $54,293,000, $50,000,000, $36,162,000 and $40,800,000 representing 3,870,500, 5,429,402, 5,000,000, 3,616,200 and 4,080,000 BACs from investors admitted as BAC Holders in Series 15, Series 16, Series 17, Series 18, and Series 19, respectively. The Public Offering was completed on December 17, 1993. (Series 15) The Fund commenced offering BACs in Series 15 on January 24, 1992. Offers and sales of BACs in Series 15 were completed on June 26, 1992. The Fund has committed proceeds to pay initial and additional installments of capital contributions to 68 Operating Partnerships in the amount of $28,257,701. During the quarter ended September 30, 1998, none of Series 15 net offering proceeds had been used to pay capital contributions. Series 15 net offering proceeds in the amount of $32,922 remain to be used by the Fund to pay remaining capital contributions to the Operating Partnerships that Series 15 has invested in as of September 30, 1998. (Series 16) The Fund commenced offering BACs in Series 16 on July 13, 1992. Offers and sales of BACs in Series 16 were completed on December 28, 1992. The Fund has committed proceeds to pay initial and additional installments of capital contributions to 64 Operating Partnerships in the amount of $39,579,774. 46 During the quarter ended September 30, 1998, $1,500 of Series 16 net offering proceeds had been used to pay capital contributions. Series 16 net offering proceeds in the amount of $143,811 remain to be used by the Fund to pay remaining capital contributions to the Operating Partnerships that Series 16 has invested in as of September 30, 1998. (Series 17) The Fund commenced offering BACs in Series 17 on January 24, 1993. Offers and sales of BACs in Series 17 were completed on June 17, 1993. The Fund has committed proceeds to pay initial and additional installments of capital contributions to 49 Operating Partnerships in the amount of $36,538,204. During the quarter ended September 30, 1998, none of Series 17 net offering proceeds had been used to pay capital contributions. Series 17 net offering proceeds in the amount of $370,237 remain to be used by the Fund to pay remaining capital contributions to the Operating Partnerships that Series 17 has invested in as of September 30, 1998. (Series 18) The Fund commenced offering BACs in Series 18 on June 17, 1993. Offers and sales of BACs in Series 18 were completed on September 22, 1993. The Fund has committed proceeds to pay initial and additional installments of capital contributions to 34 operating Partnerships in the amount of $26,442,202. During the quarter ended September 30, 1998, none of Series 18 net offering proceeds had been used to pay capital contributions. Series 18 net offering proceeds in the amount of $263,064 remain to be used by the Fund to pay remaining capital contributions to the Operating Partnerships that Series 18 has invested in as of September 30, 1998. (Series 19). The Fund commenced offering BACs in Series 19 on October 8, 1993. Offers and sales of BACs in Series 19 were completed on December 17, 1993. The Fund has committed proceeds to pay initial and additional installments of capital contributions to 26 Operating Partnerships in the amount of $29,614,506. During the quarter ended September 30, 1998, none of Series 19 net offering proceeds had been used to pay capital contributions. Series 19 net offering proceeds in the amount of $463,000 remain to be used by the Fund to pay remaining capital contributions to the Operating Partnerships that Series 19 has invested in as of September 30, 1998. Results of Operations - --------------------- As of September 30, 1998 and 1997 the Fund held limited partnership interests in 241 Operating Partnerships. In each instance the Apartment Complex owned by the applicable Operating Partnership is eligible for the 47 Federal Housing Tax Credit. Occupancy of a unit in each Apartment Complex which initially complied with the Minimum Set-Aside Test (i.e., occupancy by tenants with incomes equal to no more than a certain percentage of area median income) and the Rent Restriction Test (i.e., gross rent charged tenants does not exceed 30% of the applicable income standards) is referred to hereinafter as "Qualified Occupancy." Each of the Operating Partnerships and each of the respective Apartment Complexes are described more fully in the Prospectus or applicable report on Form 8-K. The General Partner believes that there is adequate casualty insurance on the properties. The results of operations for future periods are likely to vary from those for the period ended September 30, 1998. The losses from Operating Partnerships reported for this interim period are not necessarily indicative of the results anticipated for future periods as some of these Operating Partnerships are in the lease-up phase. The Fund incurred a fund management fee to Boston Capital Asset Management Limited Partnerships (formerly Boston Capital Communications Limited Partnership) in an amount equal to .5 percent of the aggregate cost of the apartment complexes owned by the Operating Partnerships, less the amount of certain asset management and reporting fees paid by the Operating Partnerships. The fund management fees incurred for the quarter ended September 30, 1998 for Series 15, Series 16, Series 17, Series 18 and Series 19 were $131,763, $162,005, $138,342, $80,434, and $100,587 respectively. The Fund's investment objectives do not include receipt of significant cash distributions from the Operating Partnerships in which it has invested or intends to invest. The Fund's investments in Operating Partnerships have been and will be made principally with a view towards realization of Federal Housing Tax Credits for allocation to its partners and BAC holders. (Series 15) As of September 30, 1998 and 1997, the average qualified occupancy for the series was 100% for both years. The series had a total of 68 properties at September 30, 1998, 68 of which were at 100% qualified occupancy. For the six months being reported Series 15 reflects a net loss from Operating Partnerships of $1,338,100. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $533,134. This is an interim period estimate; it is not necessarily indicative of the final year end results. 48 The physical occupancy of California Investors VII Limited Partnership (Summit Ridge Apartments/Longhorn Pavillion) as of September 30, 1998 was 89%. The property had previously suffered operational difficulties due to more expensive debt and high expenses. All indications are that, despite a difficult marketplace, the property is competing effectively. As a result of a diligent effort to control costs, the property has generated a positive operational cash flow year-to-date. The Operating General Partner is optimistic about the continued positive prospects for this property. The Operating General Partner of Hidden Cove Apartments (Hidden Cove) is funding the capital improvements plan established by the new management company. As of the end of September occupancy was at 95%. Once the repairs are completed and operations have stabilized the Operating General Partner will approach the first mortgage holder with a refinancing plan. The Operating General Partner and the management company of School Street I Limited Partnership (School Street Apts. I) were removed and replaced during 1997. In the transition, occupancies suffered and as a result, a leasing agent and new management company were hired by the new Operating General Partner to rent the vacant units. Due to the unresponsiveness of the management company, a fourth management company was hired in October 1998. Occupancy was at approximately 79% in October 1998. It is anticipated that all units will be fully leased within the next three months. In addition, a refinancing application has been filed with the state housing agency, in hopes to further improve operations. Any capital needs are anticipated to be addressed as part of the refinancing package. (Series 16) As of September 30, 1998 and 1997, the average qualified occupancy for the series was 99.6% for both years. The series had a total of 64 properties at September 30, 1998. Out of the total, 61 had 100% qualified occupancy. For the six months being reported Series 16 reflects a net loss from Operating Partnerships of $1,873,261. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $404,467. This is an interim period estimate; it is not necessarily indicative of the final year end results. The Operating General Partner of Mariner's Pointe Limited Partnership I and Mariner's Pointe Limited Partnership II (Mariner's Pointe Apartment and Mariners's Pointe Apartments II) pledged his general partner interest to an unaffiliated lending institution in violation of the Operating Partnership Agreement. As this was a violation of the terms of the agreement, the Operating General Partner and the management company were removed and replaced during 1997. The property operated with deficits during 1997 due to vacancies, uncollected rents and high operating expenses. The new management company continues to focus on reducing the property's operating expenses and reducing vacancies. 49 However, the property has not been operating profitably in the second half of 1998. The Operating General Partner will be monitoring the situation with the management company. In addition the Operating General Partner will be filing refinancing applications with the lender by year-end to further improve operations (Series 17) As of September 30, 1998 and 1997, the average qualified occupancy for the series was 99.7% for both years. The series had a total of 49 properties at September 30, 1998. Out of the total 48 had 100% qualified occupancy. For the six months being reported Series 17 reflects a net loss from Operating Partnerships of $1,677,286. When adjusted for depreciation, which, is a non-cash item, the Operating Partnerships reflect positive operations of $427,441. This is an interim period estimate; it is not necessarily indicative of the final year end results. Annadale Housing Partners (Annadale Apartments) has reported net losses due to operational issues associated with the property. Although occupancy has stabilized, economic factors relevant to the marketplace prevent the necessary rental income to be generated to cover the operational expenses. The Operating General Partner has initiated loan restructure discussions with the first lender. The Investment General Partner continues to monitor this situation closely. Occupancy is at 95% as of September 30, 1998. The physical occupancy of California Investors VII Limited Partnership (Summit Ridge Apartments/Longhorn Pavillion) as of September 30, 1998 was 89%. The property had previously suffered operational difficulties due to more expensive debt and high expenses. All indications are that, despite a difficult marketplace, the property is competing effectively. As a result of a diligent effort to control costs, the property has generated a positive operational cash flow year-to-date. The Operating General Partner is optimistic about the continued positive prospects for this property. The property owned by California Investors VI L.P. (Orchard Park) continues to suffer from physical occupancy issues. Occupancy at September 30, 1998 was at 85%. The occupancy problem appears to be related to the marketplace, but the management company has replaced the site manager in hopes that changes in personnel will stimulate new interest in the property. The management company continues to be aggressive with marketing the property and conducting active outreach. The Operating General Partner, with the assistance of a consultant, is developing a new marketing campaign, which will be implemented during the November 1998. The curb appeal of the property has improved with capital repairs completed during 1997. (Series 18) As of September 30, 1998 and 1997 the average qualified occupancy for the series was 100%, for both years. The series had a total of 34 properties at September 30, 1998, out of the total all had 100% qualified occupancy. 50 For the six months being reported Series 18 reflects a net loss from Operating Partnerships of $1,085,663. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $285,077. This is an interim period estimate; it is not necessarily indicative of the final year end results. In August 1996 the Investment General Partner was notified that Virginia Avenue Affordable Limited Partnership (Kristine Apartments) was named as defendant in a land encroachment complaint. Initial efforts to settle the complaint were unsuccessful, but recently a judgement was issued by which the Operating Partnership would receive an appropriate quit claim deed and other title related documents confirming the Operating Partnership's interest in the disputed property. The appropriate title information has been received by the Operating General Partner and is in the process of execution. The delivery of these documents will remove any uncertainty as to the partnership's possession of the land. (Series 19) As of September 30, 1998 and 1997 the average qualified occupancy for the series was 99.8%, and 100%, respectively. The series had a total of 26 properties at September 30, 1998, 25 of which were at 100% qualified occupancy. For the six months being reported Series 19 reflects a net loss from Operating Partnerships of $1,480,094. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $484,505. This is an interim period estimate; it is not necessarily indicative of the final year end results. 51 PART II - OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits None (b) Reports on Form 8-K 52 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BOSTON CAPITAL TAX CREDIT FUND III L.P. By: Boston Capital Associates III L.P. By: C&M Associates d/b/a Boston Capital Associates Date: November 19, 1998 By: /s/ John P. Manning ------------------- John P. Manning, Partner & Principal Financial Officer 53 EX-27 2
CT 0000879555 BOSTON CAPITAL TAX CREDIT FUND III LP 6-MOS MAR-31-1999 APR-01-1998 SEP-30-1998 124,093,743 0 0 0 0 124,093,743 129,246 0 (8,669,692) 0 0 0 (8,540,446) 0 0
-----END PRIVACY-ENHANCED MESSAGE-----