-----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, WfXRnUrCnxvJe9pv//LsxVrkTp1BqWnlYVHL1/eY/2scbjSWHOvg4cvkAwFa7oTn +D+9XcpxYojvNSu0fYQyYQ== 0000879555-99-000003.txt : 19990219 0000879555-99-000003.hdr.sgml : 19990219 ACCESSION NUMBER: 0000879555-99-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990218 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: 99545356 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 December 31, 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 December 31, 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 December 31, March 31, 1998 1998 (Unaudited) (Audited) ASSETS ------------ - ------------ INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $110,986,281 $121,032,270 OTHER ASSETS Cash and cash equivalents 2,162,961 1,653,522 Investments 2,421,463 2,970,867 Notes receivable 1,364,322 2,056,333 Deferred acquisition costs, net of accumulated amortization (Note B) 1,606,142 1,681,137 Organization costs, net of accumulated amortization (Note B) 9,573 67,358 Other assets 2,255,801 1,728,300 ----------- - ----------- $120,806,543 $131,189,787 =========== =========== LIABILITIES Accounts payable & accrued expenses (Note C) $ 112,762 $ 4,553 Accounts payable affiliates 10,959,121 8,703,412 Capital contributions payable (Note D) 2,025,482 2,726,063 ----------- - ----------- 13,097,365 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 December 31, 1998 108,521,745 120,447,861 General Partner (812,567) (692,102) ----------- - ----------- 107,709,178 119,755,759 ----------- - ----------- $120,806,543 $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 - ---------------------------- December 31, March 31, 1998 1998 (Unaudited) (Audited) ASSETS ----------- - --------- INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $14,492,103 $16,246,406 OTHER ASSETS Cash and cash equivalents 349,183 156,717 Investments 128,028 125,000 Notes receivable 32,170 110,000 Deferred acquisition costs, net of accumulated amortization (Note B) 249,652 257,535 Organization costs, net of accumulated amortization (Note B) - - - Other assets 714,964 473,086 ---------- - ---------- $15,966,100 $17,368,744 ========== ========== LIABILITIES Accounts payable and accrued expenses (Note C) $ 1,146 $ 1,145 Accounts payable affiliates 2,993,107 2,360,745 Capital contributions payable (Note D) 32,922 32,922 ---------- - ---------- 3,027,175 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 December 31, 1998 13,142,207 15,156,864 General Partner (203,282) (182,932) ---------- - ---------- 12,938,925 14,973,932 ---------- - ---------- $15,966,100 $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 - ---------------------------- December 31, March 31, 1998 1998 (Unaudited) (Audited) ASSETS ----------- - --------- INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $28,223,602 $30,777,843 OTHER ASSETS Cash and cash equivalents 259,963 199,558 Investments 895,965 1,000,758 Notes receivable - - - Deferred acquisition costs net of accumulated amortization (Note B) 400,233 412,871 Organization costs, net of accumulated amortization (Note B) - - - Other assets 125,431 72,210 ---------- - ---------- $29,905,194 $32,463,240 ========== ========== LIABILITIES Accounts payable & accrued expenses (Note C) $ - $ - - Accounts payable affiliates 2,754,071 2,235,091 Capital contributions payable (Note D) 143,811 145,311 ---------- - ---------- 2,897,882 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 December 31, 1998 27,203,847 30,248,618 General Partner (196,535) (165,780) Unrealized gain (loss) on securities available for sale, net - - - ---------- - ---------- 27,007,312 30,082,838 ---------- - ---------- $29,905,194 $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 - ---------------------------- December 31, March 31, 1998 1998 (Unaudited) (Audited) ASSETS ----------- - --------- INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $25,255,894 $27,762,778 OTHER ASSETS Cash and cash equivalents 402,948 388,024 Investments - - - Notes receivable 1,332,152 1,409,982 Deferred acquisition costs net of accumulated amortization (Note B) 338,210 373,197 Organization costs, net of accumulated amortization (Note B) - 10,804 Other assets 1,314,763 1,121,814 ---------- - ---------- $28,643,967 $31,066,599 ========== ========== LIABILITIES Accounts payable & accrued expenses (Note C) $ 108,208 $ - - Accounts payable affiliates 2,668,701 2,159,306 Capital contributions payable (Note D) 1,367,195 1,367,195 ---------- - ---------- 4,144,104 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 December 31, 1998 24,684,543 27,694,376 General Partner (184,680) (154,278) ---------- - ---------- 24,499,863 27,540,098 ---------- - ---------- $28,643,967 $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 - ---------------------------- December 31, March 31, 1998 1998 (Unaudited) (Audited) ASSETS ------------ - ---------- INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $19,865,282 $20,921,603 OTHER ASSETS Cash and cash equivalents 474,883 301,444 Investments 130,531 474,000 Notes receivable - 536,351 Deferred acquisition costs, new of accumulated amortization (Note B) 272,009 280,569 Organization costs, net of accumulated amortization (Note B) - 18,772 Other assets 53,742 44,622 ---------- - ---------- $20,796,447 $22,577,361 ========== ========== LIABILITIES Accounts payable & accrued expenses (Note C) $ - $ - - Accounts payable affiliates 1,334,502 1,048,041 Capital contributions payable (Note D) 18,554 717,635 ---------- - ---------- 1,353,056 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 December 31, 1998 19,559,184 20,913,795 General Partner (115,793) (102,110) ---------- - ---------- 19,443,391 20,811,685 ---------- - ---------- $20,796,447 $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 - ---------------------------- December 31, March 31, 1998 1998 (Unaudited) (Audited) ASSETS ------------ - ---------- INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $23,149,400 $25,323,640 OTHER ASSETS Cash and cash equivalents 675,984 607,779 Investments 1,266,939 1,371,109 Notes receivables - - - Deferred acquisition costs, net of accumulated amortization (Note B) 346,038 356,965 Organization costs, net of accumulated amortization (Note B) 9,573 37,782 Other assets 46,901 16,568 ---------- - ---------- $25,494,835 $27,713,843 ========== ========== LIABILITIES Accounts payable & accrued expenses (Note C) $ 3,408 $ 3,408 Accounts payable affiliates 1,208,740 900,229 Capital contributions payable (Note D) 463,000 463,000 ---------- - ---------- 1,675,148 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 December 31, 1998 23,931,964 26,434,208 General Partner (112,277) (87,002) ---------- - ---------- 23,819,687 26,347,206 ---------- - ---------- $25,494,835 $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 $ 53,901 $ 40,369 ---------- ---------- Share of loss from Operating Partnerships (Note D) (2,889,612) (3,619,421) ---------- ---------- Expenses Professional fees 14,922 7,631 Fund management fee (Note C) 587,164 612,837 Amortization 37,796 55,405 General and administrative expenses 32,300 81,103 ---------- ---------- 672,182 756,976 ---------- ---------- NET LOSS $(3,507,893) $(4,336,028) ========== ========== Net loss allocated to limited partners $(3,472,814) $(4,292,668) ========== ========== Net loss allocated general partner $ (35,079) $ (43,360) ========== ========== Net loss per BAC $ (.76) $ (.97) ========== ========== 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 December 31, (Unaudited) SERIES 15 - ----------------------- 1998 1997 ---- - ---- Income Interest income $ 171,668 $ 168,032 -------- - -------- Share of loss from Operating Partnerships (614,979) (687,339) -------- - -------- Expenses Professional fees 10,966 1,293 Fund management fee (Note C) 121,266 132,377 Amortization 2,628 2,628 General and administrative expenses 5,483 14,934 -------- - -------- 140,343 151,232 -------- - -------- NET LOSS $(583,654) $(670,539) ======== ======== Net loss allocated to limited partners $(577,817) $(663,834) ======== ======== Net loss allocated to general partner $ (5,837) $ (6,705) ======== ======== Net loss per BAC $ (.15) $ (.17) ======== ======== 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 December 31, (Unaudited) SERIES 16 - ------------------------ 1998 1997 ---- - ---- Income Interest income $ (9,618) $ (16,438) -------- - - -------- Share of loss from Operating Partnerships (727,184) (828,356) -------- - - -------- Expenses Professional fees 632 2,080 Fund management fee (Note C) 170,151 155,976 Amortization 4,213 15,370 General and administrative expenses 9,444 20,270 -------- - - -------- 184,440 193,696 -------- - - -------- NET LOSS $(921,242) $(1,038,490) ======== ========== Net loss allocated to limited partners $(912,030) $(1,028,105) ======== ========== Net loss allocated to general partner $ (9,212) $ (10,385) ======== ========== Net loss per BAC $ (.16) $ (.19) ======== ========== 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 December 31, (Unaudited) SERIES 17 - ------------------------ 1998 1997 ------ - ------ Income Interest income $ (50,809) $ (50,304) ---------- -- - -------- Share of loss from Operating Partnerships (838,567) (900,456) ---------- -- - -------- Expenses Professional fees 2,444 1,627 Fund management fee (Note C) 126,864 137,942 Amortization 11,662 13,820 General and administrative expenses 6,345 15,832 ---------- -- - -------- 147,315 169,221 ---------- -- - -------- NET LOSS $(1,036,691) $(1,119,981) ========== ========== Net loss allocated to limited partners $(1,026,324) $(1,108,781) ========== ========== Net loss allocated to general partner $ (10,367) $ (11,200) ========== ========== Net loss per BAC $ (.21) $ (.22) ========== ========== The accompanying notes are an integral part of these statements. 10 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Three Months Ended December 31, (Unaudited) SERIES 18 - ---------------------- 1998 1997 ---- - ---- Income Interest income $ (38,108) $ (37,433) -------- - -------- Share of loss from Operating Partnerships - (635,372) -------- - -------- Expenses Professional fees 412 200 Fund management fee (Note C) 73,119 90,778 Amortization 6,248 10,542 General and administrative expenses 5,709 14,105 -------- - -------- 85,488 115,625 -------- - -------- NET LOSS $(123,596) $(788,430) ======== ======== Net loss allocated to limited partners $(122,360) $(780,546) ======== ======== Net loss allocated to general partner $ (1,236) $ (7,884) ======== ======== Net loss per BAC $ (.03) $ (.22) ======== ======== 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 December 31, (Unaudited) SERIES 19 - ---------------------- 1998 1997 ---- - ---- Income Interest income $ (19,232) $ (23,488) -------- - -------- Share of loss from Operating Partnerships (708,882) (567,898) -------- - -------- Expenses Professional fees 468 2,431 Fund management fee (Note C) 95,764 95,764 Amortization 13,045 13,045 General and administrative expenses 5,319 15,962 -------- - -------- 114,596 127,202 -------- - -------- NET LOSS $(842,710) $(718,588) ======== ======== Net loss allocated to limited partners $(834,283) $(711,402) ======== ======== Net loss allocated to general partner $ (8,427) $ (7,186) ======== ======== Net loss per BAC $ (.21) $ (.17) ======== ======== The accompanying notes are an integral part of these statements. 12 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Nine Months Ended December 31, (Unaudited) 1998 1997 ---- ---- Income Interest income $ 183,145 $ 132,299 ---------- ---------- Share of loss from Operating Partnerships (Note D) (10,020,693) (10,105,640) ---------- ---------- Expenses Professional fees 191,599 119,153 Fund management fee (Note C) 1,761,133 1,678,185 Amortization 132,781 166,215 General and administrative expenses 123,520 304,979 ---------- ---------- 2,209,033 2,268,532 ---------- ---------- NET LOSS $(12,046,581) $(12,241,873) ========== =========== Net loss allocated to limited , , partners $(11,926,115) $(12,119,454) ========== =========== Net loss allocated general partner $ (120,466) $ (122,419) ========== =========== Net loss per BAC $ (2,67) $ (2.77) ========== =========== The accompanying notes are an integral part of these statements. 13 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Nine Months Ended December 31, (Unaudited) SERIES 15 - ----------------------- 1998 1997 ---- - ---- Income Interest income $ 176,643 $ 170,256 ---------- -- - -------- Share of loss from Operating Partnerships (1,753,429) (2,098,823) ---------- -- - -------- Expenses Professional fees 57,272 51,002 Fund management fee (Note C) 369,967 368,360 Amortization 7,884 7,884 General and administrative expenses 23,098 37,970 ---------- -- - -------- 458,221 465,216 ---------- -- - -------- NET LOSS $(2,035,007) $(2,393,783) ========== ========== Net loss allocated to limited partners $(2,014,657) $(2,369,845) ========== ========== Net loss allocated to general partner $ (20,350) $ (23,938) ========== ========== Net loss per BAC $ (.52) $ (.61) ========== ========== The accompanying notes are an integral part of these statements. 14 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Nine Months Ended December 31, (Unaudited) SERIES 16 - ------------------------ 1998 1997 ---- - ---- Income Interest income $ 36,435 $ 8,109 --------- - - -------- Share of loss from Operating Partnerships (2,553,171) (2,389,351) ---------- -- - -------- Expenses Professional fees 44,670 775 Fund management fee (Note C) 468,845 477,807 Amortization 12,638 46,110 General and administrative expenses 32,637 112,206 ---------- -- - -------- 558,790 636,898 ---------- -- - -------- NET LOSS $(3,075,526) $(3,018,140) ========== ========== Net loss allocated to limited partners $(3,044,771) $(2,987,959) ========== ========== Net loss allocated to general partner $ (30,755) $ (30,181) ========== ========== Net loss per BAC $ (.56) $ (.55) ========== ========== The accompanying notes are an integral part of these statements. 15 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Nine Months Ended December 31, (Unaudited) SERIES 17 - ------------------------ 1998 1997 ---- - ---- Income Interest income $ (47,254) $ (42,551) ---------- -- - -------- Share of loss from Operating Partnerships (2,499,080) (2,143,853) ---------- - ---------- Expenses Professional fees 38,153 36,593 Fund management fee (Note C) 383,373 394,766 Amortization 45,791 41,459 General and administrative expenses 26,584 43,180 ---------- - ---------- 493,901 515,998 ---------- - ---------- NET LOSS $(3,040,235) $(2,702,402) ========== ========== Net loss allocated to limited partners $(3,009,833) $(2,675,378) ========== ========== Net loss allocated to general partner $ (30,402) $ (27,024) ========== ========== Net loss per BAC $ (.60) $ (.54) ========== ========== The accompanying notes are an integral part of these statements. 16 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Nine Months Ended December 31, (Unaudited) SERIES 18 - ---------------------- 1998 1997 ---- - ---- Income Interest income $ (12,574) $ (21,880) ---------- -- - -------- Share of loss from Operating Partnerships (1,040,838) (1,770,508) ---------- -- - -------- Expenses Professional fees 26,761 677 Fund management fee (Note C) 242,260 264,345 Amortization 27,332 31,626 General and administrative expenses 18,529 65,099 ---------- -- - -------- 314,882 361,747 ---------- -- - -------- NET LOSS $(1,368,294) $(2,154,135) ========== ========== Net loss allocated to limited partners $(1,354,611) $(2,132,594) ========== ========== Net loss allocated to general partner $ (13,683) $ (21,541) ========== ========== Net loss per BAC $ (.37) $ (.59) ========== ========== The accompanying notes are an integral part of these statements. 17 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Nine Months Ended December 31, (Unaudited) SERIES 19 - ---------------------- 1998 1997 ---- - ---- Income Interest income $ 29,895 $ 18,365 ---------- -- - -------- Share of loss from Operating Partnerships (2,174,175) (1,703,105) ---------- -- - -------- Expenses Professional fees 24,743 30,106 Fund management fee (Note C) 296,688 172,907 Amortization 39,136 39,136 General and administrative expenses 22,672 46,524 ---------- -- - -------- 383,239 288,673 ---------- -- - -------- NET LOSS $(2,527,519) $(1,973,413) ========== ========== Net loss allocated to limited partners $(2,502,244) $(1,953,679) ========== ========== Net loss allocated to general partner $ (25,275) $ (19,734) ========== ========== Net loss per BAC $ (.62) $ (.48) ========== ========== 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 Nine Months Ended December 31, 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) (11,926,115) (120,466) - (12,046,581) ----------- -------- --------- - ----------- Partners' capital (deficit), December 31, 1998 $108,521,746 $(812,568) $ - $107,709,178 =========== ======== ========= =========== 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 Nine Months Ended December 31, 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) (2,014,657) (20,350) - (2,035,007) ---------- -------- ---------- - ---------- Partners' capital (deficit), December 31, 1998 $13,142,207 $ (203,282) $ - $12,938,925 ========== ======== ========== ========== 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) (3,044,771) (30,755) - (3,075,526) ---------- -------- --------- - ---------- Partners' capital (deficit), December 31, 1998 $27,203,847 $ (196,535) $ - $27,007,312 ========== ======== ========= ========== 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 Nine Months Ended December 31, 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) (3,009,833) (30,402) - (3,040,235) ---------- -------- --------- - ---------- Partners' capital (deficit), December 31, 1998 $24,684,543 $(184,680) $ - $24,499,863 ========== ======== ========= ========== 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) (1,354,611) (13,683) - (1,368,294) ---------- ------- --------- - ---------- Partners' capital (deficit), December 31, 1998 $19,559,184 $(115,793) $ - $19,443,391 ========== ======= ========= ========== 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 Nine Months Ended December 31, 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) (2,502,244) (25,275) - (2,527,519) ---------- -------- ---------- - ---------- Partners' capital (deficit), December 31, 1998 $23,931,964 $(112,277) $ - $(23,819,687) ========== ======== ========== ========== The accompanying notes are an integral part of these statements. 22 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Nine Months Ended December 31, (Unaudited) 1998 1997 ---- - ---- Cash flows from operating activities: Net loss $(12,046,581) $(12,241,874) Adjustments Distributions from Operating Partnerships 17,273 - - Amortization 97,794 166,215 Share of loss from Operating Partnerships 10,020,693 10,105,640 Changes in assets and liabilities (Decrease) Increase in accounts payable and accrued expenses 108,208 (128) Decrease (Increase) in accounts receivable (527,502) 173,329 Decrease (Increase) in accounts payable affiliates 2,255,716 1,949,005 ---------- - ---------- Net cash (used in) provided by operating activities (74,399) 152,187 ---------- - ---------- Cash flows from investing activities: Acquisition costs repaid (paid) for Operating Partnerships acquired or to acquire 34,987 - - Capital contributions paid to Operating Partnerships (692,564) (507,083) Advances to Operating Partnerships 692,011 - - Investments 549,404 10,511 ---------- - - --------- Net cash (used in) provided by investing activities 583,838 (496,572) ---------- - ---------- 23 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Nine Months Ended December 31, (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 509,439 (344,385) ---------- - ---------- Cash and cash equivalents, beginning 1,653,522 3,925,707 ---------- - ---------- Cash and cash equivalents, ending $ 2,162,961 $ 3,581,322 ========== ========== 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 Nine Months Ended December 31, (Unaudited) Series 15 - ------------------------- 1998 1997 ---- - ---- Cash flows from operating activities: Net loss $(2,035,007) $(2,393,783) Adjustments Distributions from Operating Partnerships 874 3,017 Amortization 7,884 7,884 Share of loss from Operating Partnerships 1,753,429 2,098,823 Changes in assets and liabilities (Decrease) increase in accounts payable and accrued expenses - 2 Decrease (Increase) in accounts receivable (241,878) - - Decrease (Increase) in accounts payable affiliates 632,362 411,038 -------- - - -------- Net cash (used in) provided by operating activities 117,664 126,981 -------- - - -------- 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 77,830 25,000 Investments (3,028) - - -------- - - -------- Net cash (used in) provided by investing activities 74,802 (120,068) -------- - - -------- 25 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Nine Months Ended December 31, (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 192,466 6,913 Cash and cash equivalents, beginning 156,717 246,845 -------- - -------- Cash and cash equivalents, ending $ 349,183 $ 253,758 ======== ======== Supplemental schedule of noncash investing and financing activities The Fund has increased its investments for unpaid capital contributions due to the Operating Partnerships $ - $ - - ======== ========= The accompanying notes are an integral part of these statements. 26 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Nine Months Ended December 31, (Unaudited) Series 16 - ------------------------- 1998 1997 ---- - ---- Cash flows from operating activities: Net loss $(3,075,526) $(3,018,140) Adjustments Distributions from Operating Partnerships 1,064 3,098 Amortization 12,638 46,110 Share of loss from Operating Partnerships 2,553,171 2,389,351 Changes in assets and liabilities (Decrease) increase in accounts payable and accrued expenses - - - Decrease (Increase) in accounts receivable (53,221) (28,189) Decrease (Increase) in accounts payable affiliates 518,986 518,985 ---------- - ---------- Net cash (used in) provided by operating activities (42,888) (88,785) ---------- - ---------- Cash flows from investing activities: Acquisition costs repaid (paid) for Operating Partnerships acquired or to acquire - - - Capital contributions paid to Operating Partnerships (1,500) - - Advances to Operating Partnerships - (9,914) Investments 104,793 3,052 ---------- - ---------- Net cash (used in) provided by investing activities 103,293 (6,862) ---------- - ---------- 27 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Nine Months Ended December 31, (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 60,405 (95,647) Cash and cash equivalents, beginning 199,558 1,183,424 ---------- - ---------- Cash and cash equivalents, ending $ 259,963 $ 1,087,777 ========== ========== 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 Nine Months Ended December 31, (Unaudited) Series 17 - ------------------------- 1998 1997 ---- - ---- Cash flows from operating activities: Net loss $(3,040,235) $(2,702,402) Adjustments Distributions from Operating Partnerships 7,804 9,087 Amortization 10,804 41,459 Share of loss from Operating Partnerships 2,499,080 2,143,853 Changes in assets and liabilities (Decrease) increase in accounts payable and accrued expenses 108,208 - - Decrease (Increase) in accounts receivable (192,949) 206,079 Decrease (Increase) in accounts payable affiliates 509,395 424,031 ---------- - ---------- Net cash (used in) provided by operating activities (97,893) 122,107 ---------- - ---------- Cash flows from investing activities: Acquisition costs repaid (paid) for Operating Partnerships acquired or to acquire 34,987 - - Capital contributions paid to Operating Partnerships - (213,893) Advances to Operating Partnerships 77,830 - - Investments - - - ---------- - ---------- Net cash (used in) provided by investing activates 112,817 (213,893) ---------- - ---------- 29 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Nine Months Ended December 31, (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 14,924 (91,786) Cash and cash equivalents, beginning 388,024 539,185 ---------- - ---------- Cash and cash equivalents, ending $ 402,948 $ 447,399 ========== ========== 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 Nine Months Ended December 31, (Unaudited) Series 18 - ------------------------- 1998 1997 ---- - ---- Cash flows from operating activities: Net loss $(1,368,294) $(2,154,135) Adjustments Distributions from Operating Partnerships 7,466 2,469 Amortization 27,332 31,626 Share of loss from Operating Partnerships 1,040,838 1,770,508 Changes in assets and liabilities (Decrease) increase in accounts payable and accrued expenses - (129) Decrease (Increase) in accounts receivable (9,121) 1,191 Decrease (Increase) in accounts payable affiliates 286,462 286,440 ---------- - ---------- Net cash (used in) provided by operating activities (15,317) (62,030) ---------- - ---------- Cash flows from investing activities: Acquisition costs repaid (paid) for Operating Partnerships acquired or to acquire - - - Capital contributions paid to Operating Partnerships (691,064) (38,321) Advances to Operating Partnerships 536,351) - - Investments 343,469 1,838 ---------- - ---------- Net cash (used in) provided by investing activities 188,756 (36,483) ---------- - ---------- 31 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Nine Months Ended December 31, (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 173,439 (98,513) Cash and cash equivalents, beginning 301,444 766,409 --------- - ---------- Cash and cash equivalents, ending $ 474,883 $ 667,896 ========= ========== 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 Nine Months Ended December 31, (Unaudited) Series 19 - ------------------------- 1998 1997 ---- - ---- Cash flows from operating activities: Net loss $(2,527,519) $(1,973,413) Adjustments Distributions from Operating Partnerships 65 5,065 Amortization 39,136 39,136 Share of loss from Operating Partnerships 2,174,175 1,703,105 Changes in assets and liabilities (Decrease) increase in accounts payable and accrued expenses - (1) Decrease (Increase) in accounts Receivable/ other assets (30,333) (5,752) Decrease (Increase) in accounts payable affiliates 308,511 308,511 ---------- - ---------- Net cash (used in) provided by operating activities (35,965) 76,651 ---------- - ---------- 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 104,170 5,621 ---------- - ---------- Net cash (used in) provided by investing activities 104,170 (142,002) ---------- - - --------- 33 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Nine Months Ended December 31, (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 68,205 (65,351) Cash and cash equivalents, beginning 607,779 1,189,843 ---------- - ---------- Cash and cash equivalents, ending $ 675,984 $ 1,124,492 ========== ========== 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 December 31, 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 December 31, 1998 (Unaudited) NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES The condensed financial statements included herein as of December 31, 1998 and for the three and nine months then ended have been prepared by the Fund, without audit. The Fund accounts for its investments in Operating Partnerships using the equity method, whereby the Fund adjusts its investment cost for its share of each Operating Partnership's results of operations and for any distributions received or accrued. Costs incurred by the Fund in acquiring the investments in the Operating Partnerships are capitalized to the investment account. The Fund's accounting and financial reporting policies are in conformity with generally accepted accounting principles and include adjustments in interim periods considered necessary for a fair presentation of the results of operations. Such adjustments are of a normal recurring nature. Investment Securities - --------------------- The Fund has determined that all of it's investment securities are to be categorized as securities available for sale. Securities classified as available for sale are those debt securities that the Fund purchased that may be liquidated prior to the maturity date should the need arise. These securities are carried at approximate fair market value. The amortized cost of securities available for sale as of December 31, 1998 by contractual maturity are as follows: Amortized Cost ----------- Due in one year or less $2,421,463 Due after one year - --------- Total $2,421,463 ========= The fair market value of the securities is $2,421,463. 36 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED December 31, 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 December 31, 1998 and 1997 the Fund has accumulated organization amortization totaling $924,855 and $826,967 respectively. The breakdown of accumulated organization amortization within the Fund as of December 31, 1998 and 1997 is as follows: 1998 1997 ---- ---- Series 15 $167,077 $167,077 Series 16 227,909 216,752 Series 17 205,888 186,881 Series 18 150,296 123,835 Series 19 173,685 132,422 ------- ------- $924,855 $826,967 ======= ======= On July 1, 1995, the Fund began amortizing unallocated acquisition costs over 330 months from April 1, 1995. As of December 31, 1998 the Fund has accumulated unallocated acquisition amortization totaling $262,197. The breakdown of accumulated unallocated acquisition amortization within the fund as of December 31, 1998 for Series 15, Series 16, Series 17, Series 18, and Series 19 is $39,518, $63,195, $42,930, $89,540 and $52,011, 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 December 31, 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 December 31, 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 December 31, 1998 and 1997 are as follows: 1998 1997 ---- ---- Series 15 $137,013 $137,013 Series 16 172,995 172,995 Series 17 141,342 141,347 Series 18 95,487 95,487 Series 19 102,837 102,837 ------- ------- $649,674 $649,679 ======= ======= NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS At December 31, 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 December 31, 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 December 31, 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 December 31, 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 1,619,079 Series 18 18,554 717,634 Series 19 463,000 684,180 --------- ---------- $2,025,482 $ 3,200,732 ========= ========== 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 nine months ended September 30, 1998. 39 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED December 31, 1998 (Unaudited) NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued) COMBINED SUMMARIZED STATEMENTS OF OPERATIONS Nine months ended September 30, (Unaudited) Series 15 - --------------------------- 1998 1997 ---- ---- Revenues Rental $ 7,129,846 $ 7,057,435 Interest and other 360,905 354,959 --------- - --------- 7,490,751 7,412,394 --------- - --------- Expenses Interest 2,125,796 2,304,960 Depreciation and amortization 2,815,661 3,008,366 Operating expenses 4,562,959 4,342,971 --------- - --------- 9,504,416 9,656,297 --------- - --------- NET LOSS $(2,013,665) $(2,243,903) ========= ========= Net loss allocated to Boston Capital Tax Credit Fund III L.P. $(1,753,429) $(2,098,823) ========= ========= Net loss allocated to other partners $ (20,137) $ (22,439) ========= ========= Net loss suspended $ (240,099) $ (122,641) ========= ========= 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 December 31, 1998 (Unaudited) NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued) COMBINED SUMMARIZED STATEMENTS OF OPERATIONS Nine months ended September 30, (Unaudited) Series 16 - -------------------------- 1998 1997 ---- ---- Revenues Rental $ 9,194,077 $ 9,194,168 Interest and other 713,264 690,191 ---------- - ---------- 9,907,341 9,884,359 ---------- - ---------- Expenses Interest 3,153,195 3,141,090 Depreciation and amortization 3,396,748 3,448,529 Operating expenses 5,982,373 5,708,225 ---------- - ---------- 12,532,316 12,297,844 ---------- - ---------- NET LOSS $(2,624,975) $(2,413,485) ========== ========== Net loss allocated to Boston Capital Tax Credit Fund III L.P. $(2,553,171) $(2,389,351) ========== ========== Net loss allocated to other partners $ (26,250) $ (24,134) ========== ========== Net loss suspended $ (45,554) $ - - ========== ========== 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 December 31, 1998 (Unaudited) NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued) COMBINED SUMMARIZED STATEMENTS OF OPERATIONS Nine Months ended September 30, (Unaudited) Series 17 - -------------------------- 1998 1997 Revenues ---- ---- Rental $ 8,198,413 $ 8,838,373 Interest and other 423,235 408,674 ---------- - --------- 8,621,648 9,247,047 ---------- - --------- Expenses Interest 3,046,408 3,440,939 Depreciation and amortization 3,203,030 2,978,359 Operating expenses 4,896,534 4,993,255 ---------- - --------- 11,145,972 11,412,553 ---------- - --------- NET LOSS $(2,524,324) $(2,165,506) ========== ========= Net loss allocated to Boston Capital Tax Credit Fund III L.P. $(2,499,080) $(2,143,853) ========== ========= Net loss allocated to other partners $ (25,244) $ (21,653) ========== ========= 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 December 31, 1998 (Unaudited) NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued) COMBINED SUMMARIZED STATEMENTS OF OPERATIONS Nine months ended September 30, (Unaudited) Series 18 - ---------------------------- 1998 1997 Revenues ---- ---- Rental $ 4,598,802 $4,534,379 Interest and other 175,593 215,890 --------- - --------- 4,774,395 4,750,269 --------- - --------- Expenses Interest 1,661,453 1,683,869 Depreciation and amortization 2,058,573 2,123,294 Operating expenses 2,679,420 2,731,498 --------- - --------- 6,399,446 6,538,661 --------- - --------- NET LOSS $(1,625,051) $(1,788,392) ========= ========= Net loss allocated to Boston Capital Tax Credit Fund III L.P. $(1,563,941) $(1,770,508) ========= ========= Net loss allocated to other partners $ (16,251) $ (17,884) ========= ========= Net loss suspended $ (44,859) $ - - ========= ========= 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 December 31, 1998 (Unaudited) NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued) COMBINED SUMMARIZED STATEMENTS OF OPERATIONS Nine months ended September 30, (Unaudited) Series 19 - -------------------------- 1998 1997 Revenues ---- ---- Rental $ 6,674,217 $ 6,450,265 Interest and other 235,939 223,451 --------- - --------- 6,910,156 6,673,716 --------- - --------- Expenses Interest 2,632,402 2,702,277 Depreciation and amortization 2,937,007 2,208,069 Operating expenses 3,536,883 3,483,678 --------- - --------- 9,106,292 8,394,024 --------- - --------- NET LOSS $(2,196,137) $(1,720,308) ========= ========= Net loss allocated to Boston Capital Tax Credit Fund III L.P. $(2,174,175) $(1,703,105) ========= ========= Net loss allocated to other partners $ (21,962) $ (17,203) ========= ========= 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 December 31, 1998 (Unaudited) NOTE D - INVESTMENT IN OPERATING PARTNERSHIPS-CONTINUED When comparing the results of operations from the operating partnerships for the nine months ended September 30, 1998 and September 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 year ended December 31, 1998 is expected to differ from its loss for financial reporting purposes for the year end March 31, 1999. 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 December 31, 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 December 31, 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 December 31, 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 December 31, 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 December 31, 1998, none of Series 17 net offering proceeds had been used to pay capital contributions. Series 17 net offering proceeds in the amount of $402,948 remain to be used by the Fund to pay remaining capital contributions to the Operating Partnerships that Series 17 has invested in as of December 31, 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 December 31, 1998, 536,350 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 December 31, 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 December 31, 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 December 31, 1998. Results of Operations - --------------------- As of December 31, 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 December 31, 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 December 31, 1998 for Series 15, Series 16, Series 17, Series 18 and Series 19 were $121,266, $170,151, $126,864, $73,119, and $95,764 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 December 31, 1998 and 1997, the average qualified occupancy for the series was 100% and 99.9%, respectively. The series had a total of 68 properties at December 31, 1998, 68 of which were at 100% qualified occupancy. For the nine months being reported Series 15 reflects a net loss from Operating Partnerships of $2,013,665. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $801,996. 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 December 31, 1998 was 95%. The property had previously suffered operational difficulties due to more expensive debt and high expenses. 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) continues to incur operating deficits due to high operating expenses. The Operating General Partner is funding the capital improvement plan established by the new management company. Average occupancy at the property remains at 95%. At this time, the Operating General Partner is working with the management company to develop the 1999 budget and capital improvement plan. In addition, the Operating General Partner has begun to approach several local lenders regarding refinancing the property's permanent loan. 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 third management company was hired in October 1998. Occupancy was at approximately 81% in December 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. The interest rate was reduced to 7.25% and this rate became effective on January 1, 1999. (Series 16) As of December 31, 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 December 31, 1998. Out of the total, 61 had 100% qualified occupancy. For the nine months being reported Series 16 reflects a net loss from Operating Partnerships of $2,624,975. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $771,773. 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 49 vacancies. The Operating General Partner will be monitoring the situation with the management company. To further reduce costs the Operating General Partner is negotiating with the lender to restructure the property's debt. Debt restructure would include a new second mortgage to fund capital needs, any debt restructure will require the Investment Limited Partner's approval. Occupancy has slipped from 100% to 93% during 1998. (Series 17) As of December 31, 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 December 31, 1998. Out of the total 48 had 100% qualified occupancy. For the nine months being reported Series 17 reflects a net loss from Operating Partnerships of $2,524,324. When adjusted for depreciation, which, is a non-cash item, the Operating Partnerships reflect positive operations of $678,706. 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. Although occupancy has stabilized, economic factors relevant to the marketplace prevent the necessary rental income to be generated to cover the operational expenses. The rental rates at the property were increased during the last quarter of 1998. In a step to cut costs even further the Operating General Partner has initiated loan restructure discussions with the first lender for more favorable terms. The Investment General Partner continues to monitor this situation closely. Occupancy is at 92% as of December 31, 1998. The physical occupancy of California Investors VII Limited Partnership (Summit Ridge Apartments/Longhorn Pavillion) as of December 31, 1998 was 95%. The property had previously suffered operational difficulties due to more expensive debt and high expenses. 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 December 31, 1998 was at 88%. 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, has developed a new marketing campaign, which was implemented during the last quarter of 1998. 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 enhance the appeal of Orchard Park Apartments to families. 50 (Series 18) As of December 31, 1998 and 1997 the average qualified occupancy for the series was 100%, for both years. The series had a total of 34 properties at December 31, 1998, out of the total all had 100% qualified occupancy. For the nine months being reported Series 18 reflects a net loss from Operating Partnerships of $1,625,051. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $433,522. 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 delivery of these documents and will remove any uncertainty as to the Operating Partnership's possession of the land. Additionally, occupancy started to drop in the fourth quarter of 1998, with a year-end physical occupancy of 78%. At this time, the Investment General Partner is working with the Operating General Partner to select a new management company. (Series 19) As of December 31, 1998 and 1997 the average qualified occupancy for the series was 99.8%, and 99.9%, respectively. The series had a total of 26 properties at December 31, 1998, 25 of which were at 100% qualified occupancy. For the nine months being reported Series 19 reflects a net loss from Operating Partnerships of $2,196,137. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $740,870. This is an interim period estimate; it is not necessarily indicative of the final year end results. Year 2000 - --------- As previously stated in the Fund's 10-K, Boston Capital and its management have reviewed the potential computer problems that may arise from the century date change known as "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 have contacted the vendors to provide us with the necessary upgrades and replacements. Boston Capital is committed to ensuring that the "Y2K" issue will have no impact on our investors. 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: February 18, 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 9-MOS MAR-31-1999 APR-01-1998 DEC-31-1998 120806543 0 0 0 0 120806543 183145 0 (12229726) 0 0 0 (12046581) 0 0
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