1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PERSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 2000
or
( ) TRANSITION REPORT PERSUANT 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 (I.R.S. Employer
of incorporation or Identification No.)
organization)
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 preceeding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No _
BOSTON CAPITAL TAX CREDIT FUND III L.P.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED June 30, 2000
TABLE OF CONTENTS
FOR THE QUARTER ENDED JUNE 30, 2000 2
BALANCE SHEETS 4
SERIES 15 5
SERIES 16 6
SERIES 17 7
SERIES 18 8
SERIES 19 9
STATEMENTS OF OPERATIONS 10
THREE MONTHS ENDED JUNE 30, 10
SERIES 15 11
SERIES 16 12
SERIES 17 13
SERIES 18 14
SERIES 19 15
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL 16
SERIES 15 17
SERIES 16 17
SERIES 17 18
SERIES 18 18
SERIES 19 19
STATEMENTS OF CASH FLOWS 20
THREE MONTHS ENDED JUNE 30, 20
SERIES 15 222
SERIES 16 24
SERIES 17 26
SERIES 18 28
SERIES 19 300
NOTES TO FINANCIAL STATEMENTS 322
NOTE A - ORGANIZATION 322
NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES 333
INVESTMENT SECURITIES 333
COST ERROR! BOOKMARK NOT DEFINED.
NOTE C - RELATED PARTY TRANSACTIONS 34
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS 35
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS 37
SERIES 15 37
SERIES 16 38
SERIES 17 39
SERIES 18 40
SERIES 19 411
LIQUIDITY 433
CAPITAL RESOURCES 433
RESULTS OF OPERATIONS 44
YEAR 2000 COMPLIANCE 48
PART II - OTHER INFORMATION 49
SIGNATURES 50
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
June 30, March 31,
2000 2000
(Unaudited) (Audited)
ASSETS
INVESTMENTS IN OPERATING $ 93,867,056 $ 96,374,955
PARTNERSHIPS (Note D)
OTHER ASSETS
Cash and cash equivalents 1,873,383 1,754,063
Investments 1,540,719 1,538,967
Notes receivable 1,309,982 1,364,322
Deferred acquisition costs, net
of accumulated amortization (Note
B)
1,526,124 1,543,349
Other assets 2,997,561 2,940,636
$103,114,825 $105,516,292
LIABILITIES
Accounts payable & accrued
expenses
(Note C) $ 4,551 $ 4,553
Accounts payable affiliates
14,056,479 13,374,147
Capital contributions payable
1,432,250 1,432,250
15,493,280 14,810,950
PARTNERS' CAPITAL
Limited Partners
Units of limited partnership
interest, $10 stated value per
BAC;
22,000,000 authorized BACs;
21,996,102 issued and 91,687,950
outstanding, 88,634,992
as of March 31, 2000
General Partner (1,013,447) (982,608)
87,621,545 90,705,342
$103,114,825 $105,516,292
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
Series 15
June 30, March 31,
2000 2000
(Unaudited) (Audited)
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS(Note D)
$11,838,213 $12,293,726
OTHER ASSETS
Cash and cash equivalents
357,939 308,497
Investments 135,167 135,167
Notes receivable - 32,170
Deferred acquisition costs,
net of accumulated
amortization
(Note B) 233,884 236,512
Other assets 860,340 858,625
$13,425,543 $13,864,697
LIABILITIES
Accounts payable & accrued
expenses
(Note C) $ 1,144 $ 1,145
Accounts payable affiliates
3,871,426 3,734,413
Capital contributions payable
32,922 32,922
3,905,492 3,768,480
PARTNERS' CAPITAL
Limited Partners
Units of limited partnership
interest, $10 stated value per
BAC; 22,000,000 authorized
BACs;
3,870,500 issued and 9,757,522 10,327,926
outstanding,
as of March 31, 2000
General Partner (237,471) (231,709)
9,520,051 10,096,217
$13,425,543 $13,864,697
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
Series 16
June 30, March 31,
2000 2000
(Unaudited) (Audited)
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D)
$23,113,328 $23,933,776
OTHER ASSETS
Cash and cash equivalents
316,164 307,415
Investments 654,460 652,708
Notes receivable - -
Deferred acquisition costs,
net of accumulated
amortization
(Note B) 374,958 379,171
Other assets 137,589 130,891
$24,596,499 $25,403,961
LIABILITIES
Accounts payable & accrued
expenses
(Note C) $ - $ -
Accounts payable affiliates
3,292,041 3,119,046
Capital contributions payable
140,006 140,006
3,432,047 3,259,052
PARTNERS' CAPITAL
Limited Partners
Units of limited
partnership
Interest, $10 stated value per
BAC; 22,000,000 authorized
BACs; 21,419,417 22,390,069
5,429,402 issued and
outstanding,
as of March 31, 2000
General Partner (254,965) (245,160)
21,164,452 22,144,909
$24,596,499 $25,403,961
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
Series 17
June 30, March 31,
2000 2000
(Unaudited) (Audited)
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (Note D)
$21,186,829 $21,661,017
OTHER ASSETS
Cash and cash equivalents
436,868 404,005
Investments - -
Notes receivable 1,309,982 1,332,152
Deferred acquisition costs,
net of accumulated
amortization
(Note B) 338,210 342,098
Other assets 1,917,069 1,874,478
$25,188,958 $25,613,750
LIABILITIES
Accounts payable & accrued
expenses
(Note C) $ - $ -
Accounts payable affiliates
4,159,826 3,985,826
Capital contributions payable
1,206,768 1,206,768
5,366,594 5,192,594
PARTNERS' CAPITAL
Limited Partners
Units of limited
partnership
Interest, $10 stated value per
BAC; 22,000,000 authorized
BACs; 20,053,820 20,646,624
5,000,000 issued and
outstanding,
as of March 31, 2000
General Partner (231,456) (225,468)
19,822,364 20,421,156
$25,188,958 $25,613,750
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
Series 18
June 30, March 31,
2000 2000
(Unaudited) (Audited)
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (NOTE D)
$ 16,227,140 $ 16,650,144
OTHER ASSETS
Cash and cash equivalents
408,447 377,094
Investments 102,771 102,771
Notes receivable - -
Deferred acquisition costs, net
of
accumulated amortization(Note
B) 254,889 257,743
Other assets 63,286 62,002
$17,056,533 $17,449,754
LIABILITIES
Accounts payable & accrued
expenses
(Note C) $ - $ -
Accounts payable affiliates
1,757,424 1,661,937
Capital contributions payable
18,554 18,554
1,775,978 1,680,491
PARTNERS' CAPITAL
Limited Partners
Units of limited
partnership
Interest, $10 stated value per
BAC; 22,000,000 authorized
BACs; 15,437,977 15,921,798
3,616,200 issued and
outstanding,
as of March 31, 2000
General Partner (157,422) (152,535)
15,280,555 15,769,263
$17,056,533 $17,449,754
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
BALANCE SHEETS
Series 19
June 30, March 31,
2000 2000
(Unaudited) (Audited)
ASSETS
INVESTMENTS IN OPERATING
PARTNERSHIPS (NOTE D)
$21,501,546 $ 21,836,292
OTHER ASSETS
Cash and cash equivalents
353,965 357,052
Investments 648,321 648,321
Notes receivable - -
Deferred acquisition costs,
net of accumulated
amortization
(Note B) 324,183 327,825
Other assets 19,277 14,640
$22,847,292 $23,184,130
LIABILITIES
Accounts payable & accrued
expenses
(Note C) $ 3,407 $ 3,408
Accounts payable affiliates
975,762 872,925
Capital contributions payable
34,000 34,000
1,013,169 910,333
PARTNERS' CAPITAL
Limited Partners
Units of limited
partnership
Interest, $10 stated value per
BAC; 22,000,000 authorized
BACs; 21,966,256 22,401,533
4,080,000 issued and
outstanding,
as of March 31, 2000
General Partner (132,133) (127,736)
21,834,123 22,273,797
$22,847,292 $23,184,130
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
2000 1999
Income
Interest income $ 28,179 $ 59,471
Other income 998 300
29,177 59,771
Share of loss from Operating
Partnerships(Note D) (2,489,704) (2,714,397)
Expenses
Professional fees 13,372 52,887
Fund management fee (Note C) 547,815 595,028
Amortization 17,225 25,169
General and administrative 44,858 52,310
expenses
623,270 725,394
NET LOSS $(3,083,797) $(3,380,020)
Net loss allocated to limited $(3,052,958) $(3,346,220)
partners
Net loss allocated general partner $ (30,839) $ (33,800)
Net loss per BAC $ (.69) $ (.74)
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 15
2000 1999
Income
Interest income $ 4,294 $ 13,494
Other income 9 -
4,303 13,494
Share of loss from Operating
Partnerships(Note D) (455,506) (512,749)
Expenses
Professional fees 3,230 14,598
Fund management fee 110,891 119,516
Amortization 2,628 2,628
General and administrative 8,214 10,612
expenses
124,963 147,354
NET LOSS $ (576,166) $ (646,609)
Net loss allocated to limited $ (570,404) $ (640,143)
partners
Net loss allocated general partner $ (5,762) $ (6,466)
Net loss per BAC $ (.15) $ (.16)
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 16
2000 1999
Income
Interest income $ 10,425 $ 12,322
Other income 436 150
12,472
10,861
Share of loss from Operating
Partnerships(Note D) (819,165) (829,749)
Expenses
Professional fees 4,283 12,260
Fund management fee 152,430 152,827
Amortization 4,213 4,213
General and administrative 11,227 13,037
expenses
172,153 182,337
NET LOSS $ (980,457) $ 999,614)
Net loss allocated to limited $ (970,652) $ (989,618)
partners
Net loss allocated general partner $ (9,805) $ (9,996)
Net loss per BAC $ (.18) $ (.18)
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 17
2000 1999
Income
Interest income $ 2,998 $ 4,617
Other income 553 150
3,551 4,767
Share of loss from Operating
Partnerships(Note D) (473,016) (605,664)
Expenses
Professional fees 2,446 10,811
Fund management fee 112,419 132,841
Amortization 3,888 11,662
General and administrative 10,574 12,437
expenses
129,327 167,751
NET LOSS $ (598,792) $ (768,648)
Net loss allocated to limited $ (592,804) $ (760,961)
partners
Net loss allocated general partner $ (5,988) $ (7,687)
Net loss per BAC $ (.12) $ (.15)
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 18
2000 1999
Income
Interest Income $ 3,310 $ 4,481
-
-
3,310 4,481
Share of loss from Operating
Partnerships(Note D) (407,350) (340,799)
Expenses
Professional fees 1,916 9,123
Fund management fee 72,916 90,457
Amortization 2,854 2,853
General and administrative 6,982 7,788
expenses
84,668 110,221
NET LOSS $ (488,708) $ (446,539)
Net loss allocated to limited $ (483,821) $ (442,074)
partners
Net loss allocated general partner $ (4,887) $ (4,465)
Net loss per BAC $ (.14) $ (.12)
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF OPERATIONS
Three Months Ended June 30,
(Unaudited)
Series 19
2000 1999
Income
Interest income $ 7,152 $ 24,557
Other income - -
7,152 24,557
Share of loss from Operating
Partnerships(Note D) (334,667) (425,436)
Expenses
Professional fees 1,497 6,095
Fund management fee 99,159 99,387
Amortization 3,642 3,813
General and administrative 7,861 8,436
expenses
112,159 117,731
NET LOSS $ (439,674) $ (518,610)
Net loss allocated to limited $ (435,277) $ (513,424)
partners
Net loss allocated general partner $ (4,397) $ (5,186)
Net loss per BAC $ (.11) $ (.13)
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30,
(Unaudited)
General
Partner
Assignees Total
Partners' Capital
(deficit)
April 1, 2000 $ $ $ 90,705,342
91,687,950 (982,608)
Net income (loss) (3,052,958) (30,839) (3,083,797)
Partners' capital
(deficit),
June 30, 2000 $ $ $ 87,621,545
88,634,992 (1,013,447)
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30,
(Unaudited)
Assignees General Total
Partner
Series 15
Partners' Capital
(deficit)
April 1, 2000 $ $ (231,709) $ 10,096,217
10,327,926
Net income (loss) (570,404) (5,762) (576,166)
Partners' capital
(deficit),
June 30, 2000 $ $ (237,471) $ 9,520,051
9,757,522
Series 16
Partners' Capital
(deficit)
April 1, 2000 $ $ (245,160) $ 22,144,909
22,390,069
Net income (loss) (970,652) (9,805) (980,457)
Partners' capital
(deficit),
June 30, 2000 $ $ (254,965) $ 21,164,152
21,419,417
The accompanying notes are an integral part of these statements.
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30,
(Unaudited)
Assignees General Total
Partner
Series 17
Partners' Capital
(deficit)
April 1, 2000 $ $ $ 20,421,156
20,646,624 (225,468)
Net income (loss) (592,804) (5,988)
(598,792)
Partners' capital
(deficit),
June 30, 2000 $ $ (231,456) $ 19,822,364
20,053,820
Series 18
Partners' Capital
(deficit)
April 1, 2000 $ $ (152,535) $ 15,769,263
15,921,798
Net income (loss) (483,821) (4,887) (488,708)
Partners' capital
(deficit),
June 30, 2000 $ $ (157,422) $ 15,280,555
15,437,977
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
Three Months Ended June 30,
(Unaudited)
Assignees General Total
Partner
Series 19
Partners' Capital
(deficit)
April 1, 2000 $ $ $ 22,273,797
22,401,533 (127,736)
Net income (loss) (435,277) (4,397) (439,674)
Partners' capital
(deficit),
June 30, 2000 $ $ (132,133) $ 21,834,123
21,966,256
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
2000 1999
Cash Flows from operating
activities:
Net Loss $(3,083,797) $(3,380,020)
Adjustments
Distributions from Operating
Partnerships 18,195 37,565
Amortization 17,225 25,170
Share of Loss from Operating
Partnerships 2,489,704 2,714,397
Changes in assets and
liabilities
(Decrease) Increase in
accounts 380,778
payable and accrued (2)
expenses
Decrease (Increase) in
accounts (56,925) (115,475)
Receivable
Decrease (Increase) in
accounts 682,332 424,931
Payable affiliates
Net cash (used in) provided
by 66,732 87,346
Operating activities
Cash Flows from investing
activities:
Capital contributions paid to
Operating Partnerships - -
Advances in Operating 54,340 -
Partnerships
Investments (1,752) (80,000)
Net cash (used in) provided by
investing activities 52,588 (80,000)
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
2000 1999
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 119,320 7,346
CASH EQUIVALENTS
Cash and cash equivalents, 1,754,063 1,693,799
beginning
Cash and cash equivalents, ending $ 1,873,383 $ 1,701,145
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 15
2000 1999
Cash Flows from operating
activities:
Net Loss $(576,166) $ (646,609)
Adjustments
Distributions from Operating
Partnerships 7 882
Amortization 2,628 2,628
Share of Loss from Operating
Partnerships 455,506 512,749
Changes in assets and
liabilities
(Decrease) Increase in
accounts 12,921
payable and accrued (1)
expenses
Decrease (Increase) in
accounts (1,715) (1,717)
Receivable
Decrease (Increase) in
accounts 137,013 138,141
payable affiliates
Net cash (used in) provided
by 17,272 18,995
operating activities
Cash Flows from investing
activities:
Capital contributions paid to
Operating Partnerships - -
Advances in Operating -
Partnerships 32,170
Investments - -
Net cash (used in) provided by
investing activities 32,170 -
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 15
2000 1999
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 49,442 18,995
CASH EQUIVALENTS
Cash and cash equivalents, 308,497 306,884
beginning
Cash and cash equivalents, ending $ 357,939 $ 325,879
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 16
2000 1999
Cash Flows from operating
activities:
Net Loss $(980,457) $(999,614)
Adjustments
Distributions from Operating
Partnerships 1,283 -
Amortization 4,213 4,214
Share of Loss from Operating
Partnerships 819,165 829,749
Changes in assets and
liabilities
(Decrease) Increase in
accounts - 12,260
payable and accrued
expenses
Decrease (Increase) in
accounts (6,698) (11,162)
Receivable
Decrease (Increase) in
accounts 172,995
payable affiliates 172,995
Net cash (used in) provided
by 10,501 8,442
operating activities
Cash Flows from investing
activities:
Capital contributions paid to
Operating Partnerships - -
Advances in Operating - -
Partnerships
Investments (1,752) -
Net cash (used in) provided by
investing activities (1,752) -
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 16
2000 1999
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 8,749 8,442
CASH EQUIVALENTS
Cash and cash equivalents, 307,415 213,451
beginning
Cash and cash equivalents, ending $ 316,164 $ 221,893
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 17
2000 1999
Cash Flows from operating
activities:
Net Loss $ (598,792) $(768,648)
Adjustments
Distributions from Operating
Partnerships 1,172 4,113
Amortization 3,888 11,662
Share of Loss from Operating
Partnerships 473,016 605,664
Changes in assets and
liabilities
(Decrease) Increase in
accounts - 342,298
payable and accrued
expenses
(Decrease) Increase in
accounts (42,591) (101,547)
receivable
Decrease (Increase) in
accounts 174,000 (84,531)
payable affiliates
Net cash (used in) provided
by 10,693 9,011
operating activities
Cash Flows from investing
activities:
Capital contributions paid to
Operating Partnerships - -
Advances in Operating -
Partnerships 22,170
Investments - -
Net cash (used in) provided by
Investing activities 22,170 -
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 17
2000 1999
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 32,863 9,011
CASH EQUIVALENTS
Cash and cash equivalents, 404,005 349,189
beginning
Cash and cash equivalents, ending $ 436,868 $ 358,200
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 18
2000 1999
Cash Flows from operating
activities:
Net Loss $(488,708) $(446,539)
Adjustments
Distributions from Operating
Partnerships 15,654 1,130
Amortization 2,854 2,853
Share of Loss from Operating
Partnerships 407,350 340,799
Changes in assets and
liabilities
(Decrease) Increase in
accounts - 7,310
payable and accrued
expenses
Decrease (Increase) in
accounts (1,284) (2,844)
Receivable
Decrease (Increase) in
accounts 95,487 95,488
payable affiliates
Net cash (used in) provided
by 31,353 (1,803)
operating activities
Cash Flows from investing
activities:
Capital contributions paid to
Operating Partnerships - -
Advances in Operating - -
Partnerships
Investments - -
Net cash (used in) provided by
investing activities - -
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
2000 1999
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 31,353 (1,803)
CASH EQUIVALENTS
Cash and cash equivalents, 377,094 306,065
beginning
Cash and cash equivalents, ending $ 408,447 $ 304,262
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 19
2000 1999
Cash Flows from operating
activities:
Net Loss (439,674) $(518,610)
Adjustments
Distributions from Operating
Partnerships 79 31,440
Amortization 3,642 3,813
Share of Loss from Operating
Partnerships 334,667 425,436
Changes in assets and
liabilities
(Decrease) Increase in
accounts (1) 5,989
payable and accrued
expenses
(Decrease) Increase in
accounts (4,637) 1,795
receivable/ other assets
Decrease (Increase) in
accounts 102,837 102,838
payable affiliates
Net cash (used in) provided
by (3,087) 52,701
operating activities
Cash Flows from investing
activities:
Capital contributions paid to
Operating Partnerships - -
Advances in Operating - -
Partnerships
Investments - (80,000)
Net cash (used in) provided by
investing activities - (80,000)
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
STATEMENTS OF CASH FLOWS
Three Months Ended June 30,
(Unaudited)
Series 19
2000 1999
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 (3,087) (27,299)
CASH EQUIVALENTS
Cash and cash equivalents, 357,052 518,210
beginning
Cash and cash equivalents, ending $ 353,965 $ 490,911
The accompanying notes are an integral part of this statement
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(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 through19 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
$4,080,000. The Fund issued the last BACs in Series 19 on
December 17, 1993. This concluded the Public Offering of the
Fund.
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2000
(Unaudited)
NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein as of
June 30, 2000 and for the three months then ended have been
prepared by the Fund, without audit. The Fund accounts for its
investments in Operating Partnerships using the equity method,
whereby the Fund adjusts its investment cost for its share of
each Operating Partnership's results of operations and for any
distributions received or accrued. Costs incurred by the Fund in
acquiring the investments in the Operating Partnerships are
capitalized to the
investment account. The Fund's accounting and financial
reporting policies
are in conformity with generally accepted accounting principles
and include
adjustments in interim periods considered necessary for a fair
presentation
of the results of operations. Such adjustments are of a normal
recurring
nature.
Investment
The Fund has included in investments Certificates of Deposit with
original materities of one year or less. These investments are
carried at costs.
Bston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2000
(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
On July 1, 1995, the Fund began amortizing unallocated
acquisition costs over 330 months from April 1, 1995. As of June
30, 2000 the Fund has accumulated unallocated acquisition
amortization totaling $367,213. The breakdown of accumulated
unallocated acquisition amortization within the fund as of June
30, 2000 and 1999 is as follows:
2000 1999
Series 15 $55,286 $44,774
Series 16 88,471 71,620
Series 17 89,540 81,765
Series 18 60,050 48,636
Series 19 73,866 59,296
$367,213 $306,091
NOTE C - RELATED PARTY TRANSACTIONS
The Fund has entered into several transactions with various
affiliates of the general partner, including Boston Capital
Partners, Inc., and Boston Capital Asset Management Limited
Partnership as follows:
Boston Capital Partners, Inc. is entitled to asset
acquisition fees for
selecting, evaluating, structuring, negotiating, and closing the
Fund's
acquisition of interests in the Operating Partnerships. Prior
to the quarter ended June 30, 2000 all series had completed
payment of all acquisition fees due to Boston Capital Partners,
Inc.
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2000
(Unaudited)
NOTE C - RELATED PARTY TRANSACTIONS - CONTINUED
An annual fund management fee based on .5 percent of the
aggregate cost of all apartment complexes owned by the Operating
Partnerships, has been accrued to Boston Capital Asset Management
Limited Partnership. The fund management fees accrued for the
quarter ended June 30, 2000 and 1999 are as follows:
2000 1999
Series 15 $137,013 $137,013
Series 16 172,995 172,995
Series 17 140,925 141,342
Series 18 95,487 95,487
Series 19 102,837 102,837
$649,257 $649,674
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS
At June 30, 2000 and 1999, the Fund had limited partnership
interests in 241 Operating Partnerships which own or are
constructing apartment complexes. The breakdown of Operating
Partnerships within the Fund at June 30, 2000 and 1999 is as
follows:
Series 15 68
Series 16 64
Series 17 49
Series 18 34
Series 19 26
241
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
June 30, 2000
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS - CONTINUED
Under the terms of the Fund's investment in each Operating
Partnership, the Fund is required to make capital contributions
to the Operating Partnerships. These contributions are payable
in installments over several years upon each Operating
Partnership achieving specified levels of construction and/or
operations. The contributions payable at June 30, 2000 and 1999
are as follows:
2000 1999
Series 15 $ 32,922 $ 32,922
Series 16 140,006 142,506
Series 17 1,206,768 1,367,195
Series 18 18,554 18,554
Series 19 34,000 34,000
$1,432,250 $1,595,177
The Fund's fiscal year ends March 31st of each year, while all
the Operating Partnerships' fiscal years are the calendar
year. Pursuant to the provisions of each Operating Partnership
Agreement, financial results for each of the Operating
Partnerships are provided to the Fund within 45 days after the
close of each Operating Partnership's quarterly
period. Accordingly, the current financial results available for
the Operating Partnerships are for the three months ended March
31, 2000.
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 15
2000 1999
Revenues
Rental $ 2,486,174 $ 2,427,558
Interest and other 82,688 83,133
2,568,862 2,510,691
Expenses
Interest 687,628 694,218
Depreciation and 902,907 954,000
amortization
Operating expenses 1,653,173 1,546,183
3,243,708 3,194,401
NET LOSS $ (674,846) $ (683,710)
Net loss allocation to
Boston
Capital Tax Credit Fund $ (455,506) $ (512,749)
III L.P.
Net loss allocated to other
Partners $ (6,748) $ (6,837)
Net loss suspended $ (212,592) $ (164,124)
The variance in allowable loss from the Operating Partnerships
for the three
months ended March 31, 2000 and 1999 is mainly a result of the
way the Partnership accounts for its investment in Operating
Partnerships. The Partnership 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.
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 16
2000 1999
Revenues
Rental $ 3,367,472 $ 3,085,327
Interest and other 139,573 142,545
3,507,045 3,227,872
Expenses
Interest 996,864 927,227
Depreciation and 1,239,477 1,209,040
amortization
Operating expenses 2,204,378 2,027,128
4,440,719 4,163,395
NET LOSS $ (933,674) $ (935,523)
Net loss allocation to
Boston
Capital Tax Credit Fund $ (819,165) $ (829,749)
III L.P.
Net loss allocated to other
Partners $ (9,337) $ (9,355)
Net loss suspended $ (105,172) $ (96,419)
The variance in allowable loss from the Operating Partnerships
for the three
months ended March 31, 2000 and 1999 is mainly a result of the
way the Partnership accounts for its investment in Operating
Partnerships. The Partnership 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.
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 17
2000 1999
Revenues
Rental $ 2,934,851 $ 2,737,626
Interest and other 106,438 87,828
3,041,289 2,825,454
Expenses
Interest 905,724 915,328
Depreciation and 930,184 911,848
amortization
Operating expenses 1,746,883 1,610,060
3,582,791 3,437,236
NET LOSS $ (541,502) $ (611,782)
Net loss allocation to
Boston
Capital Tax Credit Fund $ (473,016) $ (605,664)
III L.P.
Net loss allocated to other
Partners $ (68,486) $ (6,118)
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 18
2000 1999
Revenues
Rental $ 1,649,338 $ 1,610,813
Interest and other 86,082 86,695
1,735,420 1,697,508
Expenses
Interest 470,360 457,470
Depreciation and 630,183 623,236
amortization
Operating expenses 1,062,904 974,916
2,163,447 2,055,622
NET LOSS $ (428,027) $ (358,114)
Net loss allocation to
Boston
Capital Tax Credit Fund $ (407,350) $ (340,799)
III L.P.
Net loss allocated to other
Partners $ (4,280) $ (3,581)
Net loss suspended $ (16,397) $ (13,734)
The variance in allowable loss from the Operating Partnerships
for the three
months ended March 31, 2000 and 1999 is mainly a result of the
way the Partnership accounts for its investment in Operating
Partnerships. The Partnership 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.
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued)
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
Three months ended March 31,
(Unaudited)
Series 19
2000 1999
Revenues
Rental $ 2,375,194 $ 2,261,354
Interest and other 65,676 77,908
2,440,870 2,339,262
Expenses
Interest 803,038 843,587
Depreciation and 742,598 703,864
amortization
Operating expenses 1,240,333 1,221,544
2,785,969 2,768,995
NET LOSS $ (345,099) $ (429,733)
Net loss allocation to
Boston
Capital Tax Credit Fund $ (334,667) $ (425,436)
III L.P.
Net loss allocated to other
Partners $ (3,451) $ (4,297)
Net loss suspended $ $
(6,981) -
The variance in allowable loss from the Operating Partnerships
for the three
months ended March 31, 2000 and 1999 is mainly a result of the
way the Partnership accounts for its investment in Operating
Partnerships. The Partnership 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.
Boston Capital Tax Credit Fund III L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
NOTE E - TAXABLE LOSS
The Fund's taxable loss for the year ended March 31, 2001
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.
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. Fund management fees accrued during the quarter ended June
30, 2000 were $649,257 and total fund management fees accrued as
of June 30, 2000 were $12,850,253. 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 of
the Fund.
The Fund has recorded $928,656 as payable to affiliates.
This represents fundings to make advances and/or loans to certain
Operating Partnerships in Series 17 of the Fund.
Capital Resources
The Fund offered BACs in a Public Offering declared
effective by the Securities and Exchange Commission on January
24, 1992. The Fund received $38,705,000, $54,293,000,
$50,000,000, $36,162,000 and $40,800,000 representing 3,870,500,
5,429,402, 5,000,000, 3,616,200 and 4,080,000 BACs from investors
admitted as BAC Holders in Series 15, Series 16, Series 17,
Series 18, and Series 19, respectively. The Public Offering was
completed on December 17, 1993.
(Series 15) The Fund commenced offering BACs in Series 15 on
January 24, 1992. Offers and sales of BACs in Series 15 were
completed on June 26, 1992. The Fund has committed proceeds to
pay initial and additional installments of capital contributions
to 68 Operating Partnerships in the amount of $28,257,701.
During the quarter ended June 30, 2000, none of Series 15
net offering proceeds had been used to pay capital contributions.
Series 15 net offering proceeds in the amount of $32,922 remain
to be used by the Fund to pay remaining capital contributions to
the Operating Partnerships that Series 15 has invested in as of
June 30, 2000.
(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.
During the quarter ended June 30, 2000, none of Series 16
net offering proceeds had been used to pay capital
contributions. Series 16 net offering proceeds in the amount of
$140,006 remain to be used by the Fund to pay remaining capital
contributions to the Operating Partnerships that Series 16 has
invested in as of June 30, 2000.
(Series 17) The Fund commenced offering BACs in Series 17 on
January 24, 1993. Offers and sales of BACs in Series 17 were
completed on June 17, 1993. The Fund has committed proceeds to
pay initial and additional installments of capital contributions
to 49 Operating Partnerships in the amount of $36,538,204.
During the quarter ended June 30, 2000, none of Series 17
net offering proceeds had been used to pay capital
contributions. Series 17 net offering proceeds in the amount of
$436,868 remain to be used by the Fund to pay remaining capital
contributions to the Operating Partnerships that Series 17 has
invested in as of June 30, 2000.
(Series 18) The Fund commenced offering BACs in Series 18 on
June 17, 1993. Offers and sales of BACs in Series 18 were
completed on September 22, 1993. The Fund has committed proceeds
to pay initial and additional installments of capital
contributions to 34 operating Partnerships in the amount of
$26,442,202.
During the quarter ended June 30, 2000, none of Series 18
net offering proceeds had been used to pay capital
contributions. Series 18 net offering proceeds in the amount of
$18,554 remain to be used by the Fund to pay remaining capital
contributions to the Operating Partnerships that Series 18 has
invested in as of June 30, 2000.
(Series 19). The Fund commenced offering BACs in Series 19 on
October 8, 1993. Offers and sales of BACs in Series 19 were
completed on December 17, 1993. The Fund has committed proceeds
to pay initial and additional installments of capital
contributions to 26 Operating Partnerships in the amount of
$29,614,506.
During the quarter ended June 30, 2000, none of Series 19
net offering proceeds had been used to pay capital
contributions. Series 19 net offering proceeds in the amount of
$34,000 remain to be used by the Fund to pay remaining capital
contributions to the Operating Partnerships that Series 19 has
invested in as of June 30, 2000.
Results of Operations
As of June 30, 2000 and 1999 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 Federal Housing Tax
Credit. Occupancy of a unit in each Apartment Complex which
initially complied with the Minimum Set-Aside Test (i.e.,
occupancy by tenants with incomes equal to no more than a certain
percentage of area median income) and the Rent Restriction Test
(i.e., gross rent charged tenants does not exceed 30% of the
applicable income standards) is referred to hereinafter as
"Qualified Occupancy." Each of the Operating Partnerships and
each of the respective Apartment Complexes are described more
fully in the Prospectus or applicable report on Form 8-K. The
General Partner believes that there is adequate casualty
insurance on the properties.
The results of operations for future periods are likely to
vary from those for the period ended June 30, 2000. 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 $118,637, $154,922, $138,451,
$86,189, and $79,829 respectively.
The Fund's investment objectives do not include receipt of
significant cash distributions from the Operating Partnerships in
which it has invested or intends to invest. The Fund's
investments in Operating Partnerships have been made principally
with a view towards realization of Federal Housing Tax Credits
for allocation to its partners and BAC holders.
(Series 15) As of June 30, 2000 and 1999, the average qualified
occupancy for the series was 100% for both years. The series had
a total of 68 properties at June 30, 2000, all of which were at
100% qualified occupancy.
For the three months being reported Series 15 reflects a net
loss from Operating Partnerships of $674,846. When adjusted for
depreciation, which is a non-cash item, the Operating
Partnerships reflect positive operations of $228,061. This is an
interim period estimate; it is not necessarily indicative of the
final year end results.
Operations continue to improve at Hidden Cove Apartments
(Hidden Cove) as evidenced by stabilized occupancy and increased
rental collections. To date, the property has been able to
complete minor capital improvements and fund its replacement
reserve account without financial assistance. It is anticipated
that the property will be able to operate at breakeven, barring
any significant unforeseen repairs. At this time, the Operating
General Partner has commenced negotiations with the property's
management company aimed at transferring the Operating General
Partnership interest to that entity. It is anticipated that the
addition of a local Operating General Partner will enhance the
property's ability to refinance its permanent mortgage.
As part of the January 1999 debt restructure of School
Street I LP, (School Street Apt. Phase I) the lender instituted a
capital improvements project to be completed by December 1999.
At year end most of the required improvements were completed.
The lender has agreed to extend the deadline for the remaining
items. In an effort to further improve operations at the
property the Operating General Partner hired a new management
company in September 1999. The new management company has been
pursuing evictions of delinquent tenants, and as a result the
average occupancy of the property declined to 50% in the fourth
quarter of 1999. Occupancy has improved since the evictions and
was at 62% as of June 2000. The Operating General Partner is
continuing to actively participate with the new management
company in the partnership's operations in order to achieve
stable high occupancy and positive cash flow at the property.
(Series 16) As of June 30, 2000 and 1999, the average qualified
occupancy for the series was 99.7% for both years. The series had
a total of 64 properties at June 30, 2000. Out of the total, 62
had 100% qualified occupancy.
For the three months being reported Series 16 reflects a net
loss from Operating Partnerships of $933,674. When adjusted for
depreciation, which is a non-cash item, the Operating
Partnerships reflect positive operations of $305,803. This is an
interim period estimate; it is not necessarily indicative of the
final year end results.
Cass Partners, L.P. (Fitzgerald Apartments) continues to
operate below breakeven due to low occupancy. An increasing
supply of affordable housing in the area with superior amenities
has hampered marketing efforts and made tenant retention
difficult. Average physical occupancy for the first half of 2000
was 80.8%, down from an average of 85.4% in 1999. The Business
Plan for the year 2000 outlines the following programs to
increase occupancy: replace the building signage, improve the
physical appearance of the property's common areas, and negotiate
parking agreements with an other landlords to alleviate the issue
of limited parking. The Operating General Partner continues to
support the property financially and is working to refinance the
partnership's second mortgage, which matures in August 2000.
(Series 17) As of June 30, 2000 and 1999, the average qualified
occupancy for the series was 99.7% for both years. The series
had a total of 49 properties at June 30, 2000. Out of the total
48 had 100% qualified occupancy.
For the three months being reported Series 17 reflects a net
loss from Operating Partnerships of $541,502. When adjusted for
depreciation, which, is a non-cash item, the Operating
Partnerships reflect positive operations of $388,682. This is an
interim period estimate; it is not necessarily indicative of the
final year end results.
Annadale Housing Partners (Kingsview Manor & Estates)
reported net losses due to operational issues associated with the
property. In order to address these issues, the Operating
General Partner hired a consultant to assist management in
aggressively marketing the property. In addition, the management
agent hired a new on-site manager and leasing agent. As a result
of these changes, occupancy reached 92% as of December 31, 1999,
93.7% as of March 31, 2000 and 92.3% as of June 30, 2000. In
order to reduce operating costs, a loan restructure was finalized
with the first mortgage lender. In exchange for payment by the
Operating General Partner of $620,457, the monthly mortgage
payments were reduced by 79%, thereby alleviating the property of
a large monthly cash obligation. The payment to the first
mortgage holder was funded through the sale of a portion of the
Operating Partnerships future credit stream. With the additional
cash available from a lower monthly debt service payment and
increased rental rates, property operations are anticipated to
improve significantly over prior years. As of June 30, 2000, the
property has been successful in maintaining break-even
operations. The Investment General Partner continues to monitor
this situation closely.
The property owned by California Investors VI LP (Orchard
Park) has sustained a physical occupancy of 94.6% for the first
six months of 2000. This stability has been the result of the
management company's aggressive marketing efforts and the many
capital improvements completed at the property, including office
renovations and the addition of an activity center. These
improvements have been successful in attracting and retaining
tenants. The property's surrounding area is experiencing
economic growth which include a major public sports park,
currently being developed next to Orchard Park and scheduled to
be completed in the fall of 2000. In addition to the park, a
high school is in the process of construction. It is however,
progressing slowly and its completion date is unknown as of this
time. These types of public development in the area should
increase the quantity of automobile traffic around Orchard Park
and in turn should continue to assist with marketing efforts.
Currently, the Investment Limited Partner is negotiating with a
third party to assume the management of the partnership along
with the general partner interest.
Physical occupancy at Palmetto Properties Ltd. (Palmetto
Villas) has remained at an average of 78% through the second
quarter of 2000. Occupancy at the site begun to drop early in
1999 due to poor on-site management and significant deferred
maintenance issues. As a result, the property management company
was replaced in January 2000. However, due to a lack of
replacement reserve funds to rehabilitate vacant units, occupancy
remains low. In addition, the property is in arrears on its real
estate tax payments for 1998 and 1999. At this time, the
Investment General Partner is working with the new management
company to obtain low interest deferred maintenance loans to
complete necessary repairs, improve occupancy and cure the tax
delinquency. The Investment General Partner has entered into
negotiations with the current Operating General Partner aimed at
removing him from the partnership. The new management company
has expressed interest in assuming the role of Operating General
Partner, and based on the management company's performance to
date, the partnership would benefit substantially from this
arrangement.
(Series 18) As of June 30, 2000 and 1999 the average qualified
occupancy for the series was 100% for both years. The series had
a total of 34 properties at June 30, 2000, out of the total all
had 100% qualified occupancy.
For the three months being reported Series 18 reflects a net
loss from Operating Partnerships of $428,027. When adjusted for
depreciation, which is a non-cash item, the Operating
Partnerships reflect positive operations of $202,156. This is an
interim period estimate; it is not necessarily indicative of the
final year end results.
Harris Housing Limited Partnership (Harris Music Lofts)
operated with a net loss during 1999 primarily as a result of
high operating expenses. The Operating General Partner infused
cash to fund operating deficits for the year. Operating costs on
this property are high particularly in administration and
maintenance. In addition to high expenses, the property suffers
from under-funded tax and insurance and security deposit escrows.
Despite the occupancy, which averaged at 97.8% during 1999, the
property was unable to fund these accounts. Average occupancy
for the first six months of 2000 was 97.4%, a slight decrease
over the 1999 average. Unless expenses are significantly
reduced, the property will continue to operate at a deficit and
will be unable to fund the shortfall in the required accounts.
It is the intention of the Operating General Partner to
streamline expenses by sharing personnel and bulk ordering of
supplies with another property that is only one mile away.
However, at this time, the referenced property has not completed
construction. It is the Operating General Partner's belief these
efforts to streamline expenses should occur within the next 90
days. In addition, there was a rent increase effective May 1,
2000 which should generate some additional revenue for the
property.
Marengo Park Apartments, Limited Partnership is operating
below breakeven due to low occupancy levels. Occupancy averaged
76.7% in 1999. Through the second quarter of 2000 occupancy has
averaged 79.9%. Management has attributed the occupancy problem
to the local economy. In Marengo, potential tenants do not
consider 30% of their income a good rent. Single-family homes in
the area may be rented for the same amount. As a result of weak
occupancy, the property suffers from underfunded reserves, and a
delinquent tax status. 1999 property taxes in the amount of
$21,939 went unpaid, and were recently vouchered and paid by
Rural Development. As a result of their vouchering the taxes,
Rural Development has issued a notice of acceleration on the
debt. The Investment General Partner has appealed this ruling,
and is currently in discussion with Rural Development to
facilitate a mutually acceptable workout plan in order to avoid a
foreclosure.
Parvin's Limited Partnership (Parvin's Branch Townhomes)
continues to incur operating deficits due to higher than average
operating expenses and occupancy issues with its six transitional
units. The Operating General Partner and the Management Company
have been deferring their respective fees to improve the
property's cash flow. In addition, the Operating General Partner
continues to fund deficits. The property's 18 non-transitional
housing units operate with a strong occupancy, however, the six
transitional units incur significant turnover, which results in
increased operating expense. The Operating General Partner has
taken a more active role in the leasing and day to day management
of the six transitional units. It was previously reported that
the Operating General Partner was successful in removing the six
transitional units from the program and that as of January 1,
2000, all six units would be available to non-transitional
qualified residence. However, the Investment Limited Partner was
recently informed that two units will remain in the Transitional
Housing program. The property operated with an average occupancy
of 91.7% in the second quarter of 2000, up from 86.1% in the
first quarter. The management company continues to monitor
operating expenses and reports that expenses remain stable and
within acceptable levels.
(Series 19) As of June 30, 2000 and 1999 the average qualified
occupancy for the series was 100% for both years. The series had
a total of 26 properties at June 30, 2000, all of which were at
100% qualified occupancy.
For the three months being reported Series 19 reflects a net
loss from Operating Partnerships of $345,099. When adjusted for
depreciation, which is a non-cash item, the Operating
Partnerships reflect positive operations of $397,499. This is an
interim period estimate; it is not necessarily indicative of the
final year end results.
Year 2000 Compliance
As previously stated in the Partnership's 10-K, Boston
Capital and its management have reviewed the potential computer
problems that may arise from the century date change known as the
"Year 2000" or "Y2K" problem. We are happy to announce that we
did not experience any computer-related problems as a result of
this date change and therefore, there was no impact on our
investors.
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
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: June 15, 2000 By: /s/ John P. Manning
-------------------
John P. Manning,
Partner & Principal
Financial
Officer