FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 ------------- or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to -------- -------- Commission file number 0-21718 ----------------------------------------- BOSTON CAPITAL TAX CREDIT FUND III L.P. - ----------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 52-1749505 - -------------------------------- ----------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Boston Place, Suite 2100, Boston, Massachusetts 02108 - ----------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (617) 624-8900 -------------- - ----------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days. Yes X No ------ ------ BOSTON CAPITAL TAX CREDIT FUND III L.P. -------------------------------------------------- QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1996 ----------------------------------------------- TABLE OF CONTENTS ----------------- PART I - FINANCIAL INFORMATION Item 1. Financial Statements.............................. Balance Sheets.................................... Statements of Operations.......................... Statement of Changes in Partners' Capital......... Statements of Cash Flows.......................... Notes to Financial Statements..................... Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..................................... PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K.................. Signatures........................................ Boston Capital Tax Credit Fund III L.P. BALANCE SHEETS June 30, March 31, 1996 1996 (Unaudited) (Audited) ------------ ------------ ASSETS INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $145,684,363 $147,259,013 OTHER ASSETS Cash and cash equivalents 6,063,420 4,958,860 Investments 3,431,304 5,141,767 Notes receivable 2,848,821 4,962,160 Deferred acquisition costs, net of accumulated amortization (Note B) 1,827,042 2,144,343 Organization costs, net of accumulated amortization (Note B) 354,302 399,040 Other assets 2,485,382 2,420,327 ----------- ----------- $162,694,634 $167,285,510 =========== =========== LIABILITIES Accounts payable & accrued expenses (Note C) $ 8,050 $ 75,208 Accounts payable affiliates 5,099,835 4,454,405 Capital contributions payable (Note D) 8,863,726 9,539,884 ----------- ----------- 13,971,611 14,069,497 ----------- ----------- PARTNERS' CAPITAL Limited Partners Units of limited partnership interest, $10 stated value per BAC; 22,000,000 authorized BACs; 21,996,102 issued and outstanding, as of June 30, 1996 149,115,437 153,561,702 General Partner (402,531) (357,619) Unrealized gain (loss) on securities available for sale, net 10,117 11,930 ----------- ----------- 148,723,023 153,216,013 ----------- ----------- $162,694,634 $167,285,510 =========== =========== The accompanying notes are an integral part of these statements. 1 Boston Capital Tax Credit Fund III L.P. BALANCE SHEETS SERIES 15 ---------------------------- June 30, March 31, 1996 1996 (Unaudited) (Audited) ----------- --------- ASSETS INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $20,916,892 $ 21,718,070 OTHER ASSETS Cash and cash equivalents 197,601 163,428 Investments - 151,943 Notes receivable 185,000 185,000 Deferred acquisiton costs, net of accumulated amortization (Note B) 275,931 281,199 Organization costs, net of accumulated amortization (Note B) 19,674 26,232 Other assets 323,150 292,164 ---------- ---------- $21,918,248 $ 22,818,036 ========== ========== LIABILITIES Accounts payable and accrued expenses (Note C) $ 1,355 $ 68,856 Accounts payable affiliates 1,401,648 1,264,641 Capital contributions payable (Note D) 189,312 202,750 ---------- ---------- 1,592,315 1,536,247 ---------- ---------- PARTNERS' CAPITAL Limited Partners Units of limited partnership interest, $10 stated value per BAC; 22,000,000 authorized BACs; 21,996,102 issued and oustanding, as of June 30, 1996 20,455,345 21,401,297 General Partner (129,412) (119,857) Unrealized gain (loss) on securities available for sale, net - 349 ---------- ---------- 20,325,933 21,281,789 ---------- -------- $21,918,248 $ 22,818,036 ========== ========== The accompanying notes are an integral part of these statements. 2 Boston Capital Tax Credit Fund III L.P. BALANCE SHEETS SERIES 16 ---------------------------- June 30, March 31, 1996 1996 ASSETS (Unaudited) (Audited) ----------- --------- INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $36,143,015 $37,074,575 OTHER ASSETS Cash and cash equivalents 1,474,729 1,429,491 Investments 315,854 394,836 Notes receivable - 483,464 Deferred acquisition costs net of accumulated amortization (Note B) 437,686 445,554 Organization costs, net of accumulated amortization (Note B) 78,103 89,261 Other assets 19,003 38,197 ---------- ---------- $38,468,390 $39,955,378 ========== ========== LIABILITIES Accounts payable & accrued expenses (Note C) $ 100 $ 100 Accounts payable affiliates 1,424,102 1,251,118 Capital contributions payable (Note D) 329,879 900,481 ---------- --------- 1,754,081 2,151,699 ========== ========== PARTNERS' CAPITAL Limited Partners Units of limited partnership interest, $10 stated value per BAC; 22,000,000 authorized BACs; 21,996,102 issued and outstanding, as of June 30, 1996 36,812,867 37,891,343 General Partner (99,475) (88,581) Unrealized gain (loss) on securities available for sale, net 917 917 ---------- ---------- 36,714,309 37,803,679 ---------- ---------- $38,468,390 $39,955,378 ========== ========== The accompanying notes are an integral part of these statements. 3 Boston Capital Tax Credit Fund III L.P. BALANCE SHEETS SERIES 17 ---------------------------- June 30, March 31, 1996 1996 ASSETS (Unaudited) (Audited) ----------- --------- INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $33,427,494 $34,318,721 OTHER ASSETS Cash and cash equivalents 740,006 285,417 Investments - 629,950 Notes receivable 1,643,475 1,658,475 Deferred acquisition costs net of accumulated amortization (Note B) 408,184 415,482 Organization costs, net of accumulated amortization (Note B) 80,330 90,262 Other assets 1,269,537 1,245,840 ---------- ---------- $37,569,026 $38,644,147 ========== ========== LIABILITIES Accounts payable & accrued expenses (Note C) $ - $ - Accounts payable affiliates 1,169,916 1,021,686 Capital contributions payable (Note D) 2,157,418 2,312,721 ---------- ---------- 3,327,334 3,334,407 ---------- ---------- PARTNERS' CAPITAL Limited Partners Units of limited partnership interest, $10 stated value per BAC; 22,000,000 authorized BACs; 21,996,102 issued and outstanding, as of June 30, 1996 34,328,954 35,384,872 General Partner (87,262) ( 76,596) Unrealized gain (loss) on securities available for sale, net - 1,464 ---------- ---------- 34,241,692 35,309,740 ---------- ---------- $37,569,026 $38,644,147 ========== ========== The accompanying notes are an integral part of these statements. 4 Boston Capital Tax Credit Fund III L.P. BALANCE SHEETS SERIES 18 ---------------------------- June 30, March 31, 1996 1996 (Unaudited) (Audited) ------------ ---------- ASSETS INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $25,461,279 $26,102,954 OTHER ASSETS Cash and cash equivalents 920,555 529,400 Investments 194,120 647,930 Notes receivable 536,351 536,351 Deferred acquisition costs, new of accumulated amortization (Note B) 300,542 305,861 Organization costs, net of accumulated amortization (Note B) 72,592 80,280 Other assets 5,514 8,052 ---------- ---------- $27,490,953 $28,210,828 ========== ========== LIABILITIES Accounts payable & accrued expenses (Note C) $ 1,750 $ 1,751 Accounts payable affiliates 529,587 434,163 Capital contributions payable (Note D) 812,411 861,315 ---------- ---------- 1,343,748 1,297,229 ---------- ---------- PARTNERS' CAPITAL Limited Partners Units of limited partnership interest, $10 stated value per BAC; 22,000,000 authorized BACs; 21,996,102 issued and outstanding, as of June 30, 1996 26,194,474 26,953,204 General Partner (48,770) (41,106) Unrealized gain (loss) on securities available for sale, net 1,501 1,501 ---------- ---------- 26,147,205 26,913,599 ---------- ---------- $27,490,953 $28,210,828 ========== ========== The accompanying notes are an integral part of these statements. 5 Boston Capital Tax Credit Fund III L.P. BALANCE SHEETS SERIES 19 ---------------------------- June 30 March 31, 1996 1996 (Unaudited) (Audited) ------------ ---------- ASSETS INVESTMENTS IN OPERATING PARTNERSHIPS (Note D) $29,735,683 $28,044,693 OTHER ASSETS Cash and cash equivalents 2,730,529 2,551,124 Investments 2,921,330 3,317,108 Notes receivables 483,995 2,098,870 Deferred acquisition costs, net of accumulated amortization (Note B) 404,699 696,247 Organization costs, net of accumulated amortization (Note B) 103,603 113,005 Other assets 868,178 836,074 ---------- ---------- $37,248,017 $37,657,121 ========== ========== LIABILITIES Accounts payable & accrued expenses (Note C) $ 4,845 $ 4,501 Accounts payable affiliates 574,582 482,797 Capital contributions payable (Note D) 5,374,706 5,262,617 ---------- ---------- 5,954,133 5,749,915 ---------- ---------- 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, 1995 31,323,797 31,930,986 General Partner (37,612) (31,479) Unrealized gain (loss) on securities available for sale, net 7,699 7,699 ---------- ---------- 31,293,884 31,907,206 ---------- ---------- $37,248,017 $37,657,121 ========== ========= The accompanying notes are an integral part of these statements. 6 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Three Months Ended June 30, (Unaudited) 1996 1995 ---- ---- Income Interest income $ 142,134 $ 215,480 Miscellaneous income - - ---------- ---------- 142,134 215,480 ---------- ---------- Share of loss from Operating Partnerships (Note D) (3,861,444) (3,195,753) ---------- ---------- Expenses Professional fees 89,824 23,834 Fund management fee (Note C) 547,465 618,850 Amortization 61,529 44,740 General and administrative expenses 73,049 103,849 ---------- ---------- 771,867 791,273 ---------- ---------- NET LOSS $(4,491,177) $(3,771,546) ========== ========== Net loss allocated to limited partners $(4,446,265) $(3,733,831) ========== ========== Net loss allocated general partner $ (44,912) $ (37,715) ========== ========== Net loss per BAC $ (.99) $ ( .83) ========== ========== The accompanying notes are an integral part of these statements. 7 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Three Months Ended June 30, (Unaudited) SERIES 15 ----------------------- 1996 1995 ---- ---- Income Interest income $ 2,763 $ 7,344 Miscellaneous income - - -------- -------- 2,763 7,344 -------- -------- Share of loss from Operating Partnerships (800,082) (774,763) -------- -------- Expenses Professional fees 21,689 1,866 Fund management fee (Note c) 119,161 126,883 Amortization 9,186 6,558 General and administrative expenses (Note C) 8,152 13,251 -------- -------- 158,188 148,558 -------- -------- NET LOSS $(955,507) $(915,977) ======== ======== Net loss allocated to limited partners $(945,952) $(906,817) ======== ======== Net loss allocated to general partner $ (9,555) $ (9,160) ======== ======== Net loss per BAC $ (.24) $ (.23) ======== ======== The accompanying notes are an integral part of these statements. 8 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Three Months Ended June 30, (Unaudited) SERIES 16 ------------------------ 1996 1995 ---- ---- Income Interest income $ 17,965 $ 21,359 Miscellaneous income - - ---------- ---------- 17,965 21,359 ---------- ---------- Share of loss from Operating Partnerships (930,907) (874,194) ---------- ---------- Expenses Professional fees 16,418 3,054 Fund management fee (Note C) 130,625 158,648 Amortization 15,326 16,897 General and administrative expenses (Note C) 14,059 11,158 ---------- ---------- 176,428 189,757 -------- ---------- NET LOSS $(1,089,370) $(1,042,592) ========= ========== Net loss allocated to limited partners $(1,078,476) $(1,032,167) ========== ========== Net loss allocated to general partner $ (10,894) $ (10,425) ========== ========== Net loss per BAC $ (.19) $ (.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 June 30, (Unaudited) SERIES 17 ------------------------ 1996 1995 ---- ---- Income Interest income $ 19,141 $ 45,993 Miscellaneous income - - ---------- -------- 19,141 45,993 ---------- -------- Share of loss from Operating Partnerships (886,292) (755,529) ---------- -------- Expenses Professional fees 27,669 5,817 Fund management fee (Note C) 147,980 134,847 Amortization 13,820 9,932 General and administrative expenses (Note C) 9,964 20,467 ---------- -------- 199,433 171,063 ---------- -------- NET LOSS $(1,066,584) $(880,599) ========== ======== Net loss allocated to limited partners $(1,055,918) $(871,793) ========== ======== Net loss allocated to general partner $ (10,666) $ (8,806) ========== ======== Net loss per BAC $ (.21) $ (.17) ========== ======== The accompanying notes are an integral part of these statements. 10 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Three Months Ended June 30, (Unaudited) SERIES 18 ---------------------- 1996 1995 ---- ---- Income Interest income $ 14,504 $ 59,514 Miscellaneous income - - -------- -------- 14,504 59,514 -------- -------- Share of loss from Operating Partnerships (664,669) (387,516) -------- -------- Expenses Professional fees 9,351 6,811 Fund management fee (Note C) 86,826 93,019 Amortization 10,542 7,689 General and administrative expenses (Note C) 9,510 20,743 -------- -------- 116,229 128,262 -------- -------- NET LOSS $(766,394) $(456,264) ======== ======== Net loss allocated to limited partners $(758,730) $(451,701) ======== ======== Net loss allocated to general partner $ (7,664) $ (4,563) ======== ======== Net loss per BAC $ (.20) $ (.12) ======== ======== The accompanying notes are an integral part of these statements. 11 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF OPERATIONS Three Months Ended June 30, (Unaudited) SERIES 19 ---------------------- 1996 1995 ---- ---- Income Interest income $ 87,761 $ 81,270 Miscellaneous income - - -------- -------- 87,761 81,270 -------- -------- Share of loss from Operating Partnerships (579,494) (403,751) -------- -------- Expenses Professional fees 14,697 6,286 Fund management fee (Note C) 62,873 105,453 Amortization 12,655 9,403 General and administrative expenses (Note C) 31,364 32,491 -------- -------- 121,589 153,633 -------- -------- NET LOSS $(613,322) $(476,114) ======== ======== Net loss allocated to limited partners $(607,189) $(471,353) ======== ======== Net loss allocated to general partner $ (6,133) $ (4,761) ======== ======== Net loss per BAC $ (.15) $ (.12) ======== ======== The accompanying notes are an integral part of these statements. 12 Boston Capital Tax Credit Fund III L.P. STATEMENT OF CHANGES IN PARTNERS' CAPITAL Three Months Ended June 30, 1996 (Unaudited) Unrealized Capital gain (loss) on securities available General for Assignees Partner sale, net Total --------- ------- --------- ----- Partners' capital (deficit) April 1, 1996 $153,561,702 $(357,619) $ 11,930 $153,216,013 Net change in unrealized gain (loss) on secur- ities available for sale - - (1,813) (1,813) Net income (loss) (4,446,265) (44,912) - (4,491,177) ----------- -------- --------- ----------- Partners' capital (deficit), June 30, 1996 $149,115,437 $(402,531) $ 10,117 $148,723,023 =========== ======== ========== =========== The accompanying notes are an integral part of these statements. 13 Boston Capital Tax Credit Fund III L.P. STATEMENT OF CHANGES IN PARTNERS' CAPITAL Three Months Ended June 30, 1996 (Unaudited) Unrealized gain (loss) on securities available General for Assignees Partner sale,net Total --------- ------- -------- ----- Series 15 - --------- Partners' capital (deficit), April 1, 1996 $21,401,297 $(119,857) $ 349 $21,281,789 Net change in unrealized gain (loss) on secur- ities available for sale - - (349) (349) Net income (loss) (945,952) (9,555) - (955,507) ---------- -------- ---------- ---------- Partners' capital (deficit), June 30, 1996 $20,455,345 $(129,412) $ - $20,325,933 ========== ======== ========== ========== Series 16 - --------- Partners' capital (deficit), April 1, 1996 $37,891,343 $ (88,581) $ 917 $37,803,679 Net change in unrealized gain (loss) on secur- ities available for sale - - - - Net income (loss) (1,078,476) (10,894) - $(1,089,370) --------- ------- --------- ---------- Partners' capital (deficit), June 30, 1996 $36,812,867 $(99,475) $ 917 $36,714,309 ========= ======= ========= ========== The accompanying notes are an integral part of these statements. 14 Boston Capital Tax Credit Fund III L.P. STATEMENT OF CHANGES IN PARTNERS' CAPITAL Three Months Ended June 30, 1996 (Unaudited) Unrealized gain (loss) on securities available General for Assignees Partner sale,net Total --------- ------- -------- ----- Series 17 - --------- Partners' capital (deficit), April 1, 1996 $35,384,872 $ (76,596) $ 1,464 $35,309,740 Net change in unrealized gain (loss) on secur- ities available for sale - - (1,464) (1,464) Net income (loss) (1,055,918) (10,666) - (1,066,584) ---------- -------- --------- ---------- Partners' capital (deficit), June 30, 1996 $34,328,954 $ (87,262) $ - $34,241,692 ========== ======== ========= ========== Series 18 - --------- Partners' capital (deficit), April 1, 1996 $26,953,204 $ (41,106) $ 1,501 $26,913,599 Net change in unrealized gain (loss) on secur- ities available for sale - - - - Net income (loss) (758,730) (7,664) - (766,394) --------- ------- --------- ---------- Partners' capital (deficit), June 30, 1996 $26,194,474 $(48,770) $ 1,501 $26,147,205 ========= ======= ========= ========== The accompanying notes are an integral part of these statements. 15 Boston Capital Tax Credit Fund III L.P. STATEMENT OF CHANGES IN PARTNERS' CAPITAL Three Months Ended June 30, 1996 (Unaudited) Unrealized gain (loss) on securities available General for Assignees Partner sale,net Total --------- ------- -------- ----- Series 19 - --------- Partners' capital (deficit), April 1, 1996 $31,930,986 $ (31,479) $ 7,699 $31,907,206 Net change in unrealized gain (loss) on secur- ities available for sale - - - - Net income (loss) (607,189) (6,133) - (613,322) ---------- -------- ---------- ---------- Partners' capital (deficit), June 30, 1996 $31,323,797 $ (37,612) $ 7,699 $31,293,884 ========== ======== ========== ========== 16 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Three Months Ended June 30, (Unaudited) 1996 1995 ---- ---- Cash flows from operating activities: Net loss $(4,491,177) $(3,771,546) Adjustments Distributions from Operating Partnerships 4,218 5,019 Amortization 61,529 44,740 Share of loss from Operating Partnerships 3,861,444 3,195,753 Changes in assets and liabilities (Decrease) Increase in accounts payable and accrued expenses (67,156) 11,207 Decrease (Increase) in accounts receivable 48,149 1,579,628 Decrease (Increase) in accounts payable affiliates 645,430 645,588 ---------- ---------- Net cash (used in) provided by operating activities 62,437 1,710,389 ---------- ---------- Cash flows from investing activities: Acquisition costs repaid (paid) for operating Partnerships acquired or to acquire 15,000 (45,571) Capital contributions paid to Operating Partnerships (2,681,665) (10,501,309) Advances to Operating Partnerships 1,982,839 105,095 Investments 1,708,650 4,671,801 ---------- ----------- Net cash (used in) provided by investing activities 1,024,824 (5,769,984) ---------- ---------- 17 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Three Months Ended June 30, (Unaudited) 1996 1995 ---- ---- Continued - --------- Cash flows from financing activity: Credit adjusters received from Operating Partnerships 17,299 742 ---------- ---------- Net cash (used in) provided by financing activity 17,299 742 ---------- ---------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,104,560 (4,058,853) ---------- ---------- Cash and cash equivalents, beginning 4,958,860 10,181,096 ---------- ---------- Cash and cash equivalents, ending $ 6,063,420 $ 6,122,243 ========== ========== Supplemental schedule of noncash investing and financing activites: The fund has increased its investments for unpaid capital contributions due to the Operating Partnerships $ 1,984,974 $ - ========== ========== The accompanying notes are an integral part of these statements. 18 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Three Months Ended June 30, (Unaudited) Series 15 ------------------------- 1996 1995 ---- ---- Cash flows from operating activities: Net loss $(955,507) $(915,977) Adjustments Distributions from Operating Partnerships 1,096 2,670 Amortization 9,186 6,558 Share of loss from Operating Partnerships 800,082 774,763 Changes in assets and liabilities (Decrease) increase in accounts payable and accrued expenses (67,501) 2,433 Decrease (Increase) in accounts receivable 934 75,866 Decrease (Increase) in accounts payable affiliates 137,007 137,004 -------- -------- Net cash provided by (used in) operating activities (74,703) 83,317 -------- -------- Cash flows from investing activities: Acquisiton costs repaid (paid) for Operating Partnerships acquiared or to acquire 2,640 (5,891) Capital contributions paid to Operating Partnerships (13,438) (510,895) Advances to Operating Partnerships (31,920) 67,500 Investments 151,594 15,116 -------- -------- Net cash used in investing activities 108,876 (434,170) -------- -------- 19 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Three Months Ended June 30, (Unaudited) Series 15 ---------------------- 1996 1995 ---- ---- 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 34,173 (350,853) Cash and cash equivalents, beginning 163,428 976,876 -------- -------- Cash and cash equivalents, ending $ 197,601 $ 626,023 ======== ======== Supplemental schedule of noncash investing and financing activities The Fund has increased its investments for unpaid capital contributions due to the Operating Partnerships $ - $ - ======== ========= The accompanying notes are an integral part of these statements. 20 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Three Months Ended June 30, (Unaudited) Series 16 ------------------------- 1996 1995 ---- ---- Cash flows from operating activities: Net loss $(1,089,370) $(1,042,592) Adjustments Distributions from Operating Partnerships 652 2,349 Amortization 15,326 11,158 Share of loss from Operating Partnerships 930,907 874,194 Changes in assets and liabilities (Decrease) increase in accounts payable and accrued expenses - 1,893 Decrease (Increase) in accounts receivable 1,895 (12,367) Decrease (Increase) in accounts payable affiliates 172,984 172,860 ---------- ---------- Net cash provided by (used in) operating activities 32,394 7,495 ---------- ---------- Cash flows from investing activities: Acquisiton costs repaid (paid) for Operating Partnerships acquiared or to acquire 3,700 (24,275) Capital contributions paid to Operating Partnerships (570,602) (1,023,950) Advances to Operating Partnerships 483,465 (1,000) Investments 78,982 294,080 ---------- ---------- Net cash used in investing activities 4,455 (755,145) ---------- ---------- 21 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Three Months Ended June 30, (Unaudited) Series 16 ----------------------- 1996 1995 ---- ----- Continued - --------- Cash flows from financing activity: Credit adjusters received from Operating Partnerships 17,299 - --------- ---------- Net cash (used in) provided by financing activity 17,299 - --------- ---------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 45,238 (747,650) Cash and cash equivalents, beginning 1,429,491 2,757,494 ---------- ---------- Cash and cash equivalents, ending $ 1,474,729 $ 2,009,844 ========== ========== Supplemental schedule of noncash investing and financing activities: The Fund has increased its investments for unpaid capital contributions due to the Operating Partnerships $ - $ - ========== ========== The accompanying notes are an integral part of these statements. 22 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Three Months Ended June 30, (Unaudited) Series 17 ------------------------- 1996 1995 ---- ---- Cash flows from operating activities: Net loss $(1,066,584) $ (880,599) Adjustments Distributions from Operating Partnerships - - Amortization 13,820 9,932 Share of loss from Operating Partnerships 886,292 755,529 Changes in assets and liabilities (Decrease) increase in accounts payable and accrued expenses - 2,016 Decrease (Increase) in accounts receivable 26,886 15,367 Decrease (Increase) in accounts payable affiliates 148,230 134,847 ---------- ---------- Net cash provided by (used in) operating activities 8,644 37,092 ---------- ---------- Cash flows from investing activities: Acquisiton costs repaid (paid) for Operating Partnerships acquiared or to acquire 3,410 (9,592) Capital contributions paid to Operating Partnerships (150,370) (1,037,360) Advances to Operating Partnerships (35,581) - Investments 628,486 209,870 ---------- ---------- Net cash used in investing activities 445,945 (837,082) ---------- ---------- 23 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Three Months Ended June 30, (Unaudited) Series 17 ------------------------ 1996 1995 ---- ---- Continued - --------- Cash flows from financing activity: Credit adjusters received from Operating Partnerships - 742 ---------- ---------- Net cash (used in) provided by financing activity - 742 ---------- ---------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 454,589 (799,248) Cash and cash equivalents, beginning 285,417 1,690,922 ---------- ---------- Cash and cash equivalents, ending $ 740,006 $ 891,674 ========== ========== Supplemental schedule of noncash investing and financing activities: The Fund has increased its investments for unpaid capital contributions due to the Operating Partnerships $ 1,984,974 $ - ========== ========== The accompanying notes are an integral part of these statements. 24 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Three Months Ended June 30, (Unaudited) Series 18 ------------------------- 1996 1995 ---- ---- Cash flows from operating activities: Net loss $(766,394) $ (456,264) Adjustments Distributions from Operating Partnerships 2,470 - Amortization 10,542 7,689 Share of loss from Operating Partnerships 664,669 387,516 Changes in assets and liabilities (Decrease) increase in accounts payable and accrued expenses - 2,432 Decrease (Increase) in accounts receivable 2,538 1,496,894 Decrease (Increase) in accounts payable affiliates 95,424 95,424 -------- ---------- Net cash provided by (used in) operating activities 9,249 1,533,691 -------- ---------- Cash flows from investing activities: Acquisiton costs repaid (paid) for Operating Partnerships acquiared or to acquire 2,465 (1,603) Capital contributions paid to Operating Partnerships (74,369) (4,140,986) Advances to Operating Partnerships - 178,595 Investments 453,810 918,744 -------- ---------- Net cash used in investing activities 381,906 (3,045,250) -------- ---------- 25 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Three Months Ended June 30, (Unaudited) Series 18 ----------------------- 1996 1995 ---- ---- 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 391,155 (1,511,559) Cash and cash equivalents, beginning 529,400 1,813,653 -------- ---------- Cash and cash equivalents, ending $ 920,555 $ 302,094 ======== ========== Supplemental schedule of noncash investing and financing activities: The Fund has increased its investments for unpaid capital contributions due to the Operating Partnerships $ - $ - ======== ========= The accompanying notes are an integral part of these statements. 26 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Three Months Ended June 30, (Unaudited) Series 19 ------------------------- 1996 1995 ---- ---- Cash flows from operating activities: Net loss $ (613,322) $ (476,114) Adjustments Distributions from Operating Partnerships - - Amortization 12,655 9,403 Share of loss from Operating Partnerships 579,494 403,751 Changes in assets and liabilities (Decrease) increase in accounts payable and accrued expenses 345 2,433 Decrease (Increase) in accounts receivable 15,896 3,868 Decrease (Increase) in accounts payable affiliates 91,785 105,453 ---------- ---------- Net cash provided by (used in) operating activities 86,853 48,794 ---------- ---------- Cash flows from investing activities: Acquisiton costs repaid (paid) for Operating Partnerships acquiared or to acquire 2,785 (4,210) Capital contributions paid to Operating Partnerships (1,872,886) (3,788,118) Advances to Operating Partnerships 1,566,875 (140,000) Investments 395,778 3,233,991 ---------- ---------- Net cash used in investing activities 92,552 (698,337) -------- --------- 27 Boston Capital Tax Credit Fund III L.P. STATEMENTS OF CASH FLOWS Three Months Ended June 30, (Unaudited) Series 19 ------------------------ 1996 1995 ---- ---- Continued - --------- Cash flows from financing activity: Sales and registration costs paid - - Credit adjusters received from Operating Partnerships - - ---------- ---------- Net cash (used in) provided by financing activity - - ---------- ---------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 179,405 (649,543) Cash and cash equivalents, beginning 2,551,124 2,942,151 ---------- ---------- Cash and cash equivalents, ending $ 2,730,529 $ 2,292,608 ========== ========== Supplemental schedule of noncash investing and financing activities: The Fund has increased its investments for unpaid capital contributions due to the Operating Partnerships $ - $ - ========== ========== The accompanying notes are an integral part of these statements. 28 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS June 30, 1996 (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 partnership issued the last BACs in Series 19 on December 17, 1993. This concluded the Public Offering of the Fund. 29 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED June 30, 1996 (Unaudited) NOTE B - ACCOUNTING AND FINANCIAL REPORTING POLICIES The condensed financial statements included herein as of June 30, 1996 and for the three months then ended have been prepared by the Fund, without audit. The Fund accounts for its investments in Operating Partnerships using the equity method, whereby the Fund adjusts its investment cost for its share of each Operating Partnership's results of operations and for any distributions received or accrued. Costs incurred by the Fund in acquiring the investments in the Operating Partnerships are capitalized to the investment account. The Fund's accounting and financial reporting policies are in conformity with generally accepted accounting principles and include adjustments in interim periods considered necessary for a fair presentation of the results of operations. Such adjustments are of a normal recurring nature. Investment Securities - --------------------- The Fund has determined that all of it's investment securities are to be categorized as securities available for sale. Securities classified as available for sale are those debt securities that the Fund purchased that may be liquidated prior to the maturity date should the need arise. These securities are carried at approximate fair market value. All of the investments held by the Fund are tax-exempt municipal bonds. The amortized cost of securities available for sale as of June 30, 1996 by contractual maturity are as follows: Amortized Cost ----------- Due in one year or less $3,421,187 Due after one year - --------- Total $3,421,187 ========= The fair market value of the securities is $3,431,304. The difference being an unrealized gain on securities available for sale of $10,117, as of June 30, 1996. 30 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED June 30, 1996 (Unaudited) NOTE - B ACCOUNTING AND FINANCIAL REPORTING POLICIES - CONTINUED Amortized cost is the face value of the securities and any unamortized premium or discount. The balance sheet reflects the fair market value under investments. Amortization - ------------ The Fund amortizes organizational costs over 60 months. As of June 30, 1996 and 1995 the Fund has accumulated organization amortization totalling $490,648 and $401,170 respectively. The breakdown of accumulated organization amortization within the Fund as of June 30, 1996 and 1995 is as follows: 1996 1995 ---- ---- Series 15 $147,403 $121,172 Series 16 149,806 105,176 Series 17 125,558 85,829 Series 18 77,704 46,949 Series 19 79,656 42,044 ------- ------- $580,127 $401,170 ======= ======= On July 1, 1995, the Fund began amortizing unallocated acquisiton costs over 330 months from April 1, 1995. As of June 30, 1996 the Fund has accumulated unallocated acquisition amortization totalling $84,639. The breakdown of accumulated unallocated acquisition amortization within the fund as of June 30, 1996 for Series 15, Series 16, Series 17, Series 18, and Series 19 is $13,239, $21,070, $19,566, $14,397 and $16,367, 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 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 June 30, 1996 all series had completed payment of all acquisition fees due to Boston Capital Partners, Inc. 31 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED June 30, 1996 (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 Communications Limited Partnership. The fund management fees accrued for the quarter ended June 30, 1996 and 1995 are as follows: 1996 1995 ---- ---- Series 15 $138,004 $126,883 Series 16 172,968 158,648 Series 17 148,230 134,847 Series 18 95,424 93,019 Series 19 91,785 105,453 ------- ------- $646,411 $618,850 ======= ======= NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS At June 30, 1996 and 1995, the Fund had limited partnership interests in 242 and 239 Operating Partnerships, respectively, which own or are constructing apartment complexes. The breakdown of Operating Partnerships within the Fund at June 30, 1996 and 1995 is as follows: 1996 1995 ---- ---- Series 15 68 68 Series 16 65 64 Series 17 49 48 Series 18 34 34 Series 19 26 25 --- --- 242 239 === === 32 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED June 30, 1996 (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, 1996 and 1995 are as follows: 1996 1995 ---- ---- Series 15 $ 189,312 $ 967,412 Series 16 329,879 2,549,122 Series 17 2,157,418 3,544,092 Series 18 812,411 3,302,209 Series 19 5,374,706 9,841,044 ---------- ---------- $ 8,863,726 $20,203,879 ========== ========== 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, 1996. 33 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED June 30, 1996 (Unaudited) NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued) COMBINED SUMMARIZED STATEMENTS OF OPERATIONS Three months ended March 31, (Unaudited) Series 15 --------------------------- 1996 1995 ---- ---- Revenues Rental $2,244,698 $2,071,181 Interest and other 117,134 152,873 --------- --------- 2,361,832 2,224,054 --------- --------- Expenses Interest 789,249 765,553 Depreciation and amortization 1,019,191 944,334 Operating expenses 1,376,981 1,296,756 --------- --------- $3,185,421 3,006,643 --------- --------- NET LOSS $ (823,589) $ (782,589) ========= ========= Net loss allocated to Boston Capital Tax Credit Fund III L.P. $ (800,082) $ (774,763) ========= ========= Net loss allocated to other partners $ (8,236) $ (7,826) ========= ========= Net loss suspended $ (15,271) $ - ========= ========= The Fund accounts for its investments using the equity method of accounting. Under the equity method of accounting, the partnership adjusts its investment cost for its share of each Operating Partnership's results of operations and for any distributions received or accrued. However, the Partnership recognizes individual operating losses only to the extent of capital contributions. Excess losses are suspended for use in future years to offset excess income. 34 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED June 30, 1996 (Unaudited) NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued) COMBINED SUMMARIZED STATEMENTS OF OPERATIONS Three months ended March 31, (Unaudited) Series 16 -------------------------- 1996 1995 ---- ---- Revenues Rental $2,971,994 $2,721,019 Interest and other 228,830 198,549 --------- --------- 3,200,824 2,919,568 --------- --------- Expenses Interest 1,088,390 947,781 Depreciation and amortization 1,291,126 1,262,450 Operating expenses 1,761,618 1,592,361 --------- --------- 4,141,134 3,802,592 --------- --------- NET LOSS $ (940,310) $ (883,024) ========= ========= Net loss allocated to Boston Capital Tax Credit Fund III L.P. $ (930,907) $ (874,194) ========= ========= Net loss allocated to other partners $ (9,403) $ (8,830) ========= ========= 35 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED June 30, 1996 (Unaudited) NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued) COMBINED SUMMARIZED STATEMENTS OF OPERATIONS Three Months ended March 31, (Unaudited) Series 17 -------------------------- 1996 1995 Revenues ---- ---- Rental $2,671,852 $2,304,402 Interest and other 92,198 261,537 --------- --------- 2,764,050 2,565,939 --------- --------- Expenses Interest 1,126,590 1,051,962 Depreciation and amortization 955,759 822,382 Operating expenses 1,576,946 1,454,755 --------- --------- 3,659,295 3,329,099 --------- --------- NET LOSS $ (895,245) $ (763,160) ========= ========= Net loss allocated to Boston Capital Tax Credit Fund III L.P. $ (886,292) $ (755,529) ========= ========= Net loss allocated to other partners $ (8,953) $ (7,631) ========= ========= 36 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED June 30, 1996 (Unaudited) NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued) COMBINED SUMMARIZED STATEMENTS OF OPERATIONS Three months ended March 31, (Unaudited) Series 18 ---------------------------- 1996 1995 Revenues ---- ---- Rental $1,426,154 $1,009,808 Interest and other 54,444 71,326 --------- --------- 1,480,598 1,081,134 --------- --------- Expenses Interest 531,238 281,197 Depreciation and amortization 669,337 604,503 Operating expenses 951,406 586,864 --------- --------- 2,151,981 1,472,564 --------- --------- NET LOSS $ (671,383) $ (391,430) ========= ========= Net loss allocated to Boston Capital Tax Credut Fund III L.P. $ (664,669) $ (387,516) ========= ========= Net loss allocated to other partners $ (6,714) $ (3,914) ========= ========= 37 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED June 30, 1996 (Unaudited) NOTE D - INVESTMENTS IN OPERATING PARTNERSHIPS (continued) COMBINED SUMMARIZED STATEMENTS OF OPERATIONS Three months ended March 31, (Unaudited) Series 19 -------------------------- 1996 1995 Revenues ---- ---- Rental $1,923,243 $ 614,555 Interest and other 52,937 26,157 --------- --------- 1,976,180 640,712 --------- --------- Expenses Interest 780,296 288,064 Depreciation and amortization 555,958 245,818 Operating expenses 1,225,273 514,660 --------- --------- 2,561,527 1,048,542 --------- --------- NET LOSS $ (585,347) $(407,830) ========= ======== Net loss allocated to Boston Capital Tax Credit Fund III L.P. $ (579,494) $(403,751) ========= ======== Net loss allocated to other partners $ (5,853) $ (4,079) ========= ======== 38 Boston Capital Tax Credit Fund III L.P. NOTES TO FINANCIAL STATEMENTS - CONTINUED June 30, 1996 (Unaudited) NOTE D - INVESTMENT IN OPERATING PARTNERSHIPS-CONTINUED When comparing the results of operations from the operating partnerships for the three months ended March 31, 1996 and March 31, 1995 numerous variances, some material innature, exist. The variances are the result of a number of factors including an increase in the number of Operating Partnerships owned, an increase in the number which have completed construction, and an increase in the number which have completed the lease-up phase. Smaller variances are anticipated in future years as the Fund becomes fully acquired and Operating Partnerships experience stabilized operations. NOTE E - TAXABLE LOSS The Fund's taxable loss for the fiscal year ended March 31, 1997 is expected to differ from its loss for financial reporting purposes primarily due to accounting differences in depreciation incurred by the Operating Partnerships. No provision or benefit for income taxes has been included in these financial statements since taxable income or loss passes through to, and is reportable by, the partners and assignees individually. 39 Item 2. Management's Discussions and Analysis of Financial Condition and Results of Operations Liquidity - --------- The Fund's primary source of funds is the proceeds of its Public Offering. Other sources of liquidity will include (i) interest earned on capital contributions held pending investment and on Working Capital Reserves and (ii) cash distributions from operations of the operating Partnerships in which the Fund has and will invest. Interest income is expected to decrease over the life of the Fund as capital contributions are paid to the Operating Partnerships and Working Capital Reserves are expended. The Fund does not anticipate significant cash distributions from operations of the Operating Partnerships. The Fund is currently accruing the fund management fee. Pursuant to the Partnership Agreement, such liabilities will be deferred until the Fund receives sales of refinancing proceeds from Operating Partnerships which will be used to satisfy such liabilities. The Fund's working capital and sources of liquidity coupled with affiliated party liability accruals allow sufficient levels of liquidity to meet the third party obligations of the Fund. The Fund is currently unaware of any trends which would create insufficient liquidity to meet future third party obligations. Capital Resources - ----------------- The Fund offered BACs in a Public Offering declared effective by the Securities and Exchange Commission on January 24, 1992. The Fund received $38,705,000, $54,293,000, $50,000,000, $36,162,000 and $40,800,000 representing 3,870,500, 5,429,402, 5,000,000, 3,616,200 and 4,080,000 BACs from investors admitted as BAC Holders in Series 15, Series 16, Series 17, Series 18, and Series 19, respectively. The Public Offering was completed on December 17, 1993. (Series 15) The Fund commenced offering BACs in Series 15 on January 24, 1992. Offers and sales of BACs in Series 15 were completed on June 26, 1992. The Fund has committed proceeds to pay initial and additional installments of capital contributions to 68 Operating Partnerships in the amount of $28,256,434. During the quarter ended June 30, 1996, $31,920 of Series 15 net offering proceeds had been used to pay capital contributions. Series 15 net offering proceeds in the amount of $189,312 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, 1996. (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 65 Operating Partnerships in the amount of $39,612,278. 40 During the quarter ended June 30, 1996, $570,602 of Series 16 net offering proceeds had been used to pay capital contributions. Series 16 net offering proceeds in the amount of $329,879 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, 1996. (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 $36,543,773. During the quarter ended June 30, 1996, $150,370 of Series 17 net offering proceeds had been used to pay capital contributions. Series 17 net offering proceeds in the amount of $740,006 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, 1996. (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 $26,416,739. During the quarter ended June 30, 1996 $574,369 of Series 18 net offering proceeds had been used to pay capital contributions. Series 18 net offering proceeds in the amount of $812,411 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, 1996. (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 $29,403,044. During the quarter ended June 30, 1996 $1,872,886 of Series 19 net offering proceeds had been used to pay capital contributions. Series 19 net offering proceedsin the amount of $5,374,706 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, 1996. Results of Operations - --------------------- As of June 30, 1996 and 1995 the Fund held limited partnership interests in 242 and 239 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 41 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 Partnerbelieves 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, 1996 as one series continues to use the funds raised to invest in partnership interests of additional Operating Partnerships. 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 construction and/or lease-up phases. The Fund incurred a fund management fee to 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 or payable by the Operating Partnerships. The fund management fees incurred for the quarter ended June 30, 1996 for Series 15, Series 16, Series 17, Series 18 and Series 19 were $134,135, $164,995, $132,847, $96,396, and $105,453, respectively. The Fund's investment objectives do not include receipt of significant cash distributions from the Operating Partnerships in which it has invested or intends to invest. The Fund's investments in Operating Partnerships have been and will be made principally with a view towards realization of Federal Housing Tax Credits for allocation to its partners and BAC holders. (Series 15) As of June 30, 1996 and 1995, the average qualified occupancy for the series was 99.2% and 97.8%, respectively. The series had a total of 68 properties at June 30, 1996. Out of the total 67 were at 100% qualified occupancy. For the three months being reported Series 15 reflects a net loss from Operating Partnerships of $800,082. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $219,109. This is an interim period estimate; it is not necessarily indicative of the final year end results. (Series 16) As of June 30, 1996 and 1995, the average qualified occupancy for the series was 100% and 99.6%, respectively. The series had a total of 65 properties at June 30, 1996 all of which were at 100% qualified occupancy. For the three months being reported Series 16 reflects a net loss from Operating Partnerships of $940,310. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $360,219. This is an interim period estimate; it is not necessarily indicative of the final year end results. 42 (Series 17) As of June 30, 1996 and 1995, the average qualified occupancy for the series was 99.6% and 98.5%, respectively. The series had a total of 49 properties at June 30, 1996. Out of the total 47 had 100% qualified occupancy. For the three months being reported Series 17 reflects a net loss from Operating Partnerships of $886,292. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $69,467. This is an interim period estimate; it is not necessarily indicative of the final year end results. (Series 18) As of June 30, 1996 and 1995 the average qualified occupancy for the series was 100% and 95.4% respectively. The series had a total of 34 properties at June 30, 1996 all of which were at 100% qualified occupancy. For the three months being reported Series 18 reflects a net loss from Operating Partnerships of $664,669. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect positive operations of $4,688. This is an interim period estimate; it is not necessarily indicative of the final year end results. (Series 19) As of June 30, 1996 and 1995 the average qualified occupancy for the series was 98.3% and 86.7% respectively. The series had a total of 26 properties at June 30, 1996. Out of the total 23 had 100% qualified occupancy and 2 were in initial lease-up. The series also had 1 property that was still under construciton at June 30, 1996. For the three months being reported Series 19 reflects a net loss from Operating Partnerships of $585,347. When adjusted for depreciation, which is a non-cash item, the Operating Partnerships reflect a net loss of $29,389. This is an interim period estimate; it is not necessarily indicative of the final year end results. 43 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 None 44 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BOSTON CAPITAL TAX CREDIT FUND III L.P. By: Boston Capital Associates III L.P. By: C&M Associates d/b/a Boston Capital Associates Date: August 13, 1996 By: /s/ John P. Manning ------------------- John P. Manning, Partner & Principal Financial Officer 45