UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
---
For the quarterly period ended December 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: 0-19217
American Tax Credit Properties III L.P.
(Exact name of Registrant as specified in its charter)
Delaware
13-3545006
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Richman Tax Credit Properties III L.P.
599 West Putnam Avenue, 3rd Floor
Greenwich, Connecticut
06830
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 869-0900
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 filing requirements
for the past 90 days.
Yes X No ___.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Table of Contents
Balance Sheets as of December 30, 1996 (Unaudited) and March 30, 1996
(Unaudited)
Statements of Operations for the three and nine month periods ended
December 30, 1996 (Unaudited)and December 30, 1995 (Unaudited)
Statements of Cash Flows for the nine months ended December 30, 1996 (Unaudited)
and December 30, 1995 (Unaudited)
Notes to Financial Statements as of December 30, 1996 (Unaudited)
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
BALANCE SHEETS
DECEMBER 30, 1996 AND MARCH 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
December 30, March 30,
Notes 1996 1996
----- ----------------------------------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 385,461 $ 389,931
Restricted cash 3 1,301,227 1,102,327
Investments in bonds available-for-sale 2 2,932,798 3,070,375
Investment in local partnerships 3 11,406,727 13,241,594
Interest receivable 34,516 28,008
------------------ ------------------
$ 16,060,729 $ 17,832,235
============== ==============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses $ 806,318 $ 717,878
Payable to general partner 767,403 669,472
Capital contributions payable 3 1,301,227 1,102,327
Other 21,200 25,950
------------------ ------------------
2,896,148 2,515,627
---------------- ----------------
Partners' equity (deficit)
General partner (182,789) (161,180)
Limited partners (35,883 units of limited partnership interest
outstanding) 13,433,606 15,572,895
Unrealized loss on investments in bonds available-for-sale, net 2 (86,236) (95,107)
----------------- -----------------
13,164,581 15,316,608
--------------- ---------------
$ 16,060,729 $ 17,832,235
============== ==============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF OPERATIONS
THREE AND NINE MONTH PERIODS ENDED DECEMBER 30, 1996 AND 1995
(UNAUDITED)
Three Months Nine Months Three Months Nine Months
Ended December Ended December Ended December Ended December
30, 30, 30, 30,
Notes 1996 1996 1995 1995
----- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REVENUE
Interest $ 79,701 $ 237,123 $ 78,796 $ 252,302
---------------- -------------- ---------------- --------------
TOTAL REVENUE 79,701 237,123 78,796 252,302
----------------- --------------- ----------------- ---------------
EXPENSES
Administration fees 57,646 172,931 57,645 172,931
Management fees 57,646 172,931 57,645 172,931
Professional fees 13,911 27,760 14,435 35,857
Printing, postage and other 2,975 14,141 1,923 12,421
Amortization 3,125
-------------------------------------------------------------------------
TOTAL EXPENSES 132,178 387,763 131,648 397,265
--------------- ---------------- --------------- ----------------
Loss from operations (52,477) (150,640) (52,852) (144,963)
Equity in loss of investment in local
partnerships 3 (601,022) (2,010,258) (731,406) (2,333,213)
--------------- --------------- --------------- ---------------
NET LOSS $ (653,499) $ (2,160,898) $ (784,258) $ (2,478,176)
============== ============= ============== =============
NET LOSS ATTRIBUTABLE TO
General partner $ (6,535) $ (21,609) $ (7,843) $ (24,782)
Limited partners (646,964) (2,139,289) (776,415) (2,453,394)
--------------- -------------- --------------- ---------------
$ (653,499) $ (2,160,898) $ (784,258) $ (2,478,176)
============== ============= ============== =============
NET LOSS per unit of limited partnership
interest (35,883 units of limited
partnership interest) $ (18.03) $ (59.62) $ (21.64) $ (68.37)
================ ================ ================ ================
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED DECEMBER 30, 1996 AND 1995
(UNAUDITED)
1996 1995
------------------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received $ 177,063 $ 186,771
Cash used for local partnerships for deferred expenses (4,750) (4,750)
Cash paid for
administration fees (75,000) (75,000)
management fees (75,000) (75,000)
professional fees (40,999) (41,357)
printing, postage and other expenses (10,393) (9,900)
---------------- -----------------
Net cash used in operating activities (29,079) (19,236)
---------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Maturity/redemption of bonds 200,000
Cash distributions from local partnerships 23,509 17,414
Transfer from (to) restricted cash (198,900) 300,000
Investment in a local partnership (300,000)
---------------------- ---------------
Net cash provided by investing activities 24,609 17,414
---------------- -----------------
Net decrease in cash and cash equivalents (4,470) (1,822)
Cash and cash equivalents at beginning of period 389,931 663,905
---------------- ----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 385,461 $ 662,083
=============== ===============
SIGNIFICANT NON-CASH INVESTING ACTIVITIES
Unrealized gain on investments in bonds available-for-sale, net $ 8,871 $ 287,263
================= ===============
Increase in capital contributions payable $ 198,900
===============
- ------------------------------------------------------------------------------------------------------------------------------------
See reconciliation of net loss to net cash used in operating activities
on page 6.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF CASH FLOWS - (Continued)
NINE MONTHS ENDED DECEMBER 30, 1996 AND 1995
(UNAUDITED)
1996 1995
-------------------- ------------
<S> <C> <C>
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES
Net loss $ (2,160,898) $ (2,478,176)
Adjustments to reconcile net loss to net cash used in operating activities
Equity in loss of investment in local partnerships 2,010,258 2,333,213
Amortization of organization costs 3,125
Amortization of net premium on investments in bonds 12,639 13,980
Accretion of zero coupon bonds (66,191) (63,982)
Increase in interest receivable (6,508) (15,529)
Increase in payable to general partner 97,931 97,931
Increase in accounts payable and accrued expenses 88,440 94,952
Decrease in other liabilities (4,750) (4,750)
------------------ ------------------
NET CASH USED IN OPERATING ACTIVITIES $ (29,079) $ (19,236)
================ ================
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 1996
(UNAUDITED)
1. Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information. They do not include all information and footnotes
required by generally accepted accounting principles for complete financial
statements. The results of operations are impacted significantly by the
combined results of operations of the Local Partnerships, which are
provided by the Local Partnerships on an unaudited basis during interim
periods. Accordingly, the accompanying financial statements are dependent
on such unaudited information. In the opinion of the General Partner, the
financial statements include all adjustments necessary to present fairly
the financial position as of December 30, 1996 and the results of
operations and cash flows for the interim periods presented. All
adjustments are of a normal recurring nature. The results of operations for
the three and nine month periods ended December 30, 1996 are not
necessarily indicative of the results that may be expected for the entire
year.
Certain reclassifications of amounts have been made to conform to the
current period presentation.
2. Investments in Bonds Available-For-Sale
As of December 30, 1996, certain information concerning investments in
bonds available-for-sale is as follows:
<S> <C> <C> <C> <C>
Gross unrealized Gross
Amortized gains unrealized Estimated
Description and maturity cost losses fair value
Corporate debt securities
Within one year $ 77,545 $ -- $ (1,115) $ 76,430
After one year through five years 383,321 3,535 (22) 386,834
After five years through ten years 506,713 215 (11,896) 495,032
After ten years 1,010,135 4,945 (36,278) 978,802
------------ ------------- ------------ -------------
1,977,714 8,695 (49,311) 1,937,098
------------ ------------- ------------ ------------
U.S. Treasury debt securities
After ten years 915,460 -- (35,459) 880,001
------------- ---------------- ------------ -------------
U.S. government and agency securities
After ten years 125,860 -- (10,161) 115,699
------------- ---------------- ------------ -------------
$ 3,019,034 $ 8,695 $ (94,931) $ 2,932,798
=========== ============= =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
DECEMBER 30, 1996
(UNAUDITED)
3. Investment in Local Partnerships
The Partnership owns limited partnership interests in forty-three Local
Partnerships representing capital contributions in the aggregate amount of
$29,256,495, of which the Partnership has paid $27,955,268 and $1,301,227
is outstanding as of December 30, 1996. Restricted cash in the accompanying
balance sheet as of December 30, 1996 includes such outstanding capital
contributions, which are payable upon two Local Partnerships' satisfaction
of specified conditions related to operations. As of September 30, 1996,
the Local Partnerships have outstanding mortgage and construction loans
payable totaling approximately $87,430,000 and accrued interest payable on
such loans totaling approximately $1,712,000, which are secured by security
interests and liens common to mortgage and construction loans on the Local
Partnerships' real property and other assets.
For the nine months ended December 30, 1996, the investment in Local
Partnerships activity consists of the following:
<S> <C> <C>
Investment in Local Partnerships as of March 30, 1996 $ 13,241,594
Investment in a Local Partnership during the nine months
ended December 30, 1996 198,900
Equity in loss of investment in Local Partnerships for the
three months ended
March 31, 1996 $ (837,905)
June 30, 1996 (571,331)
September 30, 1996 (601,022) (2,010,258) (A)
-----------
Cash distributions received from Local Partnerships during the
nine months ended December 30, 1996 (23,509)
---------------
Investment in Local Partnerships as of December 30, 1996 $ 11,406,727
============
(A) Equity in loss of investment in Local Partnerships is limited to the
Partnership's investment balance in each Local Partnership; any excess
is applied to other partners' capital in any such Local Partnership.
The amount of such excess losses applied to other partners' capital
for the three and nine month periods ended September 30, 1996 was
$91,556 and $350,502, respectively, as reflected in the combined
statements of operations of the Local Partnerships reflected herein
Note 3.
The combined unaudited balance sheets of the Local Partnerships as of
September 30, 1996 and December 31, 1995 and the combined unaudited
statements of operations of the Local Partnerships for the three and nine
month periods ended September 30, 1996 and 1995 are reflected on pages 9
and 10, respectively.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
DECEMBER 30, 1996
(UNAUDITED)
3. Investment in Local Partnerships (continued)
The combined balance sheets of the Local Partnerships as of September 30,
1996 and December 31, 1995 are as follows:
September 30, December 31,
1996 1995
------------------ ------------
<S> <C> <C> <C>
ASSETS
Cash and other investments $ 1,244,420 $ 1,392,146
Rental receivable 309,208 310,169
Capital contributions receivable 1,102,327 1,102,327
Escrow deposits and reserves 3,944,313 3,403,860
Land 3,964,692 3,964,692
Buildings and improvements (net of accumulated
depreciation of $22,206,599 and $19,100,770) 93,357,969 96,409,439
Intangible assets (net of accumulated amortization of
$1,013,403 and $948,812) 766,503 854,837
Other 708,449 747,972
---------------- ----------------
$ 105,397,881 $ 108,185,442
============= =============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses $ 697,280 $ 608,574
Due to related parties 5,129,816 5,363,967
Mortgage and construction loans 87,429,901 87,656,301
Notes payable 30,709 38,848
Accrued interest 1,711,540 1,524,375
Other 574,444 584,408
---------------- ----------------
95,573,690 95,776,473
-------------- --------------
Partners' equity (deficit) American Tax Credit Properties III L.P.
Capital contributions, net of distributions
(includes receivable of $1,102,327) 28,872,724 28,908,501
Cumulative loss (17,664,897) (15,654,639)
------------- -------------
11,207,827 13,253,862
-------------- --------------
General partners and other limited partners, including ATCP II
Capital contributions, net of distributions 803,070 791,395
Cumulative loss (2,186,706) (1,636,288)
--------------- ---------------
(1,383,636) (844,893)
--------------- ----------------
9,824,191 12,408,969
--------------- ---------------
$ 105,397,881 $ 108,185,442
============= =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
DECEMBER 30, 1996
(UNAUDITED)
3. Investment in Local Partnerships (continued)
The combined statements of operations of the Local Partnerships for the
three and nine month periods ended September 30, 1996 and 1995 are as
follows:
Three Months Nine Months Three Months Nine Months Ended
Ended September Ended September Ended September September 30,
30, 30, 30,
1996 1996 1995 1995
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUE
Rental $ 2,579,221 $ 7,709,936 $ 2,488,054 $ 7,503,231
Interest and other 55,980 235,821 75,643 213,976
--------------- --------------- ---------------- ---------------
TOTAL REVENUE 2,635,201 7,945,757 2,563,697 7,717,207
------------- -------------- -------------- --------------
EXPENSES
Administrative 491,257 1,520,155 496,016 1,526,928
Utilities 176,214 762,780 217,062 735,866
Operating, maintenance and other 473,663 1,489,338 460,711 1,472,156
Taxes and insurance 337,661 967,868 305,392 897,711
Interest (including amortization of
$18,936, $89,229, $49,052 and $148,334)
871,083 2,660,463 850,289 2,566,067
Depreciation 1,041,892 3,105,829 1,051,171 3,117,460
------------- -------------- -------------- --------------
TOTAL EXPENSES 3,391,770 10,506,433 3,380,641 10,316,188
------------- ------------- -------------- -------------
NET LOSS $ (756,569) $ (2,560,676) $ (816,944) $ (2,598,981)
============= ============= ============= =============
NET LOSS ATTRIBUTABLE TO
American Tax Credit Properties III L.P. $ (601,022) $ (2,010,258) $ (731,406) $ (2,333,213)
General partners and other limited
partners, including ATCP II, which
includes $91,556, $350,502, $25,081
and $78,619 of American Tax Credit
Properties III L.P. loss in excess
of investment (155,547) (550,418) (85,538) (265,768)
-------------- --------------- --------------- ---------------
$ (756,569) $ (2,560,676) $ (816,944) $ (2,598,981)
============= ============= ============= =============
</TABLE>
The combined results of operations of the Local Partnerships for the three
and nine month periods ended September 30, 1996 are not necessarily
indicative of the results that may be expected for an entire operating
period.
4. Additional Information
Additional information, including the audited March 30, 1996 Financial
Statements and the Organization, Purpose and Summary of Significant
Accounting Policies, is included in the Partnership's Annual Report on Form
10-K for the fiscal year ended March 30, 1996 on file with the Securities
and Exchange Commission.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Material Changes in Financial Condition
As of December 30, 1996, Registrant has not experienced a significant change in
financial condition as compared to March 30, 1996. Principal changes in assets
are comprised of periodic transactions and adjustments and anticipated equity in
loss from operations of the Local Partnerships. During the nine months ended
December 30, 1996, Registrant received cash from interest earnings and
distributions from Local Partnerships and utilized cash for operating expenses.
During the nine months ended December 30, 1996, Registrant recorded a net
unrealized gain on bonds available-for-sale of approximately $9,000, resulting
in a net unrealized loss of approximately $86,000 reflected in Registrant's
partners' equity (deficit) as of December 30, 1996. In addition, during the nine
months ended December 30, 1996, Registrant recorded accretion of zero coupon
bonds of approximately $66,000 which was partially offset by amortization of net
premium on investments in bonds of approximately $13,000. In addition, during
the nine months ended December 30, 1996, Registrant received $200,000 from the
maturity of investments in bonds held for working capital purposes. During the
nine months ended December 30, 1996, the investment in Local Partnerships
decreased as a result of Registrant's equity in the Local Partnerships' net loss
for the nine months ended September 30, 1996 of $2,010,258 and cash
distributions received from Local Partnerships of $23,509, partially offset by
an increase in investment in a Local Partnership of $198,900.
The Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States and
Puerto Rico. The rents of the Properties, many of which receive rental subsidy
payments, including payments under Section 8 of Title II of the Housing and
Community Development Act of 1974 ("Section 8"), are subject to specific laws,
regulations and agreements with federal and state agencies. The subsidy
agreements expire at various times during and after the Compliance Periods of
the Local Partnerships. Registrant cannot reasonably predict legislative
initiatives and governmental budget negotiations, the outcome of which could
result in a reduction in funds available for the various federal and state
administered housing programs including the Section 8 program. Such changes
could adversely affect the future net operating income and debt structure of any
or all Local Partnerships currently receiving such subsidy or similar subsidies.
In addition, the Local Partnerships have various financing structures which
include (i) required debt service payments ("Mandatory Debt Service") and (ii)
debt service payments which are payable only from available cash flow subject to
the terms and conditions of the notes, which may be subject to specific laws,
regulations and agreements with appropriate federal and state agencies
("Non-Mandatory Debt Service or Interest"). In the event rents are not
sufficient to cover operating expenses, Mandatory Debt Service requirements and
other charges, the Local General Partners are obligated to provide advances to
cover deficits for a certain period of time up to certain amounts (the "Deficit
Guarantee"). A Local General Partner's funding of such Deficit Guarantee is
dependent on its liquidity or ability to borrow the required funds. During the
nine months ended September 30, 1996, revenue from operations, Local General
Partner advances and reserves of the Local Partnerships have generally been
sufficient to cover the operating expenses and Mandatory Debt Service.
Substantially all of the Local Partnerships are effectively operating at or near
break even levels, although certain Local Partnerships' accounting information
reflects operating deficits that do not represent cash deficits due to their
mortgage and financing structure and the required deferral of property
management fees. However, as discussed below, certain Local Partnerships'
operating information indicates below break even operations after taking into
account their mortgage and financing structure and the required deferral of
property management fees.
The terms of the partnership agreement of Justin Associates (the "Justin Local
Partnership") require the Local General Partners of the Justin Local Partnership
to advance funds to cover operating deficits up to $266,000 through March, 1997
and to cause the management agent to defer property management fees in order to
avoid a default under the mortgage. The Justin Local Partnership incurred an
operating deficit of approximately $18,000 for the nine months ended September
30, 1996, which includes property management fees of approximately $13,000.
Accordingly, the net operating deficit was approximately $5,000. As of September
30, 1996, the Local General Partners of the Justin Local Partnership have
advanced approximately $38,000 under their Deficit Guarantee obligation. Of
Registrant's total annual Low-income Tax Credits, approximately 6.44% is
allocated from the Justin Local Partnership.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
The terms of the partnership agreement of Christian Street Commons Associates
(the "Christian Street Local Partnership") require the Local General Partners of
the Christian Street Local Partnership to advance funds to cover operating
deficits up to $150,000 through 2008 and to cause the management agent to defer
property management fees in order to avoid a default under the mortgage. The
Christian Street Local Partnership incurred an operating deficit of
approximately $16,000 for the nine months ended September 30, 1996, which
includes property management fees of approximately $3,000. Accordingly, the net
operating deficit was approximately $13,000. As of September 30, 1996, the Local
General Partners of the Christian Street Local Partnership have advanced
approximately $40,000 under their Deficit Guarantee obligation. Of Registrant's
total annual Low-income Tax Credits, approximately 2.08% is allocated from the
Christian Street Local Partnership.
The terms of the partnership agreement of Ellinwood Heights Apartments, L.P.
(the "Ellinwood Heights Local Partnership") require the Local General Partners
of the Ellinwood Heights Local Partnership to advance funds to cover operating
deficits up to $70,000 through 1996 and to cause the management agent to defer
property management fees in order to avoid a default under the mortgage. The
Ellinwood Heights Local Partnership incurred an operating deficit of
approximately $16,000 for the nine months ended September 30, 1996, which
includes property management fees of approximately $12,000. Accordingly, the net
operating deficit was approximately $4,000. Of Registrant's total annual
Low-income Tax Credits, approximately .6% is allocated from the Ellinwood
Heights Local Partnership.
The Local General Partners of Sydney Engel Associates (the "Sydney Engel Local
Partnership"), (of which one is an affiliate of the general partner of
Registrant and owns a one-fourth minority general partner interest), report that
the Sydney Engel Local Partnership is anticipating closing on its permanent
mortgages with the City of New York. Upon closing, Registrant will pay the
Sydney Engel Local Partnership its outstanding capital contribution of
approximately $1,216,900, which includes an additional capital contribution of
approximately $198,900 (included in investment in Local Partnerships and capital
contributions payable in Registrant's balance sheet as of December 30, 1996),
which reflects the interest earned by Registrant on the original outstanding
capital contribution pending closing of the mortgages. Registrant has continued
to receive the full Low-income Tax Credits from the Sydney Engel Local
Partnership as generally anticipated. The Local General Partners of the Sydney
Engel Local Partnership have utilized the additional time to negotiate more
favorable terms on the anticipated permanent mortgages than those included in
the original commitment.
Results of Operations
Registrant's operating results are dependent upon the operating results of the
Local Partnerships and are significantly impacted by the Local Partnerships'
policies. In addition, the operating results herein are not necessarily the same
for tax reporting. Registrant accounts for its investment in Local Partnerships
in accordance with the equity method of accounting and Emerging Issues Task
Force ("EITF") Issue No. 94-1, "Accounting for Tax Benefits Resulting from
Investments in Affordable Housing Projects." Under the equity method of
accounting and in accordance with EITF Issue No. 94-1, the investment is carried
at cost which includes capital contributions payable, and is adjusted for
Registrant's share of the Local Partnership's results of operations and by any
cash distributions received. Equity in loss of each investment in Local
Partnership allocated to Registrant is recognized to the extent of Registrant's
investment balance in each Local Partnership. Any equity in loss in excess of
Registrant's investment balance in a Local Partnership is allocated to other
partners' capital in each such Local Partnership. As a result, the equity in
loss of investment in Local Partnerships is expected to decrease as Registrant's
investment balances in the respective Local Partnerships become zero.
Cumulative losses and cash distributions in excess of investment in Local
Partnerships may result from a variety of circumstances, including a Local
Partnership's accounting policies, subsidy structure, debt structure and
operating deficits, among other things. Accordingly, cumulative losses and cash
distributions in excess of the investment are not necessarily indicative of
adverse operating results of a Local Partnership. See discussion above under
Material Changes in Financial Condition regarding certain Local Partnerships
currently operating below economic break even levels.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
Three Months Ended December 30, 1996
For the three months ended December 30, 1996, Registrant had a net loss of
approximately $653,000, which included an equity in loss of investment in Local
Partnerships of approximately $601,000 for the three months ended September 30,
1996. Nonrecognition of losses in excess of Registrant's investment in certain
Local Partnerships during the period was approximately $92,000. Registrant's
loss from operations for the three months ended December 30, 1996 of
approximately $52,000 was attributable to interest revenue of approximately
$80,000, exceeded by operating expenses of approximately $132,000. Interest
revenue for future periods is expected to decline as investments in bonds mature
and are utilized for Registrant's operating expenses and Temporary Investments
are utilized to make payments of capital contributions to Local Partnerships.
The Local Partnerships' net loss of approximately $757,000 for the three months
ended September 30, 1996 was attributable to rental and other revenue of
approximately $2,635,000, exceeded by operating and interest expenses (including
Non-Mandatory Interest) of approximately $2,331,000 and approximately $1,061,000
of depreciation and amortization expenses.
Three Months Ended December 30, 1995
For the three months ended December 30, 1995, Registrant had a net loss of
approximately $784,000, which included an equity in loss of investment in Local
Partnerships of approximately $731,000 for the three months ended September 30,
1995. Nonrecognition of losses in excess of Registrant's investment in certain
Local Partnerships during the period was approximately $25,000. Registrant's
loss from operations for the three months ended December 30, 1995 of
approximately $53,000 was attributable to interest revenue of approximately
$79,000, exceeded by operating expenses of approximately $132,000.
The Local Partnerships' net loss of approximately $817,000 for the three months
ended September 30, 1995 was attributable to rental and other revenue of
approximately $2,564,000, exceeded by operating and interest expenses (including
Non-Mandatory Interest) of approximately $2,281,000 and approximately $1,100,000
of depreciation and amortization expenses.
Nine Months Ended December 30, 1996
For the nine months ended December 30, 1996, Registrant had a net loss of
approximately $2,161,000, which included an equity in loss of investment in
Local Partnerships of approximately $2,010,000 for the nine months ended
September 30, 1996. Nonrecognition of losses in excess of Registrant's
investment in certain Local Partnerships during the period was approximately
$350,000. Registrant's loss from operations for the nine months ended December
30, 1996 of approximately $151,000 was attributable to interest revenue of
approximately $237,000, exceeded by operating expenses of approximately
$388,000. Interest revenue for future periods is expected to decline as
investments in bonds mature and are utilized for Registrant's operating expenses
and Temporary Investments are utilized to make payments of capital contributions
to Local Partnerships.
The Local Partnerships' net loss of approximately $2,561,000 for the nine months
ended September 30, 1996 was attributable to rental and other revenue of
approximately $7,946,000, exceeded by operating and interest expenses (including
Non-Mandatory Interest) of approximately $7,312,000 and approximately $3,195,000
of depreciation and amortization expenses.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
Nine Months Ended December 30, 1995
For the nine months ended December 30, 1995, Registrant had a net loss of
approximately $2,478,000, which included an equity in loss of investment in
Local Partnerships of approximately $2,333,000 for the nine months ended
September 30, 1995. Nonrecognition of losses in excess of Registrant's
investment in certain Local Partnerships during the period was approximately
$79,000. Registrant's loss from operations for the nine months ended December
30, 1995 of approximately $145,000 was attributable to interest revenue of
approximately $252,000, exceeded by operating expenses of approximately $394,000
and amortization of organization costs of approximately $3,000.
The Local Partnerships' net loss of approximately $2,599,000 for the nine months
ended September 30, 1995 was attributable to rental and other revenue of
approximately $7,717,000, exceeded by operating and interest expenses (including
Non-Mandatory Interest) of approximately $7,050,000 and approximately $3,266,000
of depreciation and amortization expenses.
Three and Nine Month Periods Ended December 30, 1996 v.
Three and Nine Month Periods Ended December 30, 1995
Registrant's operations for the three months ended December 30, 1996 resulted in
a net loss of approximately $653,000 as compared to a net loss of approximately
$784,000 for the same period in 1995. The decrease in net loss is attributable
to a decrease in the equity in loss of investment in Local Partnerships of
approximately $130,000 which is primarily the result of an increase in the
nonrecognition of losses in excess of Registrant's investment in certain Local
Partnerships in accordance with the equity method of accounting of approximately
$66,000.
Registrant's operations for the nine months ended December 30, 1996 resulted in
a net loss of approximately $2,161,000 as compared to a net loss of
approximately $2,478,000 for the same period in 1995. The decrease in net loss
is primarily attributable to a decrease in the equity in loss of investment in
Local Partnerships of approximately $323,000 which is primarily the result of an
increase in the nonrecognition of losses in excess of Registrant's investment in
certain Local Partnerships in accordance with the equity method of accounting of
approximately $272,000.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
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
None
<PAGE>
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 thereunto duly authorized.
AMERICAN TAX CREDIT PROPERTIES III L.P.
(a Delaware limited partnership)
By: Richman Tax Credit Properties III L.P.,
General Partner
by: Richman Housing Credits Inc.,
general partner
Dated: February 13, 1997 /s/ Richard Paul Richman
----------------- ------------------------
Richard Paul Richman
President, Chief Executive
Officer and Director of the
general partner of the
General Partner
Dated: February 13, 1997 /s/ Neal Ludeke
Neal Ludeke
Vice President and
Treasurer of the general partner
of the General Partner
(Principal Financial and Accounting
Officer of Registrant)
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<LEGEND> This schedule contains summary financial information extracted from
the quarter ended December 30, 1996 Form 10Q Balance Sheets and Statements of
Operations and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
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<NAME> American Tax Credit Properties, III L.P.
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