10-K
Annual Report
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the fiscal year
ended March 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 For the
transition period from ______ to ____________
0-19217
(Commission File Number)
American Tax Credit Properties III L.P.
(Exact name of registrant as specified in its governing instruments)
Delaware 13-3545006
- ------------------------------- -------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
organization)
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
--------------
Securities registered pursuant to Section 12(b) of the Act:
None None
- -------------------- -------------------------------------------
(Title of each Class) (Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
- -------------------------------------------------------------------------------
(Title of Class)
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
requirement for the past 90 days. Yes X No
----- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in a definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
-----
Registrant has no voting stock.
Documents incorporated by reference:
Part I - pages 20 through 31 and 44 through 66 of the prospectus dated February
7, 1990, as supplemented by Supplement No. 1, Supplement No. 2, Supplement No.
3, Supplement No. 4, Supplement No. 5 and Supplement No. 6 dated June 6, 1990,
November 21, 1990, December 20, 1990, October 30, 1991, December 26, 1991 and
January 15, 1992, respectively, filed pursuant to Rule 424(b)(3) under the
Securities Act of 1933.
<PAGE>
PART I
Item 1. Business
Formation
American Tax Credit Properties III L.P. ("Registrant"), a Delaware limited
partnership, was formed on September 21, 1989 to invest primarily in leveraged
low-income multifamily residential complexes (the "Property" or "Properties")
which qualify for the low-income tax credit in accordance with Section 42 of the
Internal Revenue Code (the "Low-income Tax Credit"), through the acquisition of
limited partnership equity interests in partnerships (the "Local Partnership" or
"Local Partnerships") that are the owners of the Properties. Registrant
considers its activity to constitute a single industry segment.
Richman Tax Credit Properties III L.P. (the "General Partner"), a Delaware
limited partnership, was formed on September 21, 1989 to act as the general
partner of Registrant. The general partner of the General Partner is Richman
Housing Credits Inc. ("Richman Housing"), a Delaware corporation which is
wholly-owned by Richard Paul Richman. Richman Housing is an affiliate of The
Richman Group, Inc. ("Richman Group"), a Delaware corporation founded by Richard
Paul Richman in 1988.
The Amendment No. 2 to the Registration Statement on Form S-11 was filed with
the Securities and Exchange Commission (the "Commission") on February 1, 1990
pursuant to the Securities Act of 1933 under Registration Statement File No.
33-31390 and was declared effective on February 2, 1990. Reference is made to
the prospectus dated February 7, 1990, as supplemented by Supplement No. 1,
Supplement No. 2, Supplement No. 3, Supplement No. 4, Supplement No. 5 and
Supplement No. 6 dated June 6, 1990, November 21, 1990, December 20, 1990,
October 30, 1991, December 26, 1991 and January 15, 1992, respectively, filed
with the Commission pursuant to Rule 424(b)(3) under the Securities Act of 1933
(the "Prospectus"). Pursuant to Rule 12b-23 of the Commission's General Rules
and Regulations promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the description of Registrant's business set forth
under the heading "Investment Objectives and Policies" at pages 44 through 66 of
the Prospectus is incorporated herein by reference.
On March 12, 1990, Registrant commenced, through Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), the offering of up to 150,000 units of
limited partnership interest ("Unit") at $1,000 per Unit to investors. On June
13, 1990, December 27, 1990, December 31, 1991 and January 23, 1992 the closings
for 19,730, 9,622, 5,227 and 1,304 Units, respectively, took place, amounting to
aggregate limited partners' capital contributions of $35,883,000.
Competition
Pursuant to Rule 12b-23 of the Commission's General Rules and Regulations
promulgated under the Exchange Act, the description of Registrant's competition,
general risks, tax risks and partnership risks set forth under the heading "Risk
Factors" at pages 20 through 31 of the Prospectus is incorporated herein by
reference.
Employees
Registrant employs no personnel and incurs no payroll costs. All management
activities of Registrant are conducted by the General Partner. An affiliate of
the General Partner employs individuals who perform the management activities of
Registrant. This entity also performs similar services for other affiliates of
the General Partner.
Tax Reform Act of 1986, Revenue Act of 1987, Technical and Miscellaneous Revenue
Act of 1988, Omnibus Budget Reconciliation Act of 1989, Omnibus Budget
Reconciliation Act of 1990, Tax Extension Act of 1991, Omnibus Budget
Reconciliation Act of 1993, Uruguay Round Agreements Act and Taxpayer Relief Act
of 1997 (collectively the "Tax Acts")
Registrant is organized as a limited partnership and is a "pass through" tax
entity which does not, itself, pay federal income tax. However, the partners of
Registrant who are subject to federal income tax may be affected by the Tax
Acts. Registrant will consider the effect of certain aspects of the Tax Acts on
the partners when making decisions regarding its investments. Registrant does
not anticipate that the Tax Acts will currently have a material adverse impact
on Registrant's business operations, capital resources and plans or liquidity.
<PAGE>
Item 2. Properties
The executive offices of Registrant and the General Partner are located at 599
West Putnam Avenue, 3rd floor, Greenwich, Connecticut 06830. Registrant does not
own or lease any properties. Registrant pays no rent; all charges for leased
space are borne by an affiliate of the General Partner.
Registrant's primary objective is to provide Low-income Tax Credits to limited
partners generally over a ten year period. The relevant state tax credit agency
has allocated each of Registrant's Local Partnerships an amount of Low-income
Tax Credits, which are generally available for a ten year period from the year
the Property is placed in service. The required holding period of each Property,
in order to avoid Low-income Tax Credit recapture, is fifteen years from the
year in which the Low-income Tax Credits commence on the last building of the
Property (the "Compliance Period"). In addition, certain of the Local
Partnerships have entered into agreements with the relevant state tax credit
agencies whereby the Local Partnerships must maintain the low-income nature of
the Properties for a period which exceeds the Compliance Period, regardless of
any sale of the Properties by the Local Partnerships after the Compliance
Period. The Properties must satisfy various requirements including rent
restrictions and tenant income limitations (the "Low-income Tax Credit
Requirements") in order to maintain eligibility for the recognition of the
Low-income Tax Credit at all times during the Compliance Period. Once a Local
Partnership has become eligible for the Low-income Tax Credit, it may lose such
eligibility and suffer an event of recapture if its Property fails to remain in
compliance with the Low-income Tax Credit Requirements. Through December 31,
1998, none of the Local Partnerships have suffered an event of recapture of
Low-income Tax Credits.
Although Registrant generally owns a 98.9%-99% limited partnership interest
("Local Partnership Interest") in the Local Partnerships, Registrant and
American Tax Credit Properties II L.P. ("ATCP II"), a Delaware limited
partnership and an affiliate of Registrant, together, in the aggregate, own a
99% Local Partnership Interest in the following Local Partnerships:
<TABLE>
<CAPTION>
<S> <C> <C>
Registrant ATCP II
---------- -------
Batesville Family, L.P. 61.75% 37.25%
Bruce Housing Associates, L.P. 61.75 37.25
Carrington Limited Dividend Housing
Association Limited Partnership 65.95 33.05
Ivy Family, L.P. 61.75 37.25
Lawrence Road Properties, Ltd. 61.75 37.25
Mirador del Toa Limited Partnership 59.06 39.94
Purvis Heights Properties, L.P. 61.75 37.25
Queen Lane Investors 48.50 50.50
</TABLE>
Many of the Local Partnerships receive rental subsidy payments, including
payments under Section 8 of Title II of the Housing and Community Development
Act of 1974 ("Section 8") (see descriptions of subsidies on page 7). The subsidy
agreements expire at various times during and after the Compliance Periods of
the Local Partnerships. In October 1997, Congress passed the Multifamily
Assisted Housing and Reform and Affordability Act, whereby the United States
Department of Housing and Urban Development ("HUD") was given the authority to
renew certain project based Section 8 contracts expiring during HUD's fiscal
year 1998, where requested by an owner, for an additional one year term
generally at or below current rent levels, subject to certain guidelines. In
October 1998, HUD issued a directive related to project based Section 8
contracts expiring during HUD's fiscal year 1999 which defines owners'
notification responsibilities, advises owners of project based Section 8
properties of what their options are regarding the renewal of Section 8
contracts, provides guidance and procedures to owners, management agents,
contract administrators and HUD staff on renewing Section 8 contracts, provides
guidance on setting renewal rents and handling renewal rent increases and
provides the requirements and procedures for opting-out of a Section 8 project
based contract. 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. One Local
Partnership's Section 8 contracts are scheduled to expire in 1999.
<PAGE>
<TABLE>
<CAPTION>
Item 2. Properties (continued)
<S> <C> <C> <C> <C>
Mortgage
Name of Local Partnership Number loans payable as of Subsidy
Name of apartment complex of rental Capital December 31, (see
Apartment complex location units contribution 1998 footnotes)
- ------------------------------- --------- ------------ ----------------- -----------
April Gardens Apartments II
Limited Partnership
April Gardens Apartments
Las Piedras, Puerto Rico 48 $ 485,581 $ 2,000,362 (1b&d)
Ashland Park Apartments, L.P.
Ashland Park Apartments
Ashland, Nebraska 24 235,732 1,040,446 (1b&d)
Auburn Family, L.P.
Auburn Apartments
Louisville, Mississippi 16 95,412 470,555 (1b&d)
Batesville Family, L.P.
Westridge Apartments
Batesville, Mississippi 48 239,716 (2) 1,441,209 (1b)
Bay Springs Elderly, L.P.
Bay Springs Manor
Bay Springs, Mississippi 24 208,820 677,420 (1b&d)
Brisas del Mar Apartments
Limited Partnership
Brisas del Mar Apartments
Hatillo, Puerto Rico 66 668,172 2,658,737 (1b&d)
Bruce Housing Associates, L.P.
Bruce Family Apartments
Bruce, Mississippi 40 183,155 (2) 1,110,021 (1b&d)
Carrington Limited Dividend
Housing Association Limited
Partnership
Carrington Place
Farmington Hills, Michigan 100 2,174,720 (2) 3,440,212 (1c)
Chestnut Park Associates, L.P.
Chestnut Park Apartments
East Orange, New Jersey 59 4,204,576 5,189,118 (1a)
Chowan Senior Manor Associates
Limited Partnership
Azalea Garden Senior Manor
Apartments
Murfreesboro, North Carolina 33 278,405 1,263,410 (1b&d)
Christian Street Commons
Associates
Christian Street Commons
Apartments
Philadelphia, Pennsylvania 18 581,645 620,521 (1a&b)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Item 2. Properties (continued)
<S> <C> <C> <C> <C>
Mortgage
Name of Local Partnership Number loans payable as of Subsidy
Name of apartment complex of rental Capital December 31, (see
Apartment complex location units contribution 1998 footnotes)
- ------------------------------ --------- -------------- --------------------- ----------
Country View Apartments
Country View Apartments
Pembroke, Maine 16 $ 279,183 $ 939,775 (1b&d)
Desarrollos de Belen Limited
Partnership
Vista de Jagueyes II Apartments
Aguas Buenas, Puerto Rico 41 422,929 1,887,073 (1b&d)
Desarrollos de Emaus Limited
Partnership
Hucares II Apartments
Naguabo, Puerto Rico 72 631,404 3,205,734 (1b&d)
Ellinwood Heights Apartments, L.P.
Ellinwood Heights Apartments
Ellinwood, Kansas 24 156,261 689,658 (1b&d)
Fulton Street Houses Limited
Partnership
Fulton Street Townhouse
Apartments
New York, New York 35 1,948,081 3,869,930 (1a&b)
Hayes Run Limited Partnership
Mashburn Gap Apartments
Marshall, North Carolina 34 322,074 1,428,831 (1b&d)
Howard L. Miller Sallisaw
Apartments II, L.P.
Sallisaw II Apartments
Sallisaw, Oklahoma 24 130,158 616,935 (1b&d)
Hurlock Meadow Limited
Partnership
Hurlock Meadow Apartments
Hurlock, Maryland 30 284,218 1,273,910 (1b&d)
Ivy Family, L.P.
Ivy Apartments
Louisville, Mississippi 32 135,528 (2) 798,004 (1b&d)
Justin Associates
Locust Tower Apartments
Philadelphia, Pennsylvania 40 1,809,723 2,454,251 (1b&e)
LaBelle Commons, Ltd.
LaBelle Commons
LaBelle, Florida 32 253,580 1,015,893 (1b&d)
Lawrence Road Properties, Ltd.
Hillcrest Apartments
Newton, Mississippi 24 123,799 (2) 760,577 (1b&d)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Item 2. Properties (continued)
<S> <C> <C> <C> <C>
Mortgage
Name of Local Partnership Number loans payable as of Subsidy
Name of apartment complex of rental Capital December 31, (see
Apartment complex location units contribution 1998 footnotes)
- --------------------------------------- --------- ------------ ------------------- ----------
Loma Del Norte Limited
Partnership
Loma Del Norte Apartments
Anthony, New Mexico 40 $ 314,865 $ 1,440,903 (1b&d)
Long Reach Associates Limited
Partnership
Oak Ridge Apartments
Bath, Maine 30 448,922 1,482,023 (1b&d)
Mirador del Toa Limited
Partnership
Mirador del Toa Apartments
Toa Alta, Puerto Rico 48 284,847 (2) 1,887,322 (1b&d)
Moore Haven Commons, Ltd.
Moore Haven Commons
Moore Haven, Florida 28 213,402 930,338 (1b&d)
NP-89 Limited Dividend Housing
Association Limited Partnership
Newport Apartments
Clinton Township, Michigan 168 2,372,292 4,230,637 (1a,b&g)
Nash Hill Associates, Limited
Partnership
Nash Hill Place
Williamsburg, Massachusetts 28 302,575 1,472,616 (1b,d&f)
North Calhoun City, L.P.
North Calhoun City Apartments
Calhoun City, Mississippi 18 146,565 492,669 (1b&d)
Orange City Plaza, Limited
Partnership
Orange City Plaza Apartments
Orange City, Iowa 32 456,090 508,823 (1a)
Puerta del Mar Limited Partnership
Puerta del Mar Apartments
Hatillo, Puerto Rico 66 630,570 2,531,462 (1b&d)
Purvis Heights Properties, L.P.
Pineview Apartments
Purvis, Mississippi 40 191,512 (2) 1,149,032 (1b)
Queen Lane Investors
Queen's Row
Philadelphia, Pennsylvania 29 597,050 (2) 1,572,111 (1b&e)
Somerset Manor, Ltd.
Somerset Manor
Central City, Pennsylvania 24 208,465 899,846 (1b&d)
Sugar Cane Villas, Ltd.
Sugar Cane Villas
Pahokee, Florida 87 751,560 3,315,958 (1b&d)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Item 2. Properties (continued)
<S> <C> <C> <C> <C>
Mortgage
Name of Local Partnership Number loans payable as of Subsidy
Name of apartment complex of Capital December 31, (see
Apartment complex location rental Contribution 1998 footnotes)
- --------------------------------------- ------- -------------- ------------------- ----------
Summerfield Apartments Limited
Partnership
Summerfield Apartments
Charlotte, North Carolina 52 $ 1,088,667 $ 1,784,586 (1b)
Sydney Engel Associates L.P.
(formerly known as Sydney Engel
Associates)
The Castle
New York, New York 224 3,201,874 17,635,198 (1b)
Union Valley Associates Limited
Partnership
Union Valley Apartments
Union Township, Pennsylvania 36 371,589 1,450,664 (1b)
Walnut Grove Family, L.P.
Walnut Grove Apartments
Walnut Grove, Mississippi 24 191,695 848,821 (1b&d)
Waynesboro Apartments Limited
Partnership
Waynesboro Apartments
Waynesboro, Pennsylvania 36 360,859 1,486,904 (1b)
West Calhoun City, L.P.
West Calhoun City Apartments
Calhoun City, Mississippi 28 230,212 776,927 (1b&d)
Westminster Apartments Limited
Partnership
Westminster Apartments
Philadelphia, Pennsylvania 42 1,047,993 1,609,558 (1a&b)
----------- -----------
$ 29,264,476 $ 86,358,980
=========== ===========
</TABLE>
(1) Description of subsidies:
(a) Section 8 of Title II of the Housing and Community Development Act
of 1974 allows qualified low-income tenants to pay thirty percent
of their monthly income as rent with the balance paid by the
federal government.
(b) The Local Partnership's debt structure includes a principal or
interest payment subsidy.
(c) The Michigan State Housing Development Authority allows tenants,
who would otherwise pay more than 40% of their income for rent and
utilities, to receive rental subsidies.
(d) The Rural Housing Service (formerly the Farmers Home
Administration) of the United States Department of Agriculture
Rental Assistance Program allows qualified low-income tenants to
receive rental subsidies.
(e) The City of Philadelphia Housing Authority allows qualified
low-income tenants to receive rental certificates.
(f) The Commonwealth of Massachusetts participates in a rental
assistance program.
(g) The Local Partnership's Section 8 contracts are scheduled to
expire in 1999.
(2) Reflects amount attributable to Registrant only.
<PAGE>
Item 3. Legal Proceedings
Registrant is not aware of any material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of the limited partners of Registrant
during the fourth quarter of the fiscal year covered by this report.
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity
and Related Security Holder Matters
Market Information and Holders
There is no established public trading market for Registrant's Units.
Accordingly, accurate information as to the market value of a Unit at any given
date is not available. The number of owners of Units as of May 5, 1999 was
1,624, holding 35,883 Units.
Merrill Lynch follows internal guidelines for providing estimated values of
limited partnerships and other direct investments reported on client account
statements. Pursuant to such guidelines, estimated values for limited
partnership interests reported on Merrill Lynch client account statements (such
as Registrant's Units) are provided to Merrill Lynch by independent valuation
services. These estimated values are based on financial and other information
available to the independent services (1) on the prior August 15th for reporting
on December year-end and subsequent client account statements through the
following May's month-end client account statements and (2) on March 31st for
reporting on June month-end and subsequent client account statements through the
November month-end client account statements of the same year. In addition,
Registrant may provide an estimate of value to Unit holders from time to time in
Registrant's reports to limited partners. The estimated values provided by the
independent services and Registrant, which may differ, are not market values and
Unit holders may not be able to sell their Units or realize either amount upon a
sale of their Units. In addition, Unit holders may not realize such estimated
values upon the liquidation of Registrant.
Distributions
Registrant owns a limited partnership interest in Local Partnerships that are
the owners of Properties which are leveraged and receive government assistance
in various forms of rental and debt service subsidies. The distribution of cash
flow generated by the Local Partnerships may be restricted, as determined by
each Local Partnership's financing and subsidy agreements. Accordingly,
Registrant does not anticipate that it will provide significant cash
distributions to its partners. There were no cash distributions to the partners
during the years ended March 30, 1999 and 1998.
Low-income Tax Credits, which are subject to various limitations, may be used by
partners to offset federal income tax liabilities. The Low-income Tax Credits
per Unit generated by Registrant and allocated to the limited partners for the
tax years ended December 31, 1998 and 1997 and the cumulative Low-income Tax
Credits allocated from inception through December 31, 1998 are as follows:
<TABLE>
<CAPTION>
<S> <C>
Low-income
Tax Credits
-----------
Tax year ended December 31, 1998 $ 154.46
Tax year ended December 31, 1997 153.74
Cumulative totals $1,145.48
</TABLE>
Notwithstanding future circumstances which may give rise to recapture or loss of
future benefits (see Part I, Item 2 Properties, herein), Registrant expects to
generate total Low-income Tax Credits from investments in Local Partnerships of
approximately $1,500 per Unit through December 31, 2003.
<PAGE>
Item 6. Selected Financial Data
The information set forth below presents selected financial data of Registrant.
Additional detailed financial information is set forth in the audited financial
statements included under Part II, Item 8 herein.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Years Ended March 30,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
Interest and other revenue $ 252,224 $ 257,645 $ 317,065 $ 335,724 $ 326,184
=========== =========== =========== =========== ===========
Equity in loss of investment in
local partnerships $(2,453,590) $(2,358,431) $(2,509,806) $(3,249,195) $(3,396,272)
=========== =========== =========== =========== ===========
Net loss $(2,756,082) $(2,649,323) $(2,718,536) $(3,443,977) $(3,611,978)
=========== =========== =========== =========== ===========
Net loss per unit of limited
partnership interest $ (76.04) $ (73.09) $ (75.00) $ (95.02) $ (99.65)
=========== =========== =========== =========== ===========
As of March 30,
------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
Total assets $ 9,511,546 $12,106,269 $15,503,629 $17,832,235 $21,199,982
=========== =========== =========== =========== ===========
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Capital Resources and Liquidity
Registrant admitted limited partners in four closings with aggregate limited
partners' capital contributions of $35,883,000. In connection with the offering
of the sale of Units, Registrant incurred organization and offering costs of
approximately $4,419,000 and established a working capital reserve of
approximately $2,153,000. The remaining net proceeds of approximately
$29,311,000 (the "Net Proceeds") were available to be applied to the acquisition
of limited partnership interests in local partnerships (the "Local
Partnerships") which own low-income multifamily residential complexes (the
"Property" or "Properties") which qualify for the low-income tax credit in
accordance with Section 42 of the Internal Revenue Code (the "Low-income Tax
Credit"). Registrant has utilized the Net Proceeds in acquiring an interest in
forty-three Local Partnerships.
As of March 30, 1999, Registrant has cash and cash equivalents and investments
in bonds totaling $3,457,623, which is available for operating expenses of
Registrant and circumstances which may arise in connection with the Local
Partnerships. As of March 30, 1999, Registrant's investments in bonds represent
corporate bonds of $1,776,815 and U.S. Treasury debt securities of $1,113,195
with various maturity dates ranging from 2000 to 2023. Registrant acquired such
investments in bonds with the intention of utilizing proceeds generated by such
investments to meet its annual obligations. Future sources of Registrant funds
are expected primarily from interest earned on working capital and limited cash
distributions from Local Partnerships.
During the year ended March 30, 1999, Registrant received cash from interest
revenue, redemption of bonds and distributions and other income from Local
Partnerships and utilized cash for operating expenses and a capital contribution
to a Local Partnership. Cash and cash equivalents and investments in bonds
available-for-sale decreased, in the aggregate, by approximately $27,000 during
the year ended March 30, 1999 (which includes a net unrealized gain on
investments in bonds of approximately $12,000, the amortization of net premium
on investments in bonds of approximately $13,000 and the accretion of zero
coupon bonds of approximately $86,000) and restricted cash decreased by
approximately $84,000 as a result of a capital contribution paid to a Local
Partnership. Notwithstanding circumstances that may arise in connection with the
Properties, Registrant does not expect to realize significant gains or losses on
its investments in bonds, if any.
During the year ended March 30, 1999, the investment in Local Partnerships
decreased as a result of Registrant's equity in the Local Partnerships' net loss
for the year ended December 31, 1998 of $2,453,590 and cash distributions
received from
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)
Local Partnerships of $29,132 (exclusive of distributions from Local
Partnerships of $7,457 classified as other income). Payable to general partner
in the accompanying balance sheet as of March 30, 1999 represents accrued
management fees.
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. Accordingly, the investment
is carried at cost which includes capital contributions payable, and is adjusted
for Registrant's share of each Local Partnership's results of operations and by
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. Equity in loss in excess of
Registrant's investment balance in a Local Partnership is allocated to other
partners' capital in any such Local Partnership. As a result, the reported
equity in loss of investment in Local Partnerships is expected to decrease as
Registrant's investment balances in the respective Local Partnerships become
zero. The combined statements of operations of the Local Partnerships reflected
in Note 5 to Registrant's financial statements include the operating results of
all Local Partnerships, irrespective of Registrant's investment balances.
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 below under
Local Partnership Matters regarding certain Local Partnerships currently
operating below economic break even levels.
Registrant's operations for the years ended March 30, 1999, 1998 and 1997
resulted in net losses of $2,756,082, $2,649,323, and $2,718,536, respectively.
The increase in net loss from 1998 to 1999 is primarily attributable to an
increase in equity in loss of investment in Local Partnerships of approximately
$95,000. The decrease in net loss from 1997 to 1998 is primarily attributable to
a decrease in equity in loss of investment in Local Partnerships of
approximately $151,000, partially offset by a decrease in interest revenue of
approximately $66,000 and an increase in professional fees of approximately
$21,000. Equity in loss of investment in Local Partnerships has fluctuated over
the last three years as a result of (i) impairment losses incurred in connection
with Westminster Apartments Limited Partnership ("Westminster") in 1999 and
Christian Street Commons Associates ("Christian Street") in 1998 and (ii)
changes in the net operating losses of those Local Partnerships in which
Registrant continues to have an investment balance.
The Local Partnerships' net loss of approximately $5,197,000 for the year ended
December 31, 1998 includes depreciation and amortization expense of
approximately $4,058,000, interest on non-mandatory debt of approximately
$333,000 and a loss from impairment of long-lived assets of approximately
$1,803,000, and does not include principal payments on permanent mortgages of
approximately $561,000. The Local Partnerships' net loss of approximately
$4,269,000 for the year ended December 31, 1997 includes depreciation and
amortization expense of approximately $4,066,000, interest on non-mandatory debt
of approximately $331,000 and a loss from impairment of long-lived assets of
approximately $1,033,000, and does not include principal payments on permanent
mortgages of approximately $432,000. The Local Partnerships' net loss of
approximately $3,260,000 for the year ended December 31, 1996 includes
depreciation and amortization expense of approximately $4,218,000 and interest
on non-mandatory debt of approximately $299,000, and does not include principal
payments on permanent mortgages of approximately $309,000. The results of
operations of the Local Partnerships for the year ended December 31, 1998 are
not necessarily indicative of the results that may be expected in future
periods.
Local Partnership Matters
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 pursuant to subsidy agreements ("HAP Contracts") are subject to
specific laws, regulations and agreements with federal and state agencies. One
Local Partnership's HAP Contracts are scheduled to expire in 1999. 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, certain general
partners of the Local Partnerships (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 year ended December 31, 1998, revenue from operations
of the Local Partnerships have generally been sufficient to
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
cover 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' operating 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 an
operating deficit after taking into account their mortgage and financing
structure and any required deferral of property management fees.
The terms of the partnership agreement of Christian Street require the Local
General Partners 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. Christian Street incurred an
operating deficit of approximately $11,000 for the year ended December 31, 1998,
which includes property management fees of approximately $5,000. As of December
31, 1998 the Local General Partners have advanced approximately $85,000 under
their Deficit Guarantee obligation and payments on the mortgage and real estate
taxes are current. Registrant's investment balance in Christian Street, after
the cumulative equity losses, became zero during the year ended March 30, 1998.
Of Registrant's total annual Low-income Tax Credits, approximately 2% is
allocated from Christian Street.
The terms of the partnership agreement of Westminster require the Local General
Partner to advance funds to cover operating deficits through 2009 and to cause
the management agent to defer property management fees in order to avoid a
default under the mortgage. Westminster incurred an operating deficit of
approximately $27,000 for the year ended December 31, 1998, which includes
property management fees of approximately $16,000. In addition, as of December
31, 1998, Westminster is one month in arrears on its mortgage, and five to seven
months in arrears on its replacement reserve and escrow requirements. The Local
General Partner reports that Westminster has not made its required mortgage
payments in 1999 and that no default has been declared by the lender. Therefore,
due to ongoing operating deficits and the uncertainty of future operating
income, it has been determined that the underlying rental property has been
permanently impaired in accordance with applicable accounting practices.
Accordingly, the combined statement of operations of the Local Partnerships for
the year ended December 31, 1998 as reflected in Note 5 to the financial
statements, includes an impairment loss of $1,802,881. As a result, Registrant
recognized additional equity in loss of its investment in Westminster of
approximately $700,000 in connection with the aforementioned impairment and
Registrant's investment balance in Westminster, after the cumulative equity
losses, became zero during the year ended March 30, 1999. Notwithstanding the
accounting treatment concerning the impairment loss, Registrant has not
experienced an interruption in the allocation of Low-income Tax Credits from
Westminster. Of Registrant's total annual Low-income Tax Credits, approximately
4% is allocated from Westminster.
The terms of the partnership agreement of Batesville Family, L.P. ("Batesville")
require the management agent to defer property management fees in order to avoid
a default under the mortgage. Batesville incurred an operating deficit of
approximately $26,000 for the year ended December 31, 1998, which includes
property management fees of approximately $3,000. Payments on the mortgage and
real estate taxes are current. Registrant's investment balance in Batesville,
after cumulative equity losses, became zero during the year ended March 30,
1997. Of Registrant's total annual Low-income Tax Credits, approximately 1% is
allocated from Batesville.
The terms of the partnership agreement of Sydney Engel Associates L.P. ("Sydney
Engel") require the Local General Partners to advance funds to cover operating
deficits up to $1,000,000 through April 2002 and to cause the management agent
to defer property management fees in order to avoid a default under the
mortgage. Sydney Engel incurred an operating deficit of approximately $218,000
for the year ended December 31, 1998, which includes property management fees of
approximately $99,000. Payments on the mortgage and real estate taxes are
current. During 1998, Sydney Engel utilized approximately $52,000 of an
operating deficit reserve, which has a balance of approximately $375,000 as of
December 31, 1998. Registrant's investment balance in Sydney Engel, after
cumulative equity losses, became zero during the year ended March 30, 1997. Of
Registrant's total annual Low-income Tax Credits, approximately 9% is allocated
from Sydney Engel.
Fulton Street Houses Limited Partnership ("Fulton Street") has an escrow of
approximately $290,000 as of December 31, 1998 to cover operating deficits and
there are no Mandatory Debt Service payments or real estate taxes required
during the Compliance Period. Fulton Street reported an operating deficit of
approximately $53,000 for the year ended December 31, 1998. Of Registrant's
total annual Low-income Tax Credits, approximately 8% is allocated from Fulton
Street
Inflation
Inflation is not expected to have a material adverse impact on Registrant's
operations during its period of ownership of the Local Partnership Interests.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
Adoption of Accounting Standard
Registrant has adopted Statement of Financial Accounting Standard ("SFAS") No.
130, "Reporting Comprehensive Income." SFAS No. 130 establishes standards for
reporting and display of comprehensive income and its components (revenues,
expenses, gains and losses) in a full set of general-purpose financial
statements. Other comprehensive income (loss) in the accompanying statements of
operations resulted from net unrealized gains (losses) on investments in bonds
available-for-sale. Accumulated other comprehensive income in the accompanying
balance sheets reflects the net unrealized gain on investments in bonds
available-for-sale. The statements of operations for the years ended March 30,
1998 and 1997 include certain reclassifications to reflect the adoption of SFAS
No. 130.
Registrant has adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," which establishes standards for reporting
information about operating segments and related disclosures about products and
services, geographic areas and major customers. Registrant is in one business
segment and follows the requirements of SFAS No. 131.
Year 2000 Compliance
The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a two
digit year is commonly referred to as the year 2000 compliance ("Y2K") issue. As
the year 2000 approaches, such systems may be unable to accurately process
certain data-based information. Many businesses may need to upgrade existing
systems or purchase new ones to correct the Y2K issue. Registrant has performed
an assessment of its computer software and hardware and believes it has made the
necessary upgrades in an effort to ensure compliance. However, there can be no
assurance that the systems of other entities on which Registrant relies,
including the Local Partnerships which report to Registrant on a periodic basis
for the purpose of Registrant's reporting to its investors, will be timely
converted. Registrant has corresponded with the Local Partnerships to ensure
their awareness of the Y2K issue and has requested details regarding their
efforts to ensure compliance. The total cost associated with Y2K implementation
is not expected to materially impact Registrant's financial position or results
of operations in any given year. However, there can be no assurance that a
failure to convert by Registrant or another entity would not have a material
adverse impact on Registrant.
Item 7A. Quantitative and Qualitative Disclosure About Market Risk
The market value of Registrant's investments in bonds is subject to fluctuation
based upon changes in interest rates relative to each investment's maturity
date. Since Registrant's investments in bonds have various maturity dates
through 2023, the value of such investments may be adversely impacted in an
environment of rising interest rates in the event Registrant decides to
liquidate any such investment prior to its maturity. Because Registrant
presently intends to hold such investments to their respective maturities,
Registrant does not anticipate any material adverse impact in connection with
such investments.
The Properties are generally located where there is a demand for low-income
housing. Accordingly, there is a significant likelihood that new properties
could be built in the general vicinity of the respective Properties. As a
result, the respective Properties' ability to operate at high occupancy levels
is subject to competition from newly built low-income housing.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
Item 8. Financial Statements and Supplementary Data
Table of Contents Page
Independent Auditors' Report..................................................15
Balance Sheets................................................................16
Statements of Operations......................................................17
Statements of Changes in Partners' Equity (Deficit)...........................18
Statements of Cash Flows......................................................19
Notes to Financial Statements.................................................21
No financial statement schedules are included because of the absence of the
conditions under which they are required or because the information is included
in the financial statements or the notes thereto.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners
American Tax Credit Properties III L.P.
We have audited the accompanying balance sheets of American Tax Credit
Properties III L.P. as of March 30, 1999 and 1998, and the related statements of
operations, changes in partners' equity (deficit) and cash flows for each of the
three years in the period ended March 30, 1999. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of American Tax Credit
Properties III L.P. as of March 30, 1999 and 1998, and the results of its
operations and its cash flows for each of the three years in the period ended
March 30, 1999, in conformity with generally accepted accounting principles.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
May 13, 1999
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
BALANCE SHEETS
MARCH 30, 1999 AND 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Notes 1999 1998
----- ---------- ----------
ASSETS
Cash and cash equivalents 3,9 $ 567,613 $ 419,372
Restricted cash 3,5,9 84,433
Investments in bonds available-for-sale 4,9 2,890,010 3,065,441
Investment in local partnerships 5,8 6,032,392 8,515,114
Interest receivable 9 21,531 21,909
---------- ----------
$9,511,546 $ 12,106,269
========== ==========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses 8 $ 1,105,703 $ 997,634
Payable to general partner 6,8 1,061,185 930,614
Capital contributions payable 5,9 84,433
Other 11,700 16,450
---------- ----------
2,178,588 2,029,131
========== ==========
Commitments and contingencies 8
Partners' equity (deficit) 2,4
General partner (242,419) (214,858)
Limited partners (35,883 units of limited partnership interest
outstanding) 7,530,193 10,258,714
Accumulated other comprehensive income, net 45,184 33,282
---------- ----------
7,332,958 10,077,138
---------- ----------
$ 9,511,546 $ 12,106,269
========== ==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 30, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Notes 1999 1998 1997
----- ------ ------ ------
REVENUE
Interest $ 244,767 $ 250,973 $ 317,065
Other income from local partnerships 7,457 6,672
---------- ---------- -----------
TOTAL REVENUE 252,224 257,645 317,065
========== ========== ===========
EXPENSES
Administration fees 8 230,571 230,571 230,571
Management fees 6,8 230,571 230,571 230,571
Professional fees 67,327 67,118 45,849
Printing, postage and other 26,247 20,277 18,804
---------- ---------- ----------
TOTAL EXPENSES 554,716 548,537 525,795
---------- ---------- ----------
Loss from operations (302,492) (290,892) (208,730)
Equity in loss of investment in local partnerships 5 (2,453,590) (2,358,431) (2,509,806)
---------- ---------- ----------
NET LOSS (2,756,082) (2,649,323) (2,718,536)
Other comprehensive income (loss) 4 11,902 215,397 (87,008)
---------- ---------- ----------
COMPREHENSIVE LOSS $ (2,744,180) $ (2,433,926) $ (2,805,544)
========== ========== ==========
NET LOSS ATTRIBUTABLE TO 2
General partner $(27,561) $ (26,493) $ (27,185)
Limited partners (2,728,521) (2,622,830) (2,691,351)
---------- ---------- ----------
$ (2,756,082) $ (2,649,323) $ (2,718,536)
========== ========== ==========
NET LOSS per unit of limited partnership
interest (35,883 units of limited partnership
interest) $ (76.04) $ (73.09) $ (75.00)
========== ========== ==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
YEARS ENDED MARCH 30, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Accumulated Other
General Limited Comprehensive
Partner Partners Income (Loss), Net Total
------------ ----------- ------------------ -----------
Partners' equity (deficit), March 30, 1996 $ (161,180) $15,572,895 $ (95,107) $15,316,608
Net loss (27,185) (2,691,351) (2,718,536)
Other comprehensive loss, net (87,008) (87,008)
---------- ----------- ------------ -----------
Partners' equity (deficit), March 30, 1997 (188,365) 12,881,544 (182,115) 12,511,064
Net loss (26,493) (2,622,830) (2,649,323)
Other comprehensive income, net 215,397 215,397
----------- ----------- ------------ -----------
Partners' equity (deficit), March 30, 1998 (214,858) 10,258,714 33,282 10,077,138
Net loss 27,561) (2,728,521) (2,756,082)
Other comprehensive income, net 11,902 11,902
----------- ----------- ------------ -----------
Partners' equity (deficit), March 30, 1999 $ (242,419) $ 7,530,193 $ 45,184 $ 7,332,958
=========== =========== ============ ===========
</TABLE>
See Notes to Financial Statements.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 30, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1999 1998 1997
---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received $ 172,539 $ 183,964 $ 248,496
Cash used for local partnerships for deferred expenses (4,750) (4,750) (4,750)
Cash paid for
administration fees (100,000) (100,000) (100,000)
management fees (100,000) (100,000) (100,000)
professional fees (84,827) (55,618) (40,999)
printing, postage and other expenses (31,250) (26,828) (9,989)
---------- ---------- ----------
Net cash used in operating activities (148,288) (103,232) (7,242)
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash distributions and other income from local partnerships 36,589 38,191 33,605
Maturity/redemption of bonds 259,940 75,000 200,000
Transfer from (to) restricted cash 84,433 1,224,775 (206,881)
Investment in local partnerships (84,433) (1,224,775)
---------- ---------- ----------
Net cash provided by investing activities 296,529 113,191 26,724
---------- ---------- ----------
Net increase in cash and cash equivalents 148,241 9,959 19,482
Cash and cash equivalents at beginning of year 419,372 409,413 389,931
---------- ---------- ----------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 567,613 $ 419,372 $ 409,413
========== ========== ==========
SIGNIFICANT NON-CASH INVESTING ACTIVITIES
Unrealized gain (loss) on investments in bonds available-for-sale, net $ 11,902 $ 215,397 $ (87,008)
========== ========== ==========
Increase in capital contributions payable $ 206,881
==========
</TABLE>
See reconciliation of net loss to net cash used in operating activities on page
20.
See Notes to Financial Statements.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF CASH FLOWS - (Continued)
YEARS ENDED MARCH 30, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1999 1998 1997
------------- ------------ ------------
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES
Net loss $ (2,756,082) $ (2,649,323) $ (2,718,536)
Adjustments to reconcile net loss to net cash used in
operating activities
Equity in loss of investment in local partnerships 2,453,590 2,358,431 2,509,806
Distributions from local partnerships classified as other income (7,457) (6,672)
Loss on redemption of bonds 677
Amortization of net premium on investments in bonds 13,206 14,907 16,852
Accretion of zero coupon bonds (86,490) (85,180) (88,256)
Decrease in interest receivable 378 3,264 2,835
Increase in payable to general partner 130,571 130,571 130,571
Increase in accounts payable and accrued expenses 108,069 135,520 144,236
Decrease in other liabilities (4,750) (4,750) (4,750)
------------- ------------ ------------
NET CASH USED IN OPERATING ACTIVITIES $ (148,288) $ (103,232) $ (7,242)
============= ============ ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 30, 1999, 1998 AND 1997
1. Organization, Purpose and Summary of Significant Accounting Policies
American Tax Credit Properties III L.P. (the "Partnership") was formed on
September 21, 1989 and the Certificate of Limited Partnership of the Partnership
was filed under the Delaware Revised Uniform Limited Partnership Act. There was
no operating activity until admission of the limited partners on June 13, 1990.
The Partnership was formed to invest primarily in leveraged low-income
multifamily residential complexes (the "Property" or "Properties") which qualify
for the low-income tax credit in accordance with Section 42 of the Internal
Revenue Code (the "Low-income Tax Credit"), through the acquisition of limited
partnership equity interests (the "Local Partnership Interests") in partnerships
(the "Local Partnership" or "Local Partnerships") that are the owners of the
Properties. Richman Tax Credit Properties III L.P. (the "General Partner") was
formed on September 21, 1989 to act as the general partner of the Partnership.
Basis of Accounting and Fiscal Year
The Partnership's records are maintained on the accrual basis of accounting for
both financial reporting and tax purposes. For financial reporting purposes, the
Partnership's fiscal year ends March 30 and its quarterly periods end June 29,
September 29 and December 30. The Local Partnerships have a calendar year for
financial reporting purposes. The Partnership and the Local Partnerships each
have a calendar year for income tax purposes.
The Partnership accounts for its investment in Local Partnerships in accordance
with the equity method of accounting, under which the investment is carried at
cost which includes capital contributions payable, and is adjusted for the
Partnership's share of each Local Partnership's results of operations and by
cash distributions received. Equity in loss of each investment in Local
Partnership allocated to the Partnership is recognized to the extent of the
Partnership's investment balance in each Local Partnership. Equity in loss in
excess of the Partnership's investment balance in a Local Partnership is
allocated to other partners' capital in any such Local Partnership. Previously
unrecognized equity in loss of any Local Partnership is recognized in the fiscal
year in which equity in income is earned by such Local Partnership.
Distributions received subsequent to the elimination of an investment balance
for any such investment in a Local Partnership are recorded as other income from
local partnerships.
The Partnership regularly assesses the carrying value of its investment in Local
Partnerships. If the carrying value is considered to exceed the value derived by
management (which contemplates remaining Low-income Tax Credits and residual
value, among other things), the Partnership reduces its investment in any such
Local Partnership and includes such reduction in equity in loss of investment in
local partnerships.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Adoption of Accounting Standard
The Partnership has adopted Statement of Financial Accounting Standard ("SFAS")
No. 130, "Reporting Comprehensive Income." SFAS No. 130 establishes standards
for reporting and display of comprehensive income and its components (revenues,
expenses, gains and losses) in a full set of general-purpose financial
statements. Other comprehensive income (loss) in the accompanying statements of
operations resulted from net unrealized gains (losses) on investments in bonds
available-for-sale. Accumulated other comprehensive income in the accompanying
balance sheets reflects the net unrealized gain on investments in bonds
available-for-sale. The statements of operations for the years ended March 30,
1998 and 1997 include certain reclassifications to reflect the adoption of SFAS
No. 130.
The Partnership has adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," which establishes standards for reporting
information about operating segments and related disclosures about products and
services, geographic areas and major customers. The Partnership is in one
business segment and follows the requirements of SFAS No. 131.
<PAGE>
MERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
1. Organization, Purpose and Summary of Significant Accounting Policies
(continued)
Cash and Cash Equivalents
The Partnership considers all highly liquid investments purchased with an
original maturity of three months or less at the date of acquisition to be cash
equivalents. Cash and cash equivalents are stated at cost which approximates
market value.
Restricted Cash
Restricted cash represents funds set aside to make the Partnership's required
capital contributions to Local Partnerships.
Investments in Bonds Available-For-Sale
Investments in bonds classified as available-for-sale represent investments that
the Partnership intends to hold for an indefinite period of time but not
necessarily to maturity. Any decision to sell an investment classified as
available-for-sale would be based on various factors, including significant
movements in interest rates and liquidity needs. Investments in bonds
available-for-sale are carried at estimated fair value and unrealized gains or
losses are included as items of comprehensive income (loss) and are reported as
a separate component of partners' equity (deficit).
Premiums and discounts on investments in bonds available-for-sale are amortized
(accreted) using the straight-line method over the life of the investment.
Amortized premiums offset interest revenue, while the accretion of discounts and
zero coupon bonds are included in interest revenue. Realized gain (loss) on
redemption or sale of investments in bonds available-for-sale are included in,
or offset against, interest revenue on the basis of the adjusted cost of each
specific investment redeemed or sold.
Income Taxes
No provision for income taxes has been made because all income, losses and tax
credits are allocated to the partners for inclusion in their respective tax
returns. In accordance with SFAS No. 109, "Accounting for Income Taxes," the
Partnership has included in Note 7 disclosures related to differences in the
book and tax bases of accounting.
2. Capital Contributions
On March 12, 1990, the Partnership commenced the offering of units (the "Units")
through Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Selling
Agent"). On June 13, 1990, December 27, 1990, December 31, 1991 and January 23,
1992, under the terms of the Amended and Restated Agreement of Limited
Partnership of the Partnership (the "Partnership Agreement"), the General
Partner admitted limited partners to the Partnership in four closings. At these
closings, subscriptions for a total of 35,883 Units representing $35,883,000 in
limited partners' capital contributions were accepted. In connection with the
offering of Units, the Partnership incurred organization and offering costs of
$4,418,530, of which $75,000 was capitalized as organization costs and
$4,343,530 was charged to the limited partners' equity as syndication costs. The
Partnership received a capital contribution of $100 from the General Partner.
Net loss is allocated 99% to the limited partners and 1% to the General Partner
in accordance with the Partnership Agreement.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
3. Cash and Cash Equivalents
As of March 30, 1999, the Partnership has cash and cash equivalents of $567,613
which are deposited in interest-bearing accounts with an institution which is
not insured by the Federal Deposit Insurance Corporation.
4. Investments in Bonds Available-For-Sale
The Partnership carries its investments in bonds as available-for-sale because
such investments are used to facilitate and provide flexibility for the
Partnership's obligations, including resolving circumstances which may arise in
connection with the Local Partnerships. Investments in bonds available-for-sale
are reflected in the accompanying balance sheets at estimated fair value.
As of March 30, 1999, certain information concerning investments in bonds
available-for-sale is as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Gross Gross Estimated
Amortized unrealized unrealized fair
Description and maturity cost gains losses value
- ------------------------ ------------ ----------- ------------ -----------
Corporate debt securities
Within one year $ 214,268 $ -- $ (1,000) $ 213,268
After one year through five years 458,611 11,841 -- 470,452
After five years through ten years 703,640 25,400 -- 729,040
After ten years 370,063 -- (6,008) 364,055
------------ ----------- ------------ -----------
1,746,582 37,241 (7,008) 1,776,815
U.S. Treasury debt securities
After five years through ten years 1,098,244 14,951 -- 1,113,195
------------ ----------- ------------ -----------
$ 2,844,826 $ 52,192 $ (7,008) $ 2,890,010
============ =========== ============ ===========
</TABLE>
As of March 30, 1998, certain information concerning investments in bonds
available-for-sale is as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Gross Gross Estimated
Amortized unrealized unrealized fair
Description and maturity cost gains losses value
- ------------------------ ------------ ----------- ------------ -----------
Corporate debt securities
After one year through five years $ 680,637 $ 13,309 $ (74) $ 693,872
After five years through ten years 367,021 7,481 (2,467) 372,035
After ten years 842,237 16,400 (7,550) 851,087
------------ ----------- ------------ -----------
1,889,895 37,190 (10,091) 1,916,994
------------ ----------- ------------ -----------
U.S. Treasury debt securities
After five years through ten years 537,345 5,202 (1,275) 541,272
After ten years 479,189 5,608 -- 484,797
------------ ----------- ------------ -----------
1,016,534 10,810 (1,275) 1,026,069
------------ ----------- ------------ -----------
U.S. government and agency securities
After ten years 125,730 -- (3,352) 122,378
------------ ----------- ------------ -----------
$ 3,032,159 $ 48,000 $ (14,718) $ 3,065,441
============ =========== =========== ============
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued) MARCH 30, 1999,
1998 AND 1997
5. Investment in Local Partnerships
As of March 30, 1999, the Partnership owns a limited partnership interest in the
following Local Partnerships:
1. April Gardens Apartments II Limited Partnership;
2. Ashland Park Apartments, L.P.;
3. Auburn Family, L.P.;
4. Batesville Family, L.P.;
5. Bay Springs Elderly, L.P.;
6. Brisas del Mar Apartments Limited Partnership;
7. Bruce Housing Associates, L.P.;
8. Carrington Limited Dividend Housing Association Limited Partnership;
9. Chestnut Park Associates, L.P.*;
10. Chowan Senior Manor Associates Limited Partnership;
11. Christian Street Commons Associates ("Christian Street");
12. Country View Apartments;
13. Desarrollos de Belen Limited Partnership;
14. Desarrollos de Emaus Limited Partnership;
15. Ellinwood Heights Apartments, L.P.;
16. Fulton Street Houses Limited Partnership;
17. Hayes Run Limited Partnership;
18. Howard L. Miller Sallisaw Apartments II, L.P.;
19. Hurlock Meadow Limited Partnership;
20. Ivy Family, L.P.;
21. Justin Associates;
22. LaBelle Commons, Ltd.;
23. Lawrence Road Properties, Ltd.;
24. Loma Del Norte Limited Partnership;
25. Long Reach Associates Limited Partnership;
26. Mirador del Toa Limited Partnership;
27. Moore Haven Commons, Ltd.;
28. NP-89 Limited Dividend Housing Association Limited Partnership;
29. Nash Hill Associates, Limited Partnership;
30. North Calhoun City, L.P.;
31. Orange City Plaza, Limited Partnership;
32. Puerta del Mar Limited Partnership;
33. Purvis Heights Properties, L.P.;
34. Queen Lane Investors;
35. Somerset Manor, Ltd.;
36. Sugar Cane Villas, Ltd.;
37. Summerfield Apartments Limited Partnership;
38. Sydney Engel Associates L.P. (formerly known as Sydney Engel
Associates)*;
39. Union Valley Associates Limited Partnership;
40. Walnut Grove Family, L.P.;
41. Waynesboro Apartments Limited Partnership;
42. West Calhoun City, L.P.; and
43. Westminster Apartments Limited Partnership ("Westminster").
* An affiliate of the General Partner is a general partner of
and/or provides services to the Local Partnership.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
Although the Partnership generally owns a 98.9%-99% limited partnership interest
in the Local Partnerships, the Partnership and American Tax Credit Properties II
L.P. ("ATCP II"), a Delaware limited partnership and an affiliate of the
Partnership, together, in the aggregate, own a 99% Local Partnership Interest in
the following Local Partnerships:
<TABLE>
<CAPTION>
<S> <C> <C>
The
Partnership ATCP II
----------- -------
Batesville Family, L.P. 61.75% 37.25%
Bruce Housing Associates, L.P. 61.75 37.25
Carrington Limited Dividend Housing
Association Limited Partnership 65.95 33.05
Ivy Family, L.P. 61.75 37.25
Lawrence Road Properties, Ltd. 61.75 37.25
Mirador del Toa Limited Partnership 59.06 39.94
Purvis Heights Properties, L.P. 61.75 37.25
Queen Lane Investors 48.50 50.50
</TABLE>
The Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States and
Puerto Rico. The required holding period of each Property, in order to avoid
Low-income Tax Credit recapture, is fifteen years from the year in which the
Low-income Tax Credits commence on the last building of the Property (the
"Compliance Period"). The rents of the Properties are controlled by federal and
state agencies pursuant to applicable laws and regulations. Under the terms of
each of the Local Partnership's partnership agreements, the Partnership has
committed to make capital contribution payments in the aggregate amount of
$29,264,476, all of which has been paid as of March 30, 1999. As of December 31,
1998, the Local Partnerships have outstanding mortgage loans payable totaling
approximately $86,359,000 and accrued interest payable on such loans totaling
approximately $2,420,000, which are secured by security interests and liens
common to mortgage loans on the Local Partnerships' real property and other
assets.
Equity in loss of investment in Local Partnerships is limited to the
Partnership's investment balance in each Local Partnership; any such excess is
applied to other partners' capital in any such Local Partnership (see Note 1).
The amount of such excess losses applied to other partners' capital was
$2,502,485, $1,665,224 and $534,104 for the years ended December 31, 1998, 1997
and 1996, respectively, as reflected in the combined statements of operations of
the Local Partnerships reflected herein Note 5.
The Properties are subject to evaluation for the existence of permanent
impairment under applicable accounting guidelines, whereby the carrying value of
the real property may be adjusted downward based on results of operations and
other events. As a result of such evaluation, the accompanying statements of
operations of the Local Partnerships reflected herein Note 5 include loss from
impairment for the years ended December 31, 1998 and 1997 of $1,802,881 in
connection with Westminster and $1,032,655 in connection with Christian Street,
respectively.
The combined balance sheets of the Local Partnerships as of December 31, 1998
and 1997 and the combined statements of operations of the Local Partnerships for
the years ended December 31, 1998, 1997 and 1996 are reflected on pages 26 and
27, respectively.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
The combined balance sheets of the Local Partnerships as of December 31, 1998
and 1997 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1998 1997
------------ ------------
ASSETS
Cash and cash equivalents $ 1,396,493 $ 863,259
Rents receivable 429,688 456,077
Capital contributions receivable 84,433 84,433
Escrow deposits and reserves 4,657,419 4,403,622
Land 3,910,215 3,910,215
Buildings and improvements (net of accumulated depreciation of
$31,057,575 and $27,045,787) 82,003,262 87,586,072
Intangible assets (net of accumulated amortization of
$618,890 and $584,504) 716,724 762,749
Other 804,785 1,401,766
------------ ------------
$ 94,003,019 $ 99,468,193
============ ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses $ 619,342 $ 442,564
Due to related parties 5,154,179 5,247,688
Mortgage loans 86,358,980 86,919,773
Notes payable 26,990 62,111
Accrued interest 2,420,323 2,109,721
Other 613,520 580,863
----------- ------------
95,193,334 95,362,720
----------- ------------
Partners' equity (deficit)
American Tax Credit Properties III L.P.
Capital contributions, net of distributions (includes
receivable of $84,433) 29,004,177 29,048,449
Cumulative loss (22,976,466) (20,522,876)
----------- ------------
6,027,711 8,525,573
----------- ------------
General partners and other limited partners, including ATCP II
Capital contributions, net of distributions (177,871) (123,346)
Cumulative loss (7,040,155) (4,296,754)
----------- ------------
(7,218,026) (4,420,100)
----------- ------------
(1,190,315) 4,105,473
----------- ------------
$94,003,019 $ 99,468,193
=========== ============
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued) MARCH 30, 1999,
1998 AND 1997
5. Investment in Local Partnerships (continued)
The combined statements of operations of the Local Partnerships for the years
ended December 31, 1998, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1998 1997 1996
-------------- -------------- -------------
REVENUE
Rental $ 10,620,935 $ 10,466,426 $ 10,325,782
Interest and other 398,028 365,948 437,813
------------- -------------- -------------
TOTAL REVENUE 11,018,963 10,832,374 10,763,595
============= ============== =============
EXPENSES
Administrative 2,173,131 2,049,122 2,121,842
Utilities 988,768 1,013,167 1,018,174
Operating, maintenance and other 2,630,453 2,253,753 1,987,209
Taxes and insurance 1,235,007 1,270,567 1,249,956
Financial (including amortization of
$46,025, $48,430 and $105,969) 3,373,926 3,464,203 3,534,807
Depreciation 4,011,788 4,017,625 4,111,594
Loss from impairment of long-lived assets 1,802,881 1,032,653
----------- ------------ -----------
TOTAL EXPENSES 16,215,954 15,101,090 14,023,582
----------- ------------ -----------
NET LOSS $ (5,196,991) $ (4,268,716) $ (3,259,987)
=========== ============ ===========
NET LOSS ATTRIBUTABLE TO
American Tax Credit Properties III L.P. $ (2,453,590) $ (2,358,431) $ (2,509,806)
General partners and other limited partners,
including ATCP II, which includes specially
allocated items of revenue (expense) to certain
general partners of $1,697, $0, and
($828), and $2,502,485 $1,665,224, and
$534,104 of Partnership loss in excess of
investment (2,743,401) (1,910,285) (750,181)
----------- ----------- ------------
$(5,196,991) $(4,268,716) $(3,259,987)
=========== =========== ============
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5.Investment in Local Partnerships (continued)
Investment activity with respect to each Local Partnership for the year ended
March 30, 1999 is as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Cash
Investment Partnership's distributions Cash Investment
in Local equity in received distributions in Local
Partnership income (loss) during the classified as Partnership
balance as for the year ended other income balance as of
of year ended March 30, during the March 30,
Name of Local Partnership March 30, December 31, 1999 year ended 1999
1998 1998 March 30,
1999
- ------------------------------------------------ ------------- ----------------- ------------- ---------------- --------------
April Gardens Apartments II Limited Partnership $ -- $ -- (2) $ (960) $ 960 $ --
Ashland Park Apartments, L.P. 4,219 (4,219)(1) -- -- --
Auburn Family, L.P. 39,750 (12,474) -- -- 27,276
Batesville Family, L.P. -- -- (2) -- -- --
Bay Springs Elderly, L.P. 73,081 (22,549) -- -- 50,532
Brisas del Mar Apartments Limited Partnership -- -- (2) (1,320) 1,320 --
Bruce Housing Associates, L.P. 30,489 (14,922) -- -- 15,567
Carrington Limited Dividend Housing
Association Limited Partnership 1,010,852 (113,926) -- -- 896,926
Chestnut Park Associates, L.P. 859,232 (439,009) -- -- 420,223
Chowan Senior Manor Associates Limited 7,930 (4,754)(1) (3,176) -- --
Partnership
Christian Street Commons Associates -- -- (2) -- -- --
Country View Apartments 156,142 (20,296) (1,914) -- 133,932
Desarrollos de Belen Limited Partnership 102,521 (59,482) -- -- 43,039
Desarrollos de Emaus Limited Partnership 164,558 (89,939) -- -- 74,619
Ellinwood Heights Apartments, L.P. 14,232 (6,023) -- -- 8,209
Fulton Street Houses Limited Partnership 569,673 (282,721) -- -- 286,952
Hayes Run Limited Partnership -- -- (2) (1,785) 1,785 --
Howard L. Miller Sallisaw Apartments II, L.P. 30,407 (13,571) -- -- 16,836
Hurlock Meadow Limited Partnership -- -- (2) (1,500) 1,500 --
Ivy Family, L.P. 17,371 (13,643) -- -- 3,728
Justin Associates 1,000,293 (106,493) -- -- 893,800
LaBelle Commons, Ltd. 75,250 (21,401) (2,500) -- 51,349
Lawrence Road Properties, Ltd. -- -- (2) -- -- --
Loma Del Norte Limited Partnership 120,434 (24,735) -- -- 95,699
Long Reach Associates Limited Partnership 172,088 (54,713) -- -- 117,375
Mirador del Toa Limited Partnership -- -- (2) (572) 572 --
Moore Haven Commons, Ltd. -- -- (2) -- -- --
NP-89 Limited Dividend Housing Association
Limited Partnership 1,498,571 (139,557) (10,000) -- 1,349,014
Nash Hill Associates, Limited Partnership 170,249 (34,449) -- -- 135,800
North Calhoun City, L.P. 75,938 (9,387) -- -- 66,551
Orange City Plaza, Limited Partnership 375,554 71 -- -- 375,625
Puerta del Mar Limited Partnership -- -- (2) (1,320) 1,320 --
Purvis Heights Properties, L.P. 48,429 13,333 (1,426) -- 60,336
Queen Lane Investors 205,870 (66,733) (5,116) -- 134,021
Somerset Manor, Ltd. -- -- (2) -- -- --
Sugar Cane Villas, Ltd. -- -- (2) -- -- --
Summerfield Apartments Limited Partnership 668,381 (35,640) (5,000) -- 627,741
Sydney Engel Associates L.P. -- -- (2) -- -- --
Union Valley Associates Limited Partnership 76,327 (30,633) -- -- 45,694
Walnut Grove Family, L.P. 15,826 (15,826)(1) -- -- --
Waynesboro Apartments Limited Partnership 55,015 (42,568) -- -- 12,447
West Calhoun City, L.P. 105,383 (16,282) -- -- 89,101
Westminster Apartments Limited Partnership 771,049 (771,049)(1) -- -- --
---------- ----------- ---------- ----------- ------------
$8,515,114 $(2,453,590) $ (36,589) $ 7,457 $ 6,032,392
========== =========== ========== =========== ============
</TABLE>
(1) The Partnership's equity in loss of an investment in a Local Partnership is
limited to the remaining investment balance.
(2) Additional equity in loss of investment is not allocated to the Partnership
until equity in income is earned.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5.Investment in Local Partnerships (continued)
Investment and capital contribution activity with respect to each Local
Partnership for the year ended March 30, 1998 is as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Cash
Investment distributions Cash Investment
in Local Partnership's received distributions in Local Capital
Partnership equity in during the classified as Partnership contribution
balance as loss for the year ended other income balance as of payable as
of year ended March 30, during the March 30, of March 30,
Name of Local Partnership March 30, December 31, 1998 year ended 1998 1998
1997 1997 March 30,
1998
------------ ------------ ------------- ------------- ------------- -----------
April Gardens Apartments II Limited
Partnership $ $ -- $ (960) $ 960 $ -- $ --
Ashland Park Apartments, L.P. 56,021 (51,802) -- -- 4,219 --
Auburn Family, L.P. 50,541 (10,791) -- -- 39,750 --
Batesville Family, L.P. -- -- (2) -- -- -- --
Bay Springs Elderly, L.P. 93,455 (20,374) -- -- 73,081 --
Brisas del Mar Apartments Limited -- -- (2) (1,320) 1,320 -- --
Partnership
Bruce Housing Associates, L.P. 46,518 (16,029) -- -- 30,489 --
Carrington Limited Dividend Housing
Association Limited Partnership 1,126,050 (115,198) -- -- 1,010,852 --
Chestnut Park Associates, L.P. 1,346,249 (487,017) -- -- 859,232 --
Chowan Senior Manor Associates Limited
Partnership 62,319 (54,389) -- -- 7,930 --
Christian Street Commons Associates 400,233 (400,233)(1) -- -- -- --
Country View Apartments 185,611 (28,719) (750) -- 156,142 --
Desarrollos de Belen Limited Partnership 160,973 (58,452) -- -- 102,521 --
Desarrollos de Emaus Limited Partnership 242,640 (78,082) -- -- 164,558 --
Ellinwood Heights Apartments, L.P. 40,017 (25,785) -- -- 14,232 --
Fulton Street Houses Limited Partnership 850,560 (280,887) -- -- 569,673 --
Hayes Run Limited Partnership -- -- (2) -- -- -- --
Howard L. Miller Sallisaw Apartments 36,263 (5,856) -- -- 30,407 --
II, L.P.
Hurlock Meadow Limited Partnership 8,747 (7,247)(1) (1,500) -- -- 84,433
Ivy Family, L.P. 34,473 (17,102) -- -- 17,371 --
Justin Associates 1,131,016 (130,723) -- -- 1,000,293 --
LaBelle Commons, Ltd. 104,805 (27,055) (2,500) -- 75,250 --
Lawrence Road Properties, Ltd. 3,327 (3,327)(1) -- -- -- --
Loma Del Norte Limited Partnership 149,057 (26,623) (2,000) -- 120,434 --
Long Reach Associates Limited 220,147 (48,059) -- -- 172,088 --
Partnership
Mirador del Toa Limited Partnership -- -- (2) (572) 572 -- --
Moore Haven Commons, Ltd. -- -- (2) -- -- -- --
NP-89 Limited Dividend Housing
Association Limited Partnership 1,644,687 (136,116) (10,000) -- 1,498,571 --
Nash Hill Associates, Limited 192,666 (18,780) (3,637) -- 170,249 --
Partnership
North Calhoun City, L.P. 82,162 (6,224) -- -- 75,938 --
Orange City Plaza, Limited Partnership 391,105 (15,551) -- -- 375,554 --
Puerta del Mar Limited Partnership -- -- (2) (1,320) 1,320 -- --
Purvis Heights Properties, L.P. 71,362 (22,933) -- -- 48,429 --
Queen Lane Investors 268,117 (58,615) (3,632) -- 205,870 --
Somerset Manor, Ltd. -- -- (2) -- -- -- --
Sugar Cane Villas, Ltd. -- -- (2) -- -- -- --
Summerfield Apartments Limited 716,388 (43,007) (5,000) -- 668,381 --
Partnership
Sydney Engel Associates L.P. -- -- (2) (2,500) 2,500 -- --
Union Valley Associates Limited 118,570 (40,993) (1,250) -- 76,327 --
Partnership
Walnut Grove Family, L.P. 39,568 (23,742) -- -- 15,826 --
Waynesboro Apartments Limited 96,977 (40,712) (1,250) -- 55,015 --
Partnership
West Calhoun City, L.P. 119,943 (14,560) -- -- 105,383 --
Westminster Apartments Limited 814,497 (43,448) -- -- 771,049 --
------------ ------------- ----------- ----------- ----------- ------------
Partnership
$ 10,905,064 $ (2,358,431) $ (38,191) $ 6,672 $ 8,515,114 $ 84,433
============ ============ ========== =========== ========== ============
</TABLE>
(1) The Partnership's equity in loss of an investment in a Local
Partnership is limited to the remaining investment balance.
(2) Additional equity in loss of investment is not allocated to the
Partnership until equity in income is earned.
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
Property information for each Local Partnership as of December 31, 1998
is as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Mortgage Buildings and Accumulated
Name of Local Partnership loans payable Land improvements depreciation
----------------------------------------------- --------------- --------------- ---------------- ---------------
April Gardens Apartments II Limited $ 2,000,362 $ 39,984 $ 2,471,739 $ (809,390)
Partnership
Ashland Park Apartments, L.P. 1,040,446 50,160 1,247,739 (366,744)
Auburn Family, L.P. 470,555 20,000 558,475 (156,888)
Batesville Family, L.P. 1,441,209 52,000 1,808,219 (519,311)
Bay Springs Elderly, L.P. 677,420 38,000 843,018 (232,319)
Brisas del Mar Apartments Limited Partnership 2,658,737 100,280 3,227,091 (1,080,780)
Bruce Housing Associates, L.P. 1,110,021 16,000 1,420,798 (459,525)
Carrington Limited Dividend Housing
Association Limited Partnership 3,440,212 200,000 6,369,080 (2,037,049)
Chestnut Park Associates, L.P. 5,189,118 781,700 8,654,778 (2,436,107)
Chowan Senior Manor Associates Limited 1,263,410 86,101 1,513,684 (437,796)
Partnership
Christian Street Commons Associates 620,521 -- -- --
Country View Apartments 939,775 35,698 1,215,505 (216,511)
Desarrollos de Belen Limited Partnership 1,887,073 96,190 2,493,144 (514,569)
Desarrollos de Emaus Limited Partnership 3,205,734 214,000 4,034,206 (771,217)
Ellinwood Heights Apartments, L.P. 689,658 10,000 864,434 (214,607)
Fulton Street Houses Limited Partnership 3,869,930 2 5,987,214 (1,480,023)
Hayes Run Limited Partnership 1,428,831 85,060 1,488,176 (311,322)
Howard L. Miller Sallisaw Apartments II, L.P. 616,935 39,000 726,868 (188,000)
Hurlock Meadow Limited Partnership 1,273,910 49,525 1,562,361 (440,694)
Ivy Family, L.P. 798,004 11,000 1,044,294 (342,231)
Justin Associates 2,454,251 27,472 4,344,154 (1,102,275)
LaBelle Commons, Ltd. 1,015,893 98,947 1,184,937 (286,545)
Lawrence Road Properties, Ltd. 760,577 50,000 929,308 (262,417)
Loma Del Norte Limited Partnership 1,440,903 84,874 1,775,054 (362,224)
Long Reach Associates Limited Partnership 1,482,023 118,446 1,877,387 (412,940)
Mirador del Toa Limited Partnership 1,887,322 105,000 2,329,996 (778,399)
Moore Haven Commons, Ltd. 930,338 73,645 1,197,000 (371,491)
NP-89 Limited Dividend Housing Association
Limited Partnership 4,230,637 150,000 7,366,559 (2,006,241)
Nash Hill Associates, Limited Partnership 1,472,616 123,876 1,676,137 (356,912)
North Calhoun City, L.P. 492,669 12,000 632,110 (177,773)
Orange City Plaza, Limited Partnership 508,823 53,904 1,041,636 (238,998)
Puerta del Mar Limited Partnership 2,531,462 115,000 3,046,045 (1,033,339)
Purvis Heights Properties, L.P. 1,149,032 47,000 1,455,334 (397,101)
Queen Lane Investors 1,572,111 60,301 2,742,479 (771,356)
Somerset Manor, Ltd. 899,846 53,383 1,099,816 (328,500)
Sugar Cane Villas, Ltd. 3,315,958 58,500 4,088,461 (1,231,318)
Summerfield Apartments Limited Partnership 1,784,586 195,411 2,684,961 (488,319)
Sydney Engel Associates L.P. 17,635,198 284,305 19,443,724 (5,701,503)
Union Valley Associates Limited Partnership 1,450,664 97,800 1,757,216 (364,895)
Walnut Grove Family, L.P. 848,821 30,000 1,017,192 (283,400)
Waynesboro Apartments Limited Partnership 1,486,904 76,000 1,790,366 (400,847)
West Calhoun City, L.P. 776,927 18,000 1,024,405 (277,570)
Westminster Apartments Limited Partnership 1,609,558 51,651 1,025,737 (408,129)
------------- ----------- ------------ -------------
$ 86,358,980 $ 3,910,215 $ 113,060,837 $ (31,057,575)
============= =========== ============ =============
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
Property information for each Local Partnership as of December 31, 1997
is as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Mortgage Buildings and Accumulated
Name of Local Partnership loans payable Land improvements depreciation
----------------------------------------------- --------------- --------------- ---------------- ---------------
April Gardens Apartments II Limited $ 2,004,455 $ 39,984 $ 2,469,537 $ (706,940)
Partnership
Ashland Park Apartments, L.P. 1,042,772 50,160 1,247,739 (321,176)
Auburn Family, L.P. 472,356 20,000 557,595 (135,833)
Batesville Family, L.P. 1,443,783 52,000 1,806,202 (474,324)
Bay Springs Elderly, L.P. 678,794 38,000 841,698 (200,630)
Brisas del Mar Apartments Limited Partnership 2,664,848 100,280 3,227,091 (946,001)
Bruce Housing Associates, L.P. 1,112,700 16,000 1,418,598 (408,466)
Carrington Limited Dividend Housing
Association Limited Partnership 3,464,852 200,000 6,364,620 (1,803,962)
Chestnut Park Associates, L.P. 5,239,113 781,700 8,654,778 (2,121,750)
Chowan Senior Manor Associates Limited 1,267,699 86,101 1,495,884 (374,073)
Partnership
Christian Street Commons Associates 627,335 -- -- --
Country View Apartments 941,880 35,698 1,213,947 (182,517)
Desarrollos de Belen Limited Partnership 1,889,550 96,190 2,490,637 (430,785)
Desarrollos de Emaus Limited Partnership 3,211,920 214,000 4,031,061 (634,977)
Ellinwood Heights Apartments, L.P. 691,142 10,000 864,075 (199,073)
Fulton Street Houses Limited Partnership 3,869,930 2 5,959,123 (1,258,635)
Hayes Run Limited Partnership 1,431,884 85,060 1,481,235 (273,151)
Howard L. Miller Sallisaw Apartments II, L.P. 618,138 39,000 725,785 (175,072)
Hurlock Meadow Limited Partnership 1,276,908 49,525 1,559,298 (381,270)
Ivy Family, L.P. 801,919 11,000 1,035,459 (304,284)
Justin Associates 2,483,842 27,472 4,344,154 (943,253)
LaBelle Commons, Ltd. 1,018,217 98,947 1,184,937 (243,375)
Lawrence Road Properties, Ltd. 762,171 50,000 928,273 (238,923)
Loma Del Norte Limited Partnership 1,443,839 84,874 1,769,702 (310,772)
Long Reach Associates Limited Partnership 1,485,035 118,446 1,868,040 (360,604)
Mirador del Toa Limited Partnership 1,891,902 105,000 2,327,341 (682,219)
Moore Haven Commons, Ltd. 932,340 73,645 1,197,000 (327,540)
NP-89 Limited Dividend Housing Association
Limited Partnership 4,306,098 150,000 7,333,401 (1,728,582)
Nash Hill Associates, Limited Partnership 1,475,786 123,876 1,676,137 (310,390)
North Calhoun City, L.P. 495,462 12,000 631,120 (152,679)
Orange City Plaza, Limited Partnership 529,837 53,904 1,041,636 (205,726)
Puerta del Mar Limited Partnership 2,537,277 115,000 3,046,045 (905,213)
Purvis Heights Properties, L.P. 1,153,999 47,000 1,443,465 (367,819)
Queen Lane Investors 1,580,073 60,301 2,735,277 (670,274)
Somerset Manor, Ltd. 901,698 53,383 1,097,281 (284,763)
Sugar Cane Villas, Ltd. 3,322,803 58,500 4,059,461 (1,080,291)
Summerfield Apartments Limited Partnership 1,806,784 195,411 2,683,173 (416,913)
Sydney Engel Associates L.P. 17,831,381 284,305 19,436,525 (4,991,233)
Union Valley Associates Limited Partnership 1,453,673 97,800 1,745,528 (319,584)
Walnut Grove Family, L.P. 850,407 30,000 1,011,054 (243,598)
Waynesboro Apartments Limited Partnership 1,490,153 76,000 1,786,404 (353,765)
West Calhoun City, L.P. 783,367 18,000 1,012,925 (237,939)
Westminster Apartments Limited Partnership 1,631,651 51,651 2,828,618 (337,413)
------------ ---------- ------------ --------------
$ 86,919,773 $ 3,910,215 $ 114,631,859 $ (27,045,787)
============ ========== ============ ==============
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
5. Investment in Local Partnerships (continued)
The summary of property activity during the year ended December 31, 1998 is
as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net change
Balance as of during the year Balance as of
December 31, 1997 ended December 31, 1998
December 31, 1998
----------------- ----------------- -----------------
Land $ 3,910,215 $ -- $ 3,910,215
Buildings and improvements 114,631,859 (1,571,022) 113,060,837
---------------- --------------- -----------------
118,542,074 (1,571,022) 116,971,052
Accumulated depreciation (27,045,787) (4,011,788) (31,057,575)
--------------- -------------- ----------------
$ 91,496,287 $ (5,582,810) $ 85,913,477
=============== ============== ================
</TABLE>
6. Transactions with General Partner and Affiliates
For the years ended March 30, 1999, 1998 and 1997, the Partnership paid
and/or incurred the following amounts to the General Partner and/or
affiliates in connection with services provided to the Partnership:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1999 1998 1997
Paid Incurred Paid Incurred Paid Incurred
------ ----------- --------- ---------- --------- ------------
Management fees (see Note 8) $ 100,000 $ 230,571 $ 100,000 $ 230,571 $ 100,000 $ 230,571
</TABLE>
For the years ended December 31, 1998, 1997 and 1996, the Local
Partnerships paid and/or incurred the following amounts to the General
Partner and/or affiliates in connection with services provided to the Local
Partnerships:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1998 1997 1996
Paid Incurred Paid Incurred Paid Incurred
--------- ---------- ---------- ----------- --------- ------------
Property management fees $ 109,732 $ 130,570 $112,083 $127,518 $ 3,599 $ 35,785
Insurance and other services 23,117 34,455 22,079 22,079 35,943 34,316
</TABLE>
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
7. Taxable Loss
A reconciliation of the financial statement net loss of the Partnership for
the years ended March 30, 1999, 1998 and 1997 to the tax return net loss
for the years ended December 31, 1998, 1997 and 1996 is as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1999 1998 1997
Financial statement net loss for the years ended ----------- ----------- ----------
March 30, 1999, 1998 and 1997 $ (2,756,082) $ (2,649,323) $(2,718,536)
Add (less) net transactions occurring between
January 1, 1996 and March 30, 1996 -- -- (49,819)
January 1, 1997 and March 30, 1997 -- (58,090) 58,090
January 1, 1998 and March 30, 1998 (76,012) 76,012 --
January 1, 1999 and March 30, 1999 90,310 -- --
------------ ------------ ------------
Adjusted financial statement net loss for the years
ended December 31, 1998, 1997 and 1996 (2,741,784) (2,631,401) (2,710,265)
Adjustment to management fees pursuant to
Internal Revenue Code Section 267 130,571 130,571 130,571
Differences arising from equity in loss of
investment in Local Partnerships (903,119) (718,329) (514,969)
Interest revenue 210,630 (208,732) --
Other differences (9,629) (5,367) (107)
------------ ------------ ------------
Tax return net loss for the years ended
December 31, 1998, 1997 and 1996 $ (3,313,331) $ (3,433,258) $(3,094,770)
</TABLE>
The differences between the investment in Local Partnerships for tax and
financial reporting purposes as of December 31, 1998 and 1997 are as
follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1998 1997
----------- ------------
Investment in Local Partnerships - financial reporting $ 6,027,711 $ 8,525,573
Investment in Local Partnerships - tax 4,279,897 7,473,246
---------- -----------
$ 1,747,814 $ 1,052,327
========== ===========
</TABLE>
Payable to general partner in the accompanying balance sheets represents
accrued management fees not deductible for tax purposes pursuant to
Internal Revenue Code Section 267.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
8. Commitments and Contingencies
Pursuant to the Partnership Agreement, the Partnership is required to pay the
General Partner an annual management fee ("Management Fee") and an annual
additional management fee ("Additional Management Fee") for its services in
connection with the management of the affairs of the Partnership, subject to
certain provisions of the Partnership Agreement. The annual Management Fee is
equal to .14% of all proceeds as of December 31 of any year, invested or
committed for investment in Local Partnerships plus all debts of the Local
Partnerships related to the Properties ("Invested Assets"). The Partnership
incurred a Management Fee of $161,400 for each of the three years ended March
30, 1999. The annual Additional Management Fee is equal to .06% of Invested
Assets. The Partnership incurred an Additional Management Fee of $69,171 for
each of the three years ended March 30, 1999. Such amounts are aggregated and
reflected under the caption management fees in the accompanying financial
statements. Unpaid Management Fees and Additional Management Fees in the amount
of $1,061,185 and $930,614 are recorded as payable to general partner in the
accompanying balance sheets as of March 30, 1999 and 1998, respectively.
In addition, pursuant to the Partnership Agreement, the Partnership is required
to pay ML Fund Administrators Inc., an affiliate of the Selling Agent, an annual
administration fee ("Administration Fee") and an annual additional
administration fee ("Additional Administration Fee") for its administrative
services provided to the Partnership. The annual Administration Fee is equal to
.14% of Invested Assets. The Partnership incurred an Administration Fee of
$161,400 for each of the three years ended March 30, 1999. The annual Additional
Administration Fee is subject to certain provisions of the Partnership Agreement
and is equal to .06% of Invested Assets. The Partnership incurred an Additional
Administration Fee of $69,171 for each of the three years ended March 30, 1999.
Such amounts are aggregated and reflected under the caption administration fees
in the accompanying financial statements. Unpaid Administration Fees and
Additional Administration Fees in the amount of $1,061,185 and $930,614 are
included in accounts payable and accrued expenses in the accompanying balance
sheets as of March 30, 1999 and 1998, respectively.
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.
In October 1997, Congress passed the Multifamily Assisted Housing and Reform and
Affordability Act, whereby the United States Department of Housing and Urban
Development ("HUD") was given the authority to renew certain project based
Section 8 contracts expiring during HUD's fiscal year 1998, where requested by
an owner, for an additional one year term generally at or below current rent
levels, subject to certain guidelines. In October 1998, HUD issued a directive
related to project based Section 8 contracts expiring during HUD's fiscal year
1999 which defines owners' notification responsibilities, advises owners of
project based Section 8 properties of what their options are regarding the
renewal of contracts, provides guidance and procedures to owners, management
agents, contract administrators and HUD staff on renewing Section 8 contracts,
provides guidance on setting renewal rents and handling renewal rent increases
and provides the requirements and procedures for opting-out of a Section 8
project based contract. The Partnership 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.
One Local Partnership's Section 8 contracts are scheduled to expire in 1999.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
MARCH 30, 1999, 1998 AND 1997
9. Fair Value of Financial Instruments
The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS No. 107,
"Disclosures about Fair Value of Financial Instruments." The estimated fair
value amounts have been determined using available market information,
assumptions, estimates and valuation methodologies.
Cash and Cash Equivalents and Restricted Cash
---------------------------------------------
The carrying amounts approximate fair value.
Investments in Bonds Available-For-Sale
---------------------------------------
Fair value is estimated based on market quotes provided by an independent
service as of the balance sheet dates.
Interest Receivable
-------------------
The carrying amount approximates fair value due to the terms of the
underlying investments.
Capital Contributions Payable
-----------------------------
The carrying amount approximates fair value in accordance with the Local
Partnerships' partnership agreements.
The estimated fair value of the Partnership's financial instruments as
of March 30, 1999 and 1998 are disclosed elsewhere in the financial
statements.
<PAGE>
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant
--------------------------------------------------
Registrant has no officers or directors. The General Partner manages
Registrant's affairs and has general responsibility and authority in all matters
affecting its business. The responsibilities of the General Partner are
currently carried out by Richman Housing. The executive officers and directors
of Richman Housing are:
<TABLE>
<CAPTION>
<S> <C> <C>
Served in present
Name capacity since 1 Position held
- ---------------------- ----------------- ----------------------
Richard Paul Richman September 21, 1989 President and Director
Eric P. Richelson September 21, 1989 Vice President
Neal Ludeke September 21, 1989 Vice President and Treasurer
David A. Salzman September 21, 1989 Vice President
Gina S. Scotti September 21, 1989 Secretary
</TABLE>
1Director holds office until his successor is elected and qualified. All
officers serve at the pleasure of the Director.
Richard Paul Richman, age 51, is the sole Director and President of Richman
Housing. Mr. Richman is the President and principal stockholder of Richman
Group. Mr. Richman is involved in the syndication and management of residential
property. Mr. Richman is also a director of Wilder Richman Resources Corp., an
affiliate of Richman Housing and the general partner of Secured Income L.P., a
director of Wilder Richman Historic Corporation, an affiliate of Richman Housing
and the general partner of Wilder Richman Historic Properties II, L.P., a
director of Richman Tax Credit Properties Inc., an affiliate of Richman Housing
and the general partner of the general partner of American Tax Credit Properties
L.P., a director of Richman Tax Credits Inc., an affiliate of Richman Housing
and the general partner of the general partner of American Tax Credit Properties
II L.P. and a director of Richman American Credit Corp., an affiliate of Richman
Housing and the manager of American Tax Credit Trust, a Delaware statutory
business trust.
Eric P. Richelson, age 47, is a Vice President of Richman Housing. Mr.
Richelson, formerly President of Wilder Richman Management Corporation, a
property management company affiliated with Richman Housing, is a Vice President
of Richman Asset Management, Inc. ("RAM") an affiliate of Richman Housing. Mr.
Richelson's responsibilities in connection with RAM include advisory services
provided to a small business investment company.
Neal Ludeke, age 41, is a Vice President and the Treasurer of Richman Housing.
Mr. Ludeke, a Vice President and the Treasurer of Richman Group, is engaged
primarily in the syndication, asset management and finance operations of Richman
Group. In addition, Mr. Ludeke is a Vice President and the Treasurer of RAM. Mr.
Ludeke's responsibilities in connection with RAM include advisory services
provided to a small business investment company and various partnership
management functions.
David A. Salzman, age 38, is a Vice President of Richman Housing and a minority
stockholder of Richman Group. Mr. Salzman is responsible for the acquisition and
development of residential real estate for syndication as a Vice President of
acquisitions of Richman Group.
Gina S. Scotti, age 43, is the Secretary of Richman Housing. Ms. Scotti is a
Vice President and the Secretary of Richman Group. As the Director of Investor
Services, Ms. Scotti is responsible for communications with investors.
<PAGE>
Item 11. Executive Compensation
-----------------------
Registrant has no officers or directors. Registrant does not pay the officers or
director of Richman Housing any remuneration. During the year ended March 30,
1999, Richman Housing did not pay any remuneration to any of its officers or its
director.
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
As of May 20, 1999, no person or entity was known by Registrant to be the
beneficial owner of more than five percent of the Units. Richman Housing is
wholly-owned by Richard Paul Richman.
Item 13. Certain Relationships and Related Transactions
-----------------------------------------------
The General Partner and certain of its affiliates are entitled to receive
certain fees and reimbursement of expenses and have received/earned fees for
services provided to Registrant as described in Notes 6 and 8 to the audited
financial statements included in Item 8 - "Financial Statements and
Supplementary Data" herein.
Transactions with General Partner and Affiliates
- ------------------------------------------------
The net tax losses and Low-income Tax Credits generated by Registrant during the
year ended December 31, 1998 allocated to the General Partner were $33,133 and
$56,042, respectively. The net tax losses and Low-income Tax Credits generated
by the General Partner during the year ended December 31, 1998 (from the
allocation of Registrant discussed above) and allocated to Richman Housing were
$26,781 and $45,299, respectively.
Indebtedness of Management.
- --------------------------
No officer or director of the General Partner or any affiliate of the foregoing
was indebted to Registrant at any time during the year ended March 30, 1999.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Financial Statements, Financial Statement Schedules and Exhibits
(1) Financial Statements
See Item 8 - "Financial Statements and Supplementary Data."
(2) Financial Statement Schedules
No financial statement schedules are included because of the absence
of the conditions under which they are required or because the
information is included in the financial statements or the notes
thereto.
<TABLE>
<CAPTION>
<S> <C> <C>
(3) Exhibits
Incorporated by
Exhibit Reference to
------------------------------------------------ --------------------------------
10.1 April Gardens Apartments II Limited Partnership Exhibit 10.1 to Form 10-Q Report
(A Delaware Limited Partnership) Amended and dated December 30, 1990
Restated Agreement of Limited Partnership (File No. 33-31390)
10.2 Ashland Park Apartments, L.P. Second Amended and Exhibit 10.2 to Form 10-K Report
Restated Agreement of Limited Partnership dated March 30, 1991
(File No. 33-31390)
10.3 Auburn Family, L.P. Amended and Restated Limited Exhibit 10.1 to Form 10-Q Report
Partnership Agreement and Certificate of Limited dated December 31, 1991
Partnership (File No. 0-19217)
10.4 Amended No. 2 to the Batesville Family, L.P. Exhibit 10.2 to Form 10-Q Report
Amended and Restated Agreement of Limited dated December 30, 1990
Partnership (File No. 33-31390)
10.5 Batesville Family, L.P. Amendment No. 3 to the Exhibit 10.2 to Form 10-Q Report
Amended and Restated Agreement of Limited dated December 31, 1991
Partnership (File No. 0-19217)
10.6 Bay Springs Elderly, L.P. (A Mississippi Limited Exhibit 10.1 to Form 10-Q Report
Partnership) Amended and Restated Limited dated September 29, 1991
Partnership Agreement and Certificate of Limited (File No. 0-19217)
Partnership
10.7 Brisas del Mar Apartments Limited Partnership (A Exhibit 10.3 to Form 10-Q Report
Delaware Limited Partnership) Amended and dated December 30, 1990
Restated Agreement of Limited Partnership (File No. 33-31390)
10.8 Amendment No. 1 to the Bruce Housing Associates, Exhibit 10.8 to Form 10-K Report
L.P. Amended and Restated Agreement of Limited dated March 30, 1992
Partnership (File No. 33-31390)
10.9 Amendment No. 2 to the Bruce Housing Associates, Exhibit 10.4 to Form 10-Q Report
L.P. Amended and Restated Agreement of Limited dated December 30, 1990
Partnership (File No. 33-31390)
10.10 Bruce Housing Associates, L.P. Amendment No. 3 Exhibit 10.3 to Form 10-Q Report
to the Amended and Restated Agreement of Limited dated December 31, 1991
Partnership (File No. 0-19217)
10.11 Carrington Limited Dividend Housing Association Exhibit 10.1 to Form 10-Q Report
Limited Partnership Amended and Restated dated September 29, 1990
Agreement of Limited Partnership (File No. 33-31390)
10.12 Carrington Limited Dividend Housing Association Exhibit 10.2 to Form 10-Q Report
Limited Partnership Second Amended and Restated dated September 29, 1990
Agreement of Limited Partnership (File No. 33-31390)
10.13 Carrington Limited Dividend Housing Association Exhibit 10.5 to Form 10-Q Report
Limited Partnership Amendment No. 1 to the dated December 30, 1990
Second Amended and Restated Agreement of Limited (File No. 33-31390)
Partnership
10.14 Chestnut Park Associates, L.P. Amended and Exhibit 10.3 to Form 10-Q Report
Restated Agreement of Limited Partnership dated September 29, 1990
(File No. 33-31390)
10.15 Chowan Senior Manor Associates Limited Exhibit 10.15 to Form 10-K Report
Partnership Amended and Restated Agreement of dated March 30, 1992
Limited Partnership (File No. 33-31390)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Incorporated by
Exhibit Reference to
----------------------------------------------- ---------------------------------
10.16 Christian Street Commons Associates Amended and Exhibit 10.16 to Form 10-K Report
Restated Limited Partnership Agreement and dated March 30, 1992
Certificate of Limited Partnership (File No. 33-31390)
10.17 Country View Apartments Second Amended and Exhibit 10.17 to Form 10-K Report
Restated Limited Partnership Agreement and dated March 30, 1992
Certificate of Limited Partnership (File No. 33-31390)
10.18 Desarrollos de Belen Limited Partnership Amended Exhibit 10.18 to Form 10-K Report
and Restated Agreement of Limited Partnership dated March 30, 1992
(File No. 33-31390)
10.19 Desarrollos de Emaus Limited Partnership Amended Exhibit 10.19 to Form 10-K Report
and Restated Agreement of Limited Partnership dated March 30, 1992
(File No. 33-31390)
10.20 Ellinwood Heights Apartments, L.P. Amended and Exhibit 10.1 to Form 10-Q Report
Restated Agreement of Limited Partnership dated June 29, 1991
(File No. 0-19217)
10.21 Fulton Street Houses Limited Partnership Amended Exhibit 10.21 to Form 10-K Report
and Restated Agreement of Limited Partnership dated March 30, 1992
(File No. 33-31390)
10.22 Hayes Run Limited Partnership Amended and Exhibit 10.2 to Form 10-Q Report
Restated Agreement of Limited Partnership dated June 29, 1991
(File No. 0-19217)
10.23 Howard L. Miller Sallisaw Apartments II, L.P. Exhibit 10.10 to Form 10-K Report
Third Amended and Restated Agreement and dated March 30, 1991
Certificate of Limited Partnership (File No. 33-31390)
10.24 Hurlock Meadow Limited Partnership Amended and Exhibit 10.24 to Form 10-K Report
Restated Limited Partnership Agreement dated March 30, 1992
(File No. 33-31390)
10.25 Amendment No. 1 to the Ivy Family, L.P. Amended Exhibit 10.6 to Form 10-Q Report
and Restated Agreement of Limited Partnership dated December 30, 1990
(File No. 33-31390)
10.26 Ivy Family, L.P. Amendment No. 3 to the Amended Exhibit 10.4 to Form 10-Q Report
and Restated Agreement of Limited Partnership dated December 31, 1991
(File No. 0-19217)
10.27 Justin Associates Amended and Restated Agreement Exhibit 10.7 to Form 10-Q Report
and Certificate of Limited Partnership dated December 30, 1990
(File No. 33-31390)
10.28 LaBelle Commons, Ltd. Amended and Restated Exhibit 10.13 to Form 10-K Report
Agreement of Limited Partnership dated March 30, 1991
(File No. 33-31390)
10.29 LaBelle Commons, Ltd. Amendment No. 1 to Amended Exhibit 10.29 to Form 10-K Report
and Restated Agreement of Limited Partnership dated March 30, 1992
(File No. 33-31390)
10.30 Amendment No. 2 to the Lawrence Road Properties, Exhibit 10.8 to Form 10-Q Report
Ltd. Amended and Restated Agreement of Limited dated December 30, 1990
Partnership (File No. 33-31390)
10.31 Lawrence Road Properties, Ltd. Amendment No. 3 Exhibit 10.5 to Form 10-Q Report
to the Amended and Restated Agreement of Limited dated December 31, 1991
Partnership (File No. 0-19217)
10.32 Loma Del Norte Limited Partnership Amended and Exhibit 10.2 to Form 10-Q Report
Restated Limited Partnership Agreement dated September 29, 1991
(File No. 0-19217)
10.33 Long Reach Associates Limited Partnership Sixth Exhibit 10.15 to Form 10-K Report
Amended and Restated Agreement of Limited dated March 30, 1991
Partnership (File No. 33-31390)
10.34 Mirador del Toa Limited Partnership Amended and Exhibit 10.16 to Form 10-K Report
Restated Agreement of Limited Partnership dated March 30, 1991
(File No. 33-31390)
10.35 Amendment No. 1 to the Mirador del Toa Limited Exhibit 10.17 to Form 10-K Report
Partnership Amended and Restated Agreement of dated March 30, 1991
Limited Partnership (File No. 33-31390)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Incorporated by
Exhibit Reference to
---------------------------------------------- --------------------------------
10.36 Moore Haven Commons, Ltd. Amended and Restated Exhibit 10.9 to Form 10-Q Report
Agreement of Limited Partnership dated December 30, 1990
(File No. 33-31390)
10.37 NP-89 Limited Dividend Housing Association Exhibit 10.3 to Form 10-Q Report
Limited Partnership Second Restated and Amended dated June 29, 1991
Agreement of Limited Partnership (File No. 0-19217)
10.38 Nash Hill Associates, Limited Partnership Exhibit 10.37 to Form 10-K Report
Amended and Restated Agreement of Limited dated March 30, 1992
Partnership (File No. 33-31390)
10.39 North Calhoun City, L.P. (A Mississippi Limited Exhibit 10.3 to Form 10-Q Report
Partnership) Amended and Restated Limited dated September 29, 1991
Partnership Agreement and Certificate of Limited (File No. 0-19217)
Partnership
10.40 Orange City Plaza, Limited Partnership Amended Exhibit 10.40 to Form 10-K Report
and Restated Partnership Agreement dated March 30, 1992
(File No. 33-31390)
10.41 Puerta del Mar Limited Partnership (A Delaware Exhibit 10.10 to Form 10-Q Report
Limited Partnership) Amended and Restated dated December 30, 1990
Agreement of Limited Partnership (File No. 33-31390)
10.42 Amendment No. 2 to the Purvis Heights Exhibit 10.11 to Form 10-Q Report
Properties, L.P. Amended and Restated Agreement dated December 30, 1990
of Limited Partnership (File No. 33-31390)
10.43 Purvis Heights Properties, L.P. Amendment No. 3 Exhibit 10.6 to Form 10-Q Report
to the Amended and Restated Agreement of Limited dated December 31, 1991
Partnership (File No. 0-19217)
10.44 Queen Lane Investors Amendment No. 1 to Amended Exhibit 10.12 to Form 10-Q Report
and Restated Agreement and Certificate of dated December 30, 1990
Limited Partnership (File No. 33-31390)
10.45 Somerset Manor, Ltd. Amended and Restated Exhibit 10.13 to Form 10-Q Report
Agreement and Certificate of Limited Partnership dated December 30, 1990
(File No. 33-31390)
10.46 Sugar Cane Villas, Ltd. Amended and Restated Exhibit 10.23 to Form 10-K Report
Agreement of Limited Partnership dated March 30, 1991
(File No. 33-31390)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Incorporated by
Exhibit Reference to
-------------------------------------------- ---------------------------------
10.47 Summerfield Apartments Limited Partnership Exhibit 10.47 to Form 10-K Report
Amended and Restated Agreement of Limited dated March 30, 1992
Partnership (File No. 33-31390)
10.48 Amendment No.1 to the Summerfield Apartments Exhibit 10.48 to Form 10-K Report
Limited Partnership Amended and Restated dated March 30, 1998
Agreement of Limited Partnership (File No. 0-19217)
10.49 Sydney Engel Associates Second Amended and Exhibit 10.4 to Form 10-Q Report
Restated Agreement of Limited Partnership dated September 29, 1990
(File No. 33-31390)
10.50 First Amendment to Second Amended and Restated Exhibit 10.49 to Form 10-K Report
Agreement of Limited Partnership of Sydney Engel dated March 30, 1997
Associates (File No. 0-19217)
10.51 Second Amendment to Second Amended and Restated Exhibit 10.50 to Form 10-K Report
Agreement of Limited Partnership of Sydney Engel dated March 30, 1997
Associates L.P. (File No. 0-19217)
10.52 Third Amendment to Second Amended and Restated Exhibit 10.51 to Form 10-K Report
Agreement of Limited Partnership of Sydney Engel dated March 30, 1997
Associates L.P. (File No. 0-19217)
10.53 Fourth Amendment to Second Amended and Restated Exhibit 10.52 to Form 10-K Report
Agreement of Limited Partnership of Sydney Engel dated March 30, 1997
Associates L.P. (File No. 0-19217)
10.54 Union Valley Associates Limited Partnership Exhibit 10.14 to Form 10-Q Report
Amended and Restated Agreement and Certificate dated December 30, 1990
of Limited Partnership (File No. 33-31390)
10.55 Walnut Grove Family, L.P. (A Mississippi Limited Exhibit 10.4 to Form 10-Q Report
Partnership) Amended and Restated Limited dated September 29, 1991
Partnership Agreement and Certificate of Limited (File No. 0-19217)
Partnership
10.56 Waynesboro Apartments Limited Partnership Exhibit 10.15 to Form 10-Q Report
Amended and Restated Agreement and Certificate dated December 30, 1990
of Limited Partnership (File No. 33-31390)
10.57 West Calhoun City, L.P. (A Mississippi Limited Exhibit 10.5 to Form 10-Q Report
Partnership) Amended and Restated Limited dated September 29, 1991
Partnership Agreement and Certificate of Limited (File No. 0-19217)
Partnership
10.58 Westminster Apartments Limited Partnership Exhibit 10.53 to Form 10-K Report
Second Amended and Restated Agreement of Limited dated March 30, 1992
Partnership (File No. 33-31390)
27 Financial Data Schedule
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Incorporated by
Exhibit Reference to
------------------------------------------ ------------------------------
28.0 Pages 20 through 31, 44 through 71 and 78 Exhibit 28.0 to Form
10-K Report through 80 of Prospectus dated March 30, 1990
filed pursuant to Rule 424(b)(3) (File No. 33-31390)
28.1 Pages 14 through 19 of Prospectus Exhibit 28.1
filed pursuant to Rule 424(b)(3) dated March 30, 1991
under Securities Act of 1933 (File No. 33-31390)
28.2 Supplement No. 1 dated June 6, 1990 to Prospectus Exhibit 28.2 to Form 10-K Report
dated March 30, 1991
(File No. 33-31390)
28.3 Supplement No. 2 dated November 21, 1990 to Exhibit 28.3 to Form 10-K Report
Prospectus dated March 30, 1991
(File No. 33-31390)
28.4 Supplement No. 3 dated December 20, 1990 to Exhibit 28.4 to Form 10-K Report
Prospectus dated March 30, 1991
(File No. 33-31390)
28.5 Supplement No. 4 dated October 30, 1991 to Exhibit 28.5 to Form 10-K Report
Prospectus dated March 30, 1992
(File No. 33-31390)
28.6 Supplement No. 5 dated December 26, 1991 to Exhibit 28.6 to Form 10-K Report
Prospectus dated March 30, 1992
(File No. 33-31390)
28.7 Supplement No. 6 dated January 15, 1992 to Exhibit 28.7 to Form 10-K Report
Prospectus dated March 30, 1990
(File No. 33-31390)
(b) Reports on Form 8-K
No reports on Form 8-K were filed by Registrant during the last quarter of
the period covered by this report.
(c) Exhibits
See (a)(3) above.
(d) Financial Statement Schedules
See (a)(2) above.
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
<TABLE>
<CAPTION>
<S> <C> <C>
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: June 28, 1999 /s/ Richard Paul Richman
------------- -------------------------
by: Richard Paul Richman
President
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant in
the capacities and on the dates indicated. <TABLE> <CAPTION>
<S> <C> <C>
Signature Title Date
/s/ Richard Paul Richman President, Chief Executive Officer June 28, 1999
(Richard Paul Richman) and Director of the general partner
of the General Partner
/s/ Neal Ludeke Vice President and Treasurer of June 28, 1999
(Neal Ludeke) the general partner of the General
Partner (Principal Financial and
Accounting Officer of Registrant)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
the year ended March 30, 1999 Form 10K Consolidated Balance Sheets and
Consolidated Statements of Operations and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<CIK> 0000856135
<NAME> American Tax Credit Properties III, L.P.
<MULTIPLIER> 1,000
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-30-1999
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