UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 29, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from_______________ to ____________
Commission file number: 0-19217
American Tax Credit Properties III L.P.
---------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 13-3545006
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Richman Tax Credit Properties III L.P.
599 West Putnam Avenue, 3rd Floor
Greenwich, Connecticut 06830
--------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 869-0900
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to filing requirements
for the past 90 days.
Yes [X] No__
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Table of Contents Page
Balance Sheets.......................................................3
Statements of Operations.............................................4
Statements of Cash Flows.............................................5
Notes to Financial Statements........................................7
2
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
BALANCE SHEETS
(UNAUDITED)
June 29, March 30,
Notes 2000 2000
----- ---- ----
ASSETS
<S> <C> <C> <C>
Cash and cash equivalents $ 879,364 $ 873,709
Investments in bonds 2 2,469,867 2,452,950
Investment in local partnerships 3 4,028,977 4,236,668
Interest receivable 27,484 16,628
------------- -------------
$ 7,405,692 $ 7,579,955
============= ==============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses $ 1,193,338 $ 1,181,877
Payable to general partner 1,332,650 1,246,404
Other 6,950 6,950
------------- -------------
2,532,938 2,435,231
------------- -------------
Commitment and contingencies 3
Partners' equity (deficit)
General partner (265,565) (262,775)
Limited partners (35,883 units of limited partnership
interest outstanding) 5,238,706 5,514,902
Accumulated other comprehensive loss, net 2 (100,387) (107,403)
------------- -------------
4,872,754 5,144,724
------------- -------------
$ 7,405,692 $ 7,579,955
============= ==============
See Notes to Financial Statements.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JUNE 29, 2000 AND 1999
(UNAUDITED)
Notes 2000 1999
----- ---- ----
REVENUE
<S> <C> <C>
Interest $ 57,178 $ 56,766
Other income from local partnerships 4,172
----------- ---------
TOTAL REVENUE 57,178 60,938
----------- ---------
EXPENSES
Administration fees 57,643 57,643
Management fees 57,643 57,643
Professional fees 10,171 6,355
Printing, postage and other 4,456 5,908
----------- ---------
TOTAL EXPENSES 129,913 127,549
----------- ---------
Loss from operations (72,735) (66,611)
Equity in loss of investment in local partnerships 3 (206,251) (407,294)
----------- ---------
NET LOSS (278,986) (473,905)
Other comprehensive income (loss) 2 7,016 (81,297)
----------- ---------
COMPREHENSIVE LOSS $(271,970) $(555,202)
=========== =========
NET LOSS ATTRIBUTABLE TO
General partner $ (2,789) $ (4,739)
Limited partners (276,197) (469,166)
----------- ---------
$ (278,986) $(473,905)
=========== =========
NET LOSS per unit of limited partnership interest (35,883 units of
limited partnership interest) $ (7.97) $ (13.07)
=========== =========
See Notes to Financial Statements.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED JUNE 29, 2000 AND 1999
(UNAUDITED)
2000 1999
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Interest received $ 26,981 $ 30,299
Cash paid for
administration fees (4,050) (25,000)
management fees (25,000) (25,000)
printing, postage and other expenses (3,156) (206)
---------- ------------
Net cash used in operating activities (5,225) (19,907)
---------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash distributions and other income from local partnerships 1,440 16,172
Maturity/redemption of bonds 9,440 195,901
---------- ------------
Net cash provided by investing activities 10,880 212,073
---------- ------------
Net increase in cash and cash equivalents 5,655 192,166
Cash and cash equivalents at beginning of period 873,709 567,613
---------- ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 879,364 $ 759,779
========== ============
SIGNIFICANT NON-CASH INVESTING ACTIVITIES
Unrealized gain (loss) on investments in bonds, net $ 7,016 $ (81,297)
========== ============
</TABLE>
See reconciliation of net loss to net cash used in operating activities on
page 6.
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES III L.P.
STATEMENTS OF CASH FLOWS - (continued)
THREE MONTHS ENDED JUNE 29, 2000 AND 1999
(UNAUDITED)
2000 1999
---- ----
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES
<S> <C> <C>
Net loss $(278,986) $ (473,905)
Adjustments to reconcile net loss to net cash used in operating activities
Equity in loss of investment in local partnerships 206,251 407,294
Distributions from local partnerships classified as other income (4,172)
Amortization of net premium on investments in bonds 2,222 3,342
Accretion of zero coupon bonds (21,564) (21,564)
Increase in interest receivable (10,855) (8,245)
Increase in payable to general partner 86,246 32,643
Increase in accounts payable and accrued expenses 11,461 44,700
--------- ----------
NET CASH USED IN OPERATING ACTIVITIES $ (5,225) $ (19,907)
========= ==========
See Notes to Financial Statements.
</TABLE>
6
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III, L.P.
NOTES TO FINANCIAL STATEMENTS
JUNE 29, 2000
(UNAUDITED)
1. Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information. They do not include all information and footnotes
required by generally accepted accounting principles for complete financial
statements. The results of operations are impacted significantly by the
combined results of operations of the Local Partnerships, which are
provided by the Local Partnerships on an unaudited basis during interim
periods. Accordingly, the accompanying financial statements are dependent
on such unaudited information. In the opinion of the General Partner, the
financial statements include all adjustments necessary to present fairly
the financial position as of June 29, 2000 and the results of operations
and cash flows for the interim periods presented. All adjustments are of a
normal recurring nature. The results of operations for the three months
ended June 29, 2000 are not necessarily indicative of the results that may
be expected for the entire year.
2. Investments in Bonds
As of June 29, 2000, certain information concerning investments in bonds is
as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Estimated
Description and maturity cost gains losses fair value
------------------------ ---- ----- ------ ----------
Corporate debt securities
<S> <C> <C> <C> <C>
Within one year $ 151,667 $ -- $ (277) $ 151,390
After one year through five years 302,582 -- (3,827) 298,755
After five years through ten years 703,923 1,668 (27,801) 677,970
After ten years 211,533 -- (7,478) 204,055
------------- ------------- -------------- --------------
1,369,705 1,668 (39,384) 1,331,990
------------- ------------- -------------- --------------
U.S. Treasury debt securities
After five years through ten years 1,200,550 -- (62,673) 1,137,877
------------- ------------- -------------- --------------
$ 2,570,255 $ 1,668 $ (102,057) $ 2,469,867
============= ============= ============== ==============
</TABLE>
7
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
JUNE 29, 2000
(UNAUDITED)
3. Investment in Local Partnerships
The Partnership owns limited partnership interests in forty-three Local
Partnerships representing capital contributions in the aggregate amount of
$29,264,476, all of which have been paid. As of March 31, 2000, the Local
Partnerships have outstanding mortgage loans payable totaling approximately
$85,643,000 and accrued interest payable on such loans totaling
approximately $2,919,000, which are secured by security interests and liens
common to mortgage loans on the Local Partnerships' real property and other
assets.
For the three months ended June 29, 2000, the investment in Local
Partnerships activity consists of the following:
Investment in local partnerships as of March 30, 2000 $ 4,236,668
Equity in loss of investment in local partnerships (206,251)*
Cash distributions received from Local Partnerships (1,440)
-------------
Investment in local partnerships as of June 29, 2000 $ 4,028,977
* Equity in loss of investment in local partnerships is limited to the
Partnership's investment balance in each Local Partnership; any excess is
applied to other partners' capital in any such Local Partnership. The
amount of such excess losses applied to other partners' capital was
$733,674 for the three months ended March 31, 2000 as reflected in the
combined statement of operations of the Local Partnerships reflected
herein Note 3.
The combined unaudited balance sheets of the Local Partnerships as of March
31, 2000 and December 31, 1999 and the combined unaudited statements of
operations of the Local Partnerships for the three months ended March 31,
2000 and 1999 are reflected on pages 9 and 10, respectively.
8
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
JUNE 29, 2000
(UNAUDITED)
3. Investment in Local Partnerships (continued)
The combined balance sheets of the Local Partnerships as of March 31, 2000
and December 31, 1999 are as follows:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 1,304,728 $ 1,515,733
Rents receivable 350,517 415,459
Escrow deposits and reserves 4,811,221 4,772,669
Land 3,910,215 3,910,215
Buildings and improvements (net of accumulated
depreciation of $36,034,710 and $35,035,895) 77,443,064 78,393,812
Intangible assets (net of accumulated amortization of
$491,622 and $490,393) 660,371 670,822
Other 1,023,698 845,257
------------- -------------
$ 89,503,814 $ 90,523,967
============= =============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses $786,694 $599,251
Due to related parties 4,916,396 5,028,110
Mortgage loans 85,643,036 85,793,473
Notes payable 12,301 16,893
Accrued interest 2,919,968 2,826,511
Other 890,698 866,170
------------- -------------
95,169,093 95,130,408
------------- -------------
Partners' equity (deficit)
American Tax Credit Properties III L.P.
Capital contributions, net of distributions 28,941,729 28,965,604
Cumulative loss (24,751,533) (24,515,282)
------------- -------------
4,190,196 4,450,322
------------- -------------
General partners and other limited partners, including ATCP II
Capital contributions, net of distributions (234,015) (199,479)
Cumulative loss (9,621,460) (8,857,284)
------------- -------------
(9,855,475) (9,056,763)
------------- -------------
(5,665,279) (4,606,441)
------------- -------------
$ 89,503,814 $ 90,523,967
============= =============
</TABLE>
9
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
JUNE 29, 2000
(UNAUDITED)
3. Investment in Local Partnerships (continued)
The combined statements of operations of the Local Partnerships for the
three months ended March 31, 2000 and 1999 are as follows:
<TABLE>
<CAPTION>
2000 1999
---- ----
REVENUE
<S> <C> <C>
Rental $ 2,660,893 $ 2,694,711
Interest and other 74,085 77,144
------------- ------------
Total Revenue 2,734,978 2,771,855
------------- ------------
EXPENSES
Administrative 565,451 497,760
Utilities 318,916 305,931
Operating, maintenance and other 708,387 589,608
Taxes and insurance 317,616 320,778
Financial (including amortization of $10,541 and $11,448) 826,148 839,866
Depreciation 998,815 1,000,424
------------- ------------
Total Expenses 3,735,333 3,554,367
------------- ------------
NET LOSS $ (1,000,355) $ (782,512)
============= =============
NET LOSS ATTRIBUTABLE TO
American Tax Credit Properties III L.P. $ (206,251) $(407,294)
General partners and other limited partners, including
ATCP II, which includes $733,674 and $326,238 of
Partnership loss in excess of investment (794,104) (375,218)
------------- ------------
$ (1,000,355) $ (782,512)
============= ============
</TABLE>
The combined results of operations of the Local Partnerships for the three
months ended March 31, 2000 are not necessarily indicative of the results
that may be expected for an entire operating period.
4. Additional Information
Additional information, including the audited March 30, 2000 Financial
Statements and the Organization, Purpose and Summary of Significant
Accounting Policies, is included in the Partnership's Annual Report on Form
10-K for the fiscal year ended March 30, 2000 on file with the Securities
and Exchange Commission.
10
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Material Changes in Financial Condition
As of June 29, 2000, American Tax Credit Properties III L.P. (the "Registrant")
has not experienced a significant change in financial condition as compared to
March 30, 2000. Principal changes in assets are comprised of periodic
transactions and adjustments and anticipated equity in loss from operations of
the local partnerships (the "Local Partnerships") which own low-income
multifamily residential complexes (the "Properties") which qualify for the
low-income tax credit in accordance with Section 42 of the Internal Revenue Code
(the "Low-income Tax Credit"). During the three months ended June 29, 2000,
Registrant received cash from interest revenue, maturity/redemption of bonds and
distributions from local partnerships and utilized cash for operating expenses.
Cash and cash equivalents and investments in bonds increased, in the aggregate,
by approximately $23,000 during the three months ended June 29, 2000 (which
includes a net unrealized gain on investments in bonds of approximately $7,000,
the amortization of net premium on investments in bonds of approximately $2,000
and the accretion of zero coupon bonds of approximately $22,000).
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 three months ended June 29, 2000, the
investment in local partnerships decreased as a result of Registrant's equity in
the Local Partnerships' net loss for the three months ended March 31, 2000 of
$206,251 and cash distributions received from Local Partnerships of $1,440.
Accounts payable and accrued expenses includes deferred administration fees of
$1,136,683 and payable to general partner represents deferred management and
administration fees in the accompanying balance sheet as of June 29, 2000.
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 3 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 three months ended June 29, 2000 and 1999
resulted in net losses of $278,986 and $473,905, respectively. The decrease in
net loss is primarily attributable to a decrease in equity in loss of investment
in local partnerships of approximately $201,000. Other comprehensive income
(loss) for the three months ended June 29, 2000 and 1999 resulted from a net
unrealized gain (loss) on investments in bonds available-for-sale of $7,016 and
$(81,297), respectively.
11
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
The Local Partnerships' net loss of approximately $1,000,000 for the three
months ended March 31, 1999 was attributable to rental and other revenue of
approximately $2,735,000, exceeded by operating and interest expenses (including
interest on non-mandatory debt) of approximately $2,726,000 and approximately
$1,009,000 of depreciation and amortization expenses. The Local Partnerships'
net loss of approximately $783,000 for the three months ended March 31, 1999 was
attributable to rental and other revenue of approximately $2,772,000, exceeded
by operating and interest expenses (including interest on non-mandatory debt) of
approximately $2,543,000 and approximately $1,012,000 of depreciation and
amortization expenses. The results of operations of the Local Partnerships for
the three months ended March 31, 2000 are not necessarily indicative of the
results that may be expected in future periods.
Local Partnership Matters
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 "Ten Year Credit Period"). The Ten Year
Credit Period is expected to be fully exhausted by the Local Partnerships as of
December 31, 2003. 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, 1999, none of the Local Partnerships
have suffered an event of recapture of Low-income Tax Credits.
The Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States and
Puerto Rico. 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"). The subsidy agreements expire at various
times during and after the Compliance Periods of the Local Partnerships. Since
October 1997, the United States Department of Housing and Urban Development
("HUD") has issued a series of directives related to project based Section 8
contracts that define owners' notification responsibilities, advise owners of
project based Section 8 properties of what their options are regarding the
renewal of Section 8 contracts, provide guidance and procedures to owners,
management agents, contract administrators and HUD staff concerning renewal of
Section 8 contracts, provide policies and procedures on setting renewal rents
and handling renewal rent adjustments and provide 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 currently subject to renewal under applicable HUD
guidelines.
12
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
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 three months ended March 31, 2000, revenue from
operations of the Local Partnerships have generally been sufficient to 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
below break even operations after taking into account their mortgage and
financing structure and any required deferral of property management fees.
The terms of the partnership agreement of Westminster require the Local General
Partner to advance funds to cover operating deficits through 2009. As of March
31, 2000, Westminster is sixteen months in arrears on its mortgage and twenty to
twenty-two months in arrears on its replacement reserve and escrow requirements.
Although the Local General Partner had been conducting discussions with the
lender, the lender recently issued a notice of default. Current proposals
include the potential utilization of replacement reserves to reduce the
arrearages. There can be no assurance that the Local General Partner will be
successful in its negotiations with the lender. Westminster incurred an
operating deficit of approximately $15,000 for the three months ended March 31,
2000, which amount includes a provision for mandatory debt service and
replacement reserve deposits of $6,245 and $1,184 per month, respectively.
Registrant's investment balance in Westminster, after cumulative equity losses,
became zero during the year ended March 30, 1999. Of Registrant's total annual
Low-income Tax Credits, approximately 4% is allocated from Westminster.
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 $77,000
for the three months ended March 31, 2000, which includes property management
fees of approximately $21,465. Payments on the mortgage and real estate taxes
are current. 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 $299,000 as of March 31, 2000 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 $3,000 for the three months ended March 31, 2000. Of Registrant's
total annual Low-income Tax Credits, approximately 8% is allocated from Fulton
Street.
Year 2000 Compliance
Registrant successfully completed a program to ensure Year 2000 readiness. As a
result, Registrant had no Year 2000 problems that affected its business, results
of operations or financial condition.
13
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
Registrant has invested a significant portion of its working capital reserves in
corporate bonds and U.S. Treasury instruments. The market value of such
investments 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.
Although Registrant may utilize reserves to assist an under performing Property,
it otherwise intends to hold such investments to their respective maturities.
Therefore, Registrant does not anticipate any material adverse impact in
connection with such investments.
14
<PAGE>
AMERICAN TAX CREDIT PROPERTIES III L.P.
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
Registrant was a defendant in a complaint brought in connection with
the alleged wrongful interference with economic advantage resulting
from the delay of Registrant in providing a list of Unit holders to
facilitate a tender offer by plaintiff. The plaintiff sought
compensatory damages of approximately $246,000 and unspecified
punitive damages. Registrant filed a motion to dismiss which was
granted May, 2000.
Registrant is not aware of any other material legal proceedings.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
As discussed in Part I, Item 2 - Management's Discussion and Analysis
of Financial Condition and Results of Operations, the local general
partner of Westminster Apartments Limited Partnership ("Westminster")
reports that Westminster is sixteen months in arrears on its first
mortgage obligation as of March 31, 2000. Although the local general
partner is conducting discussions with the lender, the lender recently
issued a notice of default.
Item 6. Exhibits and Reports on Form 8-K
None
15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
AMERICAN TAX CREDIT PROPERTIES III L.P.
(a Delaware limited partnership)
By: Richman Tax Credit Properties III L.P.,
General Partner
by: Richman Housing Credits Inc.,
general partner
Dated: August 11, 2000 /s/ Richard Paul Richman
----------------------------------------
by: Richard Paul Richman
President, Chief Executive
Officer and Director of the
general partner of the
General Partner
Dated: August 11, 2000 /s/ Neal Ludeke
----------------------------------------
by: Neal Ludeke
Vice President and
Treasurer of the general partner
of the General Partner
(Principal Financial and Accounting
Officer of Registrant)
16
