UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended June 30, 1996
Commission File Number 0-21762
Gateway Tax Credit Fund III Ltd.
(Exact name of Registrant as specified in its charter)
Florida 59-3090386
(State or other jurisdiction of ( I.R.S. Employer No.)
incorporation or organization)
880 Carillon Parkway, St. Petersburg, Florida 33716
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code:
(813)573-3800
Indicate by check mark whether the Registrant: (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
Number of Units
Title of Each Class June 30, 1996
Units of Limited Partnership
Interest: $1,000 per unit 33,799
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II, 1995 Form 10-K, filed with the
Securities and Exchange Commission on June 27, 1996
Parts III and IV - Form S-11 Registration Statement
and all amendments and supplements thereto
File No. 33-44238
<PAGE>
PART I - Financial Information
Item 1. Financial Statements
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
JUNE 30, MARCH 31,
1996 1996
----------- -----------
SERIES 7 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 254,142 $ 259,782
Investments in Securities 42,724 42,189
Receivable from Project Partnerships 0 0
----------- ----------
Total Current Assets 296,866 301,971
Investments in Securities 443,708 436,329
Investments in Project
Partnerships, Net 5,224,930 5,464,982
----------- ----------
Total Assets $5,965,504 $6,203,282
=========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 48,352 $ 53,005
Payable to Project Partnerships 0 0
---------- ----------
Total Current Liabilities 48,352 53,005
Long-Term Liabilities:
Payable to General Partners 157,805 139,289
Partners' Equity:
Limited Partners (10,395 units for
Series 7, 9,980 for Series 8,
6,254 for Series 9, 5,043 for
Series 10 and 5,127 for Series 11
at June 30, 1996 and March 31, 1996) 5,793,031 6,042,156
General Partners (33,684) (31,168)
----------- ----------
Total Partners' Equity 5,759,347 6,010,988
----------- ----------
Total Liabilities and
Partners Equity $5,965,504 $6,203,282
=========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
JUNE 30, MARCH 31,
1996 1996
----------- ----------
SERIES 8 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 320,389 $ 295,021
Investments in Securities 37,876 37,407
Receivable from Project Partnerships 0 76,027
----------- ----------
Total Current Assets 358,265 408,455
Investments in Securities 420,238 413,585
Investments in Project
Partnerships, Net 5,490,702 5,658,160
----------- ----------
Total Assets $6,269,205 $6,480,200
=========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 38,651 $ 43,617
Payable to Project Partnerships 0 0
----------- ----------
Total Current Liabilities 38,651 43,617
Long-Term Liabilities:
Payable to General Partners 175,662 155,249
Partners' Equity:
Limited Partners (10,395 units for
Series 7, 9,980 for Series 8,
6,254 for Series 9, 5,043 for
Series 10 and 5,127 for Series 11
at June 30, 1996 and March 31, 1996) 6,081,968 6,306,146
General Partners (27,076) (24,812)
---------- ----------
Total Partners' Equity 6,054,892 6,281,334
----------- ----------
Total Liabilities and
Partners Equity $6,269,205 $6,480,200
=========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
JUNE 30, MARCH 31,
1996 1996
----------- ----------
SERIES 9 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 112,210 $ 112,252
Investments in Securities 26,278 25,978
Receivable from Project Partnerships 8,545 8,545
----------- ----------
Total Current Assets 147,033 146,775
Investments in Securities 284,675 280,586
Investments in Project
Partnerships, Net 4,274,704 4,397,301
----------- ----------
Total Assets $4,706,412 $4,824,662
=========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 22,083 $ 25,016
Payable to Project Partnerships 0 0
----------- ----------
Total Current Liabilities 22,083 25,016
Long-Term Liabilities:
Payable to General Partners 89,511 78,117
Partners' Equity:
Limited Partners (10,395 units for
Series 7, 9,980 for Series 8,
6,254 for Series 9, 5,043 for
Series 10 and 5,127 for Series 11
at June 30, 1996 and March 31, 1996) 4,603,707 4,729,151
General Partners (8,889) (7,622)
----------- ----------
Total Partners' Equity 4,594,818 4,721,529
----------- ----------
Total Liabilities and
Partners Equity $4,706,412 $4,824,662
=========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
JUNE 30, MARCH 31,
1996 1996
----------- ----------
SERIES 10 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 176,006 $ 162,576
Investments in Securities 19,382 19,125
Receivable from Project Partnerships 0 13,059
----------- ----------
Total Current Assets 195,388 194,760
Investments in Securities 224,236 220,599
Investments in Project
Partnerships, Net 3,735,356 3,788,041
----------- ----------
Total Assets $4,154,980 $4,203,400
=========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 26,390 $ 28,549
Payable to Project Partnerships 7,713 7,713
----------- ----------
Total Current Liabilities 34,103 36,262
Long-Term Liabilities:
Payable to General Partners 25,449 18,327
Partners' Equity:
Limited Partners (10,395 units for
Series 7, 9,980 for Series 8,
6,254 for Series 9, 5,043 for
Series 10 and 5,127 for Series 11
at June 30, 1996 and March 31, 1996) 4,098,654 4,151,503
General Partners (3,226) (2,592)
----------- ----------
Total Partners' Equity 4,095,428 4,148,811
----------- ----------
Total Liabilities and
Partners Equity $4,154,980 $4,203,400
=========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
JUNE 30, MARCH 31,
1996 1996
----------- ----------
SERIES 11 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 216,654 $ 365,027
Investments in Securities 19,291 18,995
Receivable from Project Partnerships 0 8,250
----------- ----------
Total Current Assets 235,945 392,272
Investments in Securities 234,334 230,179
Investments in Project
Partnerships, Net 4,360,965 4,340,316
----------- ----------
Total Assets $4,831,244 $4,962,767
=========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 26,200 $ 32,148
Payable to Project Partnerships 129,887 279,887
----------- ----------
Total Current Liabilities 156,087 312,035
Long-Term Liabilities:
Payable to General Partners 9,403 3,707
Partners' Equity:
Limited Partners (10,395 units for
Series 7, 9,980 for Series 8,
6,254 for Series 9, 5,043 for
Series 10 and 5,127 for Series 11
at June 30, 1996 and March 31, 1996) 4,665,088 4,646,546
General Partners 666 479
----------- ----------
Total Partners' Equity 4,665,754 4,647,025
----------- ---------
Total Liabilities and
Partners Equity $4,831,244 $4,962,767
=========== =========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
JUNE 30, MARCH 31,
1996 1996
----------- ----------
TOTAL SERIES 7 - 11 (Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $1,079,401 $1,194,658
Investments in Securities 145,551 143,694
Receivable from Project Partnerships 8,545 105,881
----------- ----------
Total Current Assets 1,233,497 1,444,233
Investments in Securities 1,607,191 1,581,278
Investments in Project
Partnerships, Net 23,086,657 23,648,800
----------- ----------
Total Assets $25,927,345 $26,674,311
=========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 161,676 $ 182,335
Payable to Project Partnerships 137,600 287,600
----------- ----------
Total Current Liabilities 299,276 469,935
Long-Term Liabilities:
Payable to General Partners 457,860 394,689
Partners' Equity:
Limited Partners (10,395 units for
Series 7, 9,980 for Series 8,
6,254 for Series 9, 5,043 for
Series 10 and 5,127 for Series 11
at June 30, 1996 and March 31, 1996) 25,242,488 25,875,502
General Partners (72,209) (65,815)
----------- -----------
Total Partners' Equity 25,170,239 25,809,687
----------- ----------
Total Liabilities and
Partners Equity $25,927,345 $26,674,311
=========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 7 ----------- ----------
Revenues:
Interest Income $ 10,881 $ 17,606
----------- ----------
Expenses:
Asset Management Fee-
General Partner 19,500 19,000
General and Administrative-
General Partner 2,950 3,861
General and Administrative-
Other 3,702 4,209
Amortization 5,460 5,647
----------- ----------
Total Expenses 31,612 32,717
Loss Before Equity in Losses of
Project Partnerships (20,731) (15,111)
Equity in Losses of Project
Partnerships (230,910) (278,001)
----------- ----------
Net Loss $ (251,641) $ (293,112)
=========== ==========
Allocation of Net Loss:
Limited Partners $ (249,125) $ (290,181)
General Partners (2,516) (2,931)
----------- ----------
$ (251,641) $ (293,112)
=========== ==========
Net Loss Per Limited
Partnership Unit $ (23.97) $ (27.92)
Number of Limited
Partnership Units Outstanding 10,395 10,395
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 8 ----------- ----------
Revenues:
Interest Income $ 11,328 $ 10,943
----------- ----------
Expenses:
Asset Management Fee-
General Partner 21,500 21,500
General and Administrative-
General Partner 3,253 4,382
General and Administrative-
Other 3,927 4,196
Amortization 2,315 2,449
----------- ----------
Total Expenses 30,995 32,527
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (19,667) (21,584)
Equity in Losses of Project
Partnerships (206,775) (128,039)
----------- ----------
Net Loss $(226,442) $ (149,623)
=========== ==========
Allocation of Net Loss:
Limited Partners $(224,178) $ (148,127)
General Partners (2,264) (1,496)
----------- ----------
$(226,442) $ (149,623)
=========== ==========
Net Loss Per Limited
Partnership Unit $ (22.46) $ (14.84)
Number of Limited
Partnership Units Outstanding 9,980 9,980
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 9 ----------- ----------
Revenues:
Interest Income $ 5,669 $ 9,342
----------- ----------
Expenses:
Asset Management Fee-
General Partner 12,000 12,000
General and Administrative-
General Partner 1,816 2,446
General and Administrative-
Other 2,128 2,510
Amortization 1,779 1,566
----------- ----------
Total Expenses 17,723 18,522
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (12,054) (9,180)
Equity in Losses of Project
Partnerships (114,657) (15,452)
----------- ----------
Net Loss $ (126,711) $ (24,632)
=========== ==========
Allocation of Net Loss:
Limited Partners $ (125,444) $ (24,386)
General Partners (1,267) (246)
----------- ----------
$ (126,711) $ (24,632)
=========== ==========
Net Loss Per Limited
Partnership Unit $ (20.06) $ (3.90)
Number of Limited
Partnership Units Outstanding 6,254 6,254
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 10 ----------- ----------
Revenues:
Interest Income $ 7,008 $ 7,583
----------- ----------
Expenses:
Asset Management Fee-
General Partner 7,500 7,500
General and Administrative-
General Partner 1,134 1,526
General and Administrative-
Other 1,455 1,809
Amortization 1,460 1,395
----------- ----------
Total Expenses 11,549 12,230
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (4,541) (4,647)
Equity in Losses of Project
Partnerships (48,842) 14,944
----------- ----------
Net Loss $ (53,383) $ 10,297
=========== ==========
Allocation of Net Loss:
Limited Partners $ (52,849) $ 10,194
General Partners (534) 103
----------- ----------
$ (53,383) $ 10,297
=========== ==========
Net Loss Per Limited
Partnership Unit $ (10.48) $ 2.02
Number of Limited
Partnership Units Outstanding 5,043 5,043
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 11 ----------- ----------
Revenues:
Interest Income $ 8,604 $ 24,805
----------- ----------
Expenses:
Asset Management Fee-
General Partner 6,000 4,500
General and Administrative-
General Partner 905 706
General and Administrative-
Other 1,268 1,323
Amortization 1,862 654
----------- ----------
Total Expenses 10,035 7,183
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (1,431) 17,622
Equity in Losses of Project
Partnerships 20,160 14,359
----------- ----------
Net Loss $ 18,729 $ 31,981
=========== ==========
Allocation of Net Loss:
Limited Partners $ 18,542 $ 31,661
General Partners 187 320
----------- ----------
$ 18,729 $ 31,981
=========== ==========
Net Loss Per Limited
Partnership Unit $ 3.62 $ 6.18
Number of Limited
Partnership Units Outstanding 5,127 5,127
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
TOTAL SERIES 7 - 11 ----------- ----------
Revenues:
Interest Income $ 43,490 $ 70,279
----------- ----------
Expenses:
Asset Management Fee-
General Partner 66,500 64,500
General and Administrative-
General Partner 10,058 12,921
General and Administrative-
Other 12,480 14,047
Amortization 12,876 11,711
----------- ----------
Total Expenses 101,914 103,179
----------- ----------
Loss Before Equity in Losses of
Project Partnerships (58,424) (32,900)
Equity in Losses of Project
Partnerships (581,024) (392,189)
----------- ----------
Net Loss $ (639,448) $ (425,089)
=========== ==========
Allocation of Net Loss:
Limited Partners $ (633,054) $ (420,839)
General Partners (6,394) (4,250)
----------- ----------
$ (639,448) $ (425,089)
=========== ==========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
General
Limited Partners' Total
Partners' Equity Partners'
Equity (Deficit) Equity
SERIES 7 ----------- ----------- -----------
Balance at
March 31, 1995 $ 7,046,659 $ (21,021) $ 7,025,638
Net Loss (290,181) (2,931) (293,112)
----------- ---------- -----------
Balance at
June 30, 1995 $ 6,756,478 $ (23,952) $ 6,732,526
=========== ========== ===========
Balance at
March 31, 1996 $ 6,042,156 $ (31,168) $ 6,010,988
Net Loss (249,125) (2,516) (251,641)
----------- ---------- -----------
Balance at
June 30, 1996 $ 5,793,031 $ (33,684) $ 5,759,347
=========== ========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
General
Limited Partners' Total
Partners' Equity Partners'
Equity (Deficit) Equity
SERIES 8 ----------- ----------- -----------
Balance at
March 31, 1995 $ 7,495,677 $ (12,797) $ 7,482,880
Net Loss (148,127) (1,496) (149,623)
----------- ---------- -----------
Balance at
June 30, 1995 $ 7,347,550 $ (14,293) $ 7,333,257
=========== ========== ===========
Balance at
March 31, 1996 $ 6,306,146 $ (24,812) $ 6,281,334
Net Loss (224,178) (2,264) (226,442)
----------- ---------- -----------
Balance at
June 30, 1996 $ 6,081,968 $ (27,076) $ 6,054,892
=========== ========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
General
Limited Partners' Total
Partners' Equity Partners'
Equity (Deficit) Equity
SERIES 9 ----------- ----------- -----------
Balance at
March 31, 1995 $ 5,228,817 $ (2,575) $ 5,226,242
Net Loss (24,386) (246) (24,632)
----------- ---------- -----------
Balance at
June 30, 1995 $ 5,204,431 $ (2,821) $ 5,201,610
=========== ========== ===========
Balance at
March 31, 1996 $ 4,729,151 $ (7,622) $ 4,721,529
Net Loss (125,444) (1,267) (126,711)
----------- ---------- -----------
Balance at
June 30, 1996 $ 4,603,707 $ (8,889) $ 4,594,818
=========== ========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
General
Limited Partners' Total
Partners' Equity Partners'
Equity (Deficit) Equity
SERIES 10 ----------- ----------- -----------
Balance at
March 31, 1995 $ 4,338,647 $ (802) $ 4,337,845
Net Loss 10,194 103 10,297
----------- ---------- -----------
Balance at
June 30, 1995 $ 4,348,841 $ (699) $ 4,348,142
=========== ========== ===========
Balance at
March 31, 1996 $ 4,151,503 $ (2,692) $ 4,148,811
Net Loss (52,849) (534) (53,383)
----------- ---------- -----------
Balance at
June 30, 1996 $ 4,098,654 $ (3,226) $ 4,095,428
=========== ========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
General
Limited Partners' Total
Partners' Equity Partners'
Equity (Deficit) Equity
SERIES 11 ----------- ----------- -----------
Balance at
March 31, 1995 $ 4,800,616 $ 1,564 $ 4,802,180
Net Loss 31,661 320 31,981
----------- ---------- -----------
Balance at
June 30, 1995 $ 4,832,277 $ 1,884 $ 4,834,161
=========== ========== ===========
Balance at
March 31, 1996 $ 4,646,546 $ 479 $ 4,647,025
Net Loss 18,542 187 18,729
----------- ---------- -----------
Balance at
June 30, 1996 $ 4,665,088 $ 666 $ 4,665,754
=========== ========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
General
Limited Partners' Total
Partners' Equity Partners'
Equity (Deficit) Equity
TOTAL SERIES 7 - 11 ----------- ----------- -----------
Balance at
March 31, 1995 $28,910,416 $ (35,631) $28,874,785
Net Loss (420,839) (4,250) (425,089)
----------- ---------- -----------
Balance at
June 30, 1995 $28,489,577 $ (39,881) $28,449,696
=========== ========== ===========
Balance at
March 31, 1996 $25,875,502 $ (65,815) $25,809,687
Net Loss (633,054) (6,394) (639,448)
----------- ---------- -----------
Balance at
June 30, 1996 $25,242,448 $ (72 209) $25,170,239
=========== ========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 7 ----------- ---------
Cash Flows from Operating Activities:
Net Income (Loss) $ (251,641) $ (293,112)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by (Used in)
Operating Activities:
Amortization 5,460 5,647
Accreted Interest Income
on Investments in Securities (7,914) (7,850)
Equity in Losses of
Project Partnerships 230,910 278,001
Interest Income from
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 13,863 14,502
----------- ---------
Net Cash Provided by (Used in)
Operating Activities (9,322) (2,812)
---------- ---------
Cash Flows from Investing Activities:
Investments in Project Partnerships (3,332) 28,818
(Increase) Decrease in Receivable
from Project Partnerships 0 0
Acquisition Fees and Expenses (272) (991)
Distributions Received from
Project Partnerships 7,286 2,347
Increase (Decrease) in Payable -
General Partners - Acquisition Fees 0 0
Project Partnerships 0 0
----------- ---------
Net Cash Provided by (Used in)
Investing Activities 3,682 30,174
----------- ---------
Increase (Decrease) in Cash and
Cash Equivalents (5,640) 27,362
Cash and Cash Equivalents at
Beginning of Year 259,782 656,686
----------- ---------
Cash and Cash Equivalents at
End of Year $ 254,142 $ 684,048
=========== =========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 8 ----------- ---------
Cash Flows from Operating Activities:
Net Income (Loss) $ (226,442) $ (149,623)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by (Used in)
Operating Activities:
Amortization 2,315 2,449
Accreted Interest Income
on Investments in Securities (7,121) (7,080)
Equity in Losses of
Project Partnerships 206,775 128,039
Interest Income from
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 15,447 16,657
----------- ---------
Net Cash Provided by (Used in)
Operating Activities (9,026) (9,558)
---------- ---------
Cash Flows from Investing Activities:
Investments in Project Partnerships (54,070) 20,897
(Increase) Decrease in Receivable
from Project Partnerships 76,027 0
Acquisition Fees and Expenses 0 0
Distributions Received from
Project Partnerships 12,437 0
Increase (Decrease) in Payable -
General Partners - Acquisition Fees 0 0
Project Partnerships 0 (99,393)
----------- ---------
Net Cash Provided by (Used in)
Investing Activities 34,394 (78,496)
----------- ---------
Increase (Decrease) in Cash and
Cash Equivalents 25,368 (88,054)
Cash and Cash Equivalents at
Beginning of Year 295,021 343,908
----------- ---------
Cash and Cash Equivalents at
End of Year $ 320,389 $ 255,854
=========== =========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 9 ---------- ---------
Cash Flows from Operating Activities:
Net Income (Loss) $ (126,711) $ (24,632)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by (Used in)
Operating Activities:
Amortization 1,779 1,566
Accreted Interest Income
on Investments in Securities (4,389) (4,398)
Equity in Losses of
Project Partnerships 114,657 15,452
Interest Income from
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 8,461 9,185
----------- ---------
Net Cash Provided by (Used in)
Operating Activities (6,203) (2,827)
---------- ---------
Cash Flows from Investing Activities:
Investments in Project Partnerships 0 0
(Increase) Decrease in Receivable
from Project Partnerships 0 14,382
Acquisition Fees and Expenses 0 (5,124)
Distributions Received from
Project Partnerships 6,161 1,200
Increase (Decrease) in Payable -
General Partners - Acquisition Fees 0 5,124
Project Partnerships 0 (99,658)
----------- ---------
Net Cash Provided by (Used in)
Investing Activities 6,161 (84,076)
----------- ---------
Increase (Decrease) in Cash and
Cash Equivalents (42) (86,903)
Cash and Cash Equivalents at
Beginning of Year 112,252 386,116
----------- ---------
Cash and Cash Equivalents at
End of Year $ 112,210 $ 299,213
=========== =========
See accompanying notes to financial statements.<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 10 ---------- ---------
Cash Flows from Operating Activities:
Net Income (Loss) $ (53,383) $ 10,297
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by (Used in)
Operating Activities:
Amortization 1,460 1,395
Accreted Interest Income
on Investments in Securities (3,894) (3,862)
Equity in Losses of
Project Partnerships 48,842 (14,944)
Interest Income from
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 4,963 3,900
----------- ---------
Net Cash Provided by (Used in)
Operating Activities (2,012) (3,214)
---------- ---------
Cash Flows from Investing Activities:
Investments in Project Partnerships 0 (8,198)
(Increase) Decrease in Receivable
from Project Partnerships 13,059 (20,094)
Acquisition Fees and Expenses 0 (160)
Distributions Received from
Project Partnerships 2,383 0
Increase (Decrease) in Payable -
General Partners - Acquisition Fees 0 0
Project Partnerships 0 (56,095)
----------- ---------
Net Cash Provided by (Used in)
Investing Activities 15,442 (84,547)
----------- ---------
Increase (Decrease) in Cash and
Cash Equivalents 13,430 (87,761)
Cash and Cash Equivalents at
Beginning of Year 162,576 318,131
----------- ---------
Cash and Cash Equivalents at
End of Year $ 176,006 $ 230,370
=========== =========
See accompanying notes to financial statements.<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
SERIES 11 ---------- ---------
Cash Flows from Operating Activities:
Net Income (Loss) $ 18,729 $ 31,981
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by (Used in)
Operating Activities:
Amortization 1,862 654
Accreted Interest Income
on Investments in Securities (4,452) (4,392)
Equity in Losses of
Project Partnerships (20,160) (14,359)
Interest Income from
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners (251) (55,489)
----------- ---------
Net Cash Provided by (Used in)
Operating Activities (4,272) (41,605)
---------- ---------
Cash Flows from Investing Activities:
Investments in Project Partnerships (2,173) (60,273)
(Increase) Decrease in Receivable
from Project Partnerships 8,250 0
Acquisition Fees and Expenses (178) (20,571)
Distributions Received from
Project Partnerships 0 0
Increase (Decrease) in Payable -
General Partners - Acquisition Fees 0 3,684
Project Partnerships (150,000) 30,361
----------- ---------
Net Cash Provided by (Used in)
Investing Activities (144,101) (47,249)
----------- ---------
Increase (Decrease) in Cash and
Cash Equivalents (148,373) (88,854)
Cash and Cash Equivalents at
Beginning of Year 365,027 1,598,884
----------- ---------
Cash and Cash Equivalents at
End of Year $ 216,654 $1,510,030
=========== =========
See accompanying notes to financial statements.<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995:
1996 1995
TOTAL SERIES 7 - 11 ---------- ---------
Cash Flows from Operating Activities:
Net Income (Loss) $ (639,448) $ (425,089)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by (Used in)
Operating Activities:
Amortization 12,876 11,711
Accreted Interest Income
on Investments in Securities (27,770) (27,582)
Equity in Losses of
Project Partnerships 581,024 392,189
Interest Income from
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 42,483 (11,245)
----------- ---------
Net Cash Provided by (Used in)
Operating Activities (30,835) (60,016)
---------- ---------
Cash Flows from Investing Activities:
Investments in Project Partnerships (59,575) (19,206)
(Increase) Decrease in Receivable
from Project Partnerships 97,336 (5,712)
Acquisition Fees and Expenses (450) (26,846)
Distributions Received from
Project Partnerships 28,267 3,547
Increase (Decrease) in Payable -
General Partners - Acquisition Fees 0 8,808
Project Partnerships (150,000) (224,785)
----------- ---------
Net Cash Provided by (Used in)
Investing Activities (84,422) (264,194)
----------- ---------
Increase (Decrease) in Cash and
Cash Equivalents (115,257) (324,210)
Cash and Cash Equivalents at
Beginning of Year 1,194,658 3,303,725
----------- ---------
Cash and Cash Equivalents at
End of Year $ 1,079,401 $2,979,515
=========== =========
See accompanying notes to financial statements.<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
June 30, 1996
NOTE 1 - ORGANIZATION:
Gateway Tax Credit Fund III Ltd. ("Gateway"), a Florida Limited
Partnership, was formed October 17, 1991 under the laws of Florida.
Gateway offered its limited partnership interests in Series. The
first Series for Gateway is Series 7. Operations commenced on July
16, 1992 for Series 7, January 4, 1993 for Series 8, September 30,
1993 for Series 9, January 21, 1994 for Series 10 and April 29,
1994 for Series 11. Each Series invests, as a limited partner, in
other limited partnerships ("Project Partnerships"), each of which
owns and operates apartment complexes eligible for Low-Income
Housing Tax Credits ("Tax Credits"), provided for in Section 42 of
the Internal Revenue Code of 1986. Gateway will terminate on
December 31, 2040 or sooner, in accordance with the terms of the
Limited Partnership Agreement. Gateway received capital
contributions of $1,000 from the General Partners and $36,799,000
from the investor Limited Partners.
Raymond James Partners, Inc. and RJ Credit Partners, Inc.,
wholly-owned subsidiaries of Raymond James Financial, Inc., are the
General Partner and Managing General Partner, respectively. The
Managing General Partner manages and controls the business of
Gateway.
Gateway received capital contributions of $10,395,000,
$9,980,000, $6,254,000, $5,043,000 and $5,127,000 from the investor
Limited Partners in Series 7, 8, 9, 10 and 11, respectively. Each
Series is treated as though it were a separate partnership,
investing in a separate and distinct pool of Project Partnerships.
Income or loss and all tax items from the Project Partnerships
acquired by each Series are specifically allocated among the
limited partners of such Series.
Operating profits and losses, cash distributions from operations
and Tax Credits from each Series are allocated 99% to the Limited
Partners in that Series and 1% to the General Partners. Profit or
loss and cash distributions from sales of property by each Series
are allocated as formulated in the Limited Partnership Agreement.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounting
Gateway utilizes an accrual basis of accounting whereby revenues
are recognized as earned and expenses are recognized as obligations
are incurred.
Gateway accounts for its investments as the limited partner in
Project Partnerships ("Investments in Project Partnerships") using
the equity method of accounting and reports the equity in losses of
the Project Partnerships on a 3-month lag in the Statement of
Operations. Under the equity method, the Investments in Project
Partnerships initially include:
1) Gateway's capital contribution,
2) Acquisition fees paid to the General Partner for services
rendered in selecting properties for acquisition, and
3) Acquisition expenses including legal fees, travel and
other miscellaneous costs relating to acquiring properties.
Quarterly the Investments in Project Partnerships are increased or
decreased as follows:
1) Increased for equity in income or decreased for equity in
losses of the Project Partnerships,
2) Decreased for cash distributions received from the Project
Partnerships,
3) Decreased for the amortization of the acquisition fees and
expenses,
4) In certain Project Partnerships, where Gateway's
investment was greater than Gateway's pro-rata share of the
book value of the underlying assets, decreased for the
amortization of the difference; and
5) In certain Project Partnerships, where Gateway's investment
was less than Gateway's pro-rata share of the book value of the
underlying assets, increased for the accretion of the
difference.
Amortization and accretion is calculated on a straight line basis
over 35 years, as this is the average estimated useful life of the
underlying assets. The net amortization and accretion is shown as
amortization expense on the Statements of Operations.
Pursuant to the limited partnership agreements for the Project
Partnerships, cash losses generated by the Project Partnerships are
allocated to the general partners of those partnerships. In
subsequent years, cash profits, if any, are first allocated to the
general partners to the extent of the allocation of prior years'
cash losses.
Since Gateway invests as a limited partner, and therefore is not
obligated to fund losses or make additional capital contributions,
it does not recognize losses from individual Project Partnerships
to the extent that these losses would reduce the investment in
those Project Partnerships below zero. The suspended losses will
be used to offset future income from the individual Project
Partnerships.
Cash and Cash Equivalents
It is Gateway's policy to include short-term investments with
an original maturity of three months or less in Cash and Cash
Equivalents. Short-term investments are comprised of money market
mutual funds.
Concentrations of Credit Risk
Financial instruments which potentially subject Gateway to
concentrations of credit risk consist of cash investments in a
money market mutual fund that is a wholly-owned subsidiary of
Raymond James Financial, Inc.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires the use of
estimates that affect certain reported amounts and disclosures.
These estimates are based on management's knowledge and experience.
Accordingly, actual results could differ from these estimates.
Investment in Securities
Effective April 1, 1994, Gateway adopted Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities ("FAS 115"). Under FAS 115, Gateway is
required to categorize its debt securities as held-to-maturity,
available-for-sale or trading securities, dependent upon Gateway's
intent in holding the securities. Gateway's intent is to hold all
of its debt securities (U. S. Treasury Security Strips) until
maturity and to use these reserves to fund Gateway's ongoing
operations. Interest income is recognized ratably on the U.S.
Treasury Strips using the effective yield to maturity.
Receivable from Project Partnerships
Receivable from Project Partnerships represents amounts due from
the Project Partnerships due to a change in the amount Gateway
agreed to pay the Project Partnerships and is secured with cash in
restricted escrow accounts.
Offering and Commission Costs
Offering and commission costs are charged against Limited
Partners' Equity upon admission of Limited Partners.
Income Taxes
No provision for income taxes has been made in these financial
statements, as income taxes are a liability of the partners rather
than of Gateway.
Fair Value of Financial Instruments
The fair value of investment securities is discussed in Note 3.
The fair value of current assets and current liabilities is assumed
to be equal to their reported carrying amounts due to their short
term nature. It is not practicable to estimate the fair value of
the long term payable to the general partner because it is
attributable to a related party transaction for which there would
be no fair market equivalent.
Basis of Preparation
The unaudited financial statements presented herein have been
prepared in accordance with the instructions to Form 10-Q and do
not include all of the information and note disclosures required by
generally accepted accounting principles. These statements should
be read in conjunction with the financial statements and notes
thereto included with the Partnership's Form 10-K for the year
ended March 31, 1996. In the opinion of management these financial
statements include adjustments, consisting only of normal recurring
adjustments, necessary to fairly summarize the Partnership's
financial position and results of operations. The results of
operations for the periods may not be indicative of the results to
be expected for the year.
NOTE 3 - INVESTMENT IN SECURITIES:
The June 30, 1996 Balance Sheet includes Investment in Securities
consisting of U.S. Treasury Security Strips which represents their
cost, plus accreted interest income of $106,214 for Series 7,
$85,048 for Series 8, $42,528 for Series 9, $33,734 for Series 10
and $34,905 for Series 11.
<PAGE>
Estimated Cost Plus Gross Unrealized
Market Accreted Gains and
Value Accreted Interest (Losses)
----------- ----------------- ---------------
Series 7 $ 495,165 $486,432 $ 8,733
Series 8 456,444 458,114 (1,670)
Series 9 297,464 310,953 (13,489)
Series 10 243,903 243,618 285
Series 11 263,752 253,625 10,127
As of June 30, 1996 the cost and accreted interest of debt
securities by contractual maturities is as follows:
Series 7 Series 8 Series 9
---------- ---------- ----------
Due within 1 year $ 42,724 $ 37,876 $ 26,278
After 1 year
through 5 years 171,100 157,170 101,748
After 5 years
through 10 years 199,329 190,144 118,083
After 10 years 73,279 72,924 64,844
---------- ---------- ----------
Total Amount Carried on
Balance Sheet $ 486,432 $ 458,114 $ 310,953
========== ========== ==========
Series 10 Series 11 Total
---------- ---------- ----------
Due within 1 year $ 19,382 $ 19,291 $ 145,551
After 1 year
through 5 years 78,773 76,195 584,986
After 5 years
through 10 years 84,912 92,185 684,653
After 10 years 60,551 65,954 337,552
---------- ---------- ----------
Total Amount Carried on
Balance Sheet $ 243,618 $ 253,625 $1,752,742
========== ========== ==========
NOTE 4 - RELATED PARTY TRANSACTIONS:
The Payable to General Partners primarily represents the asset
management fees owed to the General Partners at the end of the
period. It is unsecured, due on demand and, in accordance with the
limited partnership agreement, non-interest bearing. Within the
next twelve months, the Managing General Partner does not intend to
demand payment on the portion of Asset Management fees payable
classified as long-term on the balance sheet.
The Payable to Project Partnerships represents unpaid capital
contributions to the Project Partnerships and will be paid after
certain performance criteria are met. Such contributions are in
turn payable to the general partners of the Project Partnerships.
For the periods ended June 30, 1996 and 1995 the General Partners
and affiliates are entitled to compensation and reimbursement for
costs and expenses incurred by Gateway as follows:
Acquisition Fees - Acquisition fees are paid for services
rendered by the Managing General Partner in selecting properties
for acquisition and providing other services in connection with the
acquisition of interests in Project Partnerships. The acquisition
fees paid or payable to the General Partners will not exceed the
amount that is equal to 8% of the gross proceeds. For Series 11
the fees will not exceed an amount that is equal to 5% of the gross
proceeds. The fees paid are included in Investments in Project
Partnerships on the Balance Sheet.
June 30, June 30,
1996 1995
----------- -----------
Series 7 $ 0 $ 0
Series 8 0 0
Series 9 0 5,124
Series 10 0 1,496
Series 11 0 6,983
---------- ----------
Total $ 0 $ 13,603
========== ==========
Acquisition Expenses - Affiliates of the General Partners are
reimbursed for acquisition expenses incurred on behalf of Gateway.
These expenses are included in Investments in Project Partnerships
on the Balance Sheet.
June 30, June 30,
1996 1995
---------- ----------
Series 7 $ 272 $ 991
Series 8 0 0
Series 9 0 0
Series 10 0 (1 336)
Series 11 178 13,588
---------- ----------
Total $ 450 $ 13,243
========== ==========
Asset Management Fee - The Managing General Partner is entitled
to receive an annual asset management fee equal to the greater of
(i) $2,000 for each limited partnership in which Gateway invests,
or (ii) 0.275% of Gateway's gross proceeds from the sale of limited
partnership interests. In either event (i) or (ii), the maximum
amount may not exceed 0.2% of the aggregate cost (Gateway's capital
contribution plus Gateway's share of the Properties' mortgage) of
Gateway's interest in properties owned by the Project Partnerships.
The asset management fee will be paid only after all other expenses
of Gateway have been paid. These fees are included in the
Statement of Operations.
June 30, June 30,
1996 1995
---------- ----------
Series 7 $ 19,500 $ 19,000
Series 8 21,500 21,500
Series 9 12,000 12,000
Series 10 7,500 7,500
Series 11 6,000 4,500
---------- ----------
Total $ 66,500 $ 64,500
========== ==========
General and Administrative Expenses - The Managing General
Partner is reimbursed for general and administrative expenses of
Gateway on an accountable basis. This expense is included in the
Statement of Operations.
June 30, June 30,
1996 1995
---------- ----------
Series 7 $ 2,950 $ 3,861
Series 8 3,253 4,382
Series 9 1,816 2,446
Series 10 1,134 1,526
Series 11 905 706
---------- ----------
Total $ 10,058 $ 12,921
========== ==========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:
As of June 30, 1996, the Partnership had acquired an interest in
39 Project Partnerships for the Series which own and operate
government assisted multi-family housing complexes. The
Partnership, as the Investor Limited Partner pursuant to the
Project Partnership Agreements has generally acquired an ownership
interest of 99% in these Project Partnerships.
The following is a summary of Investments in Project Partnerships
as of:
JUNE 30, MARCH 31,
1996 1996
SERIES 7 ---------- ----------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 7,732,089 $ 7,728,757
Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1) 848 644
Cumulative equity in losses of
Project Partnerships (3,167,661) (2,936,751)
Cumulative distributions received
from Project Partnerships (47,312) (40,026)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 793,335 793,063
Accumulated amortization of
acquisition fees and expenses (86,369) (80,705)
---------- ----------
Investments in
Project Partnerships $5,224,930 $5,464,982
========== ==========
(1) Includes amounts representing accumulated accretion or
(amortization of the difference between the book value of the
underlying assets of the Project Partnerships over or under the
purchase price. At June 30, 1996 and March 31, 1996 these excess
costs were $28,498.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1996, the Partnership had acquired an interest in
43 Project Partnerships for the Series which own and operate
government assisted multi-family housing complexes. The
Partnership, as the Investor Limited Partner pursuant to the
Project Partnership Agreements has generally acquired an ownership
interest of 99% in these Project Partnerships.
The following is a summary of Investments in Project Partnerships
as of:
JUNE 30, MARCH 31,
1996 1996
SERIES 8 ---------- ----------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 7,640,628 $ 7,586,558
Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1) 1,784 1,607
Cumulative equity in losses of
Project Partnerships (2,615,576) (2,408,801)
Cumulative distributions received
from Project Partnerships (40,373) (27,936)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 549,773 549,773
Accumulated amortization of
acquisition fees and expenses (45,534) (43,041)
---------- ----------
Investments in
Project Partnerships $5,490,702 $5,658,160
========== ==========
(1) Includes amounts representing accumulated accretion or
(amortization of the difference between the book value of the
underlying assets of the Project Partnerships over or under the
purchase price. At June 30, 1996 and March 31, 1996 these excess
costs were $24,830.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1996, the Partnership had acquired an interest in
24 Project Partnerships for the Series which own and operate
government assisted multi-family housing complexes. The
Partnership, as the Investor Limited Partner pursuant to the
Project Partnership Agreements has generally acquired an ownership
interest of 99% in these Project Partnerships.
The following is a summary of Investments in Project Partnerships
as of:
JUNE 30, MARCH 31,
1996 1996
SERIES 9 ---------- ----------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 4,932,192 $ 4,932,192
Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1) 835 871
Cumulative equity in losses of
Project Partnerships (860,080) (745,423)
Cumulative distributions received
from Project Partnerships (24,570) (18,409)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 244,087 244,087
Accumulated amortization of
acquisition fees and expenses (17,760) (16,017)
---------- ----------
Investments in
Project Partnerships $4,274,704 $4,397,301
========== ==========
(1) Includes amounts representing accumulated accretion or
(amortization of the difference between the book value of the
underlying assets of the Project Partnerships over or under the
purchase price. At June 30, 1996 and March 31, 1996 these excess
costs were ($5,076).
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1996, the Partnership had acquired an interest in
15 Project Partnerships for the Series which own and operate
government assisted multi-family housing complexes. The
Partnership, as the Investor Limited Partner pursuant to the
Project Partnership Agreements has generally acquired an ownership
interest of 99% in these Project Partnerships.
The following is a summary of Investments in Project Partnerships
as of:
JUNE 30, MARCH 31,
1996 1996
SERIES 10 ---------- ----------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 3,914,673 $ 3,914,673
Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1) (336) (282)
Cumulative equity in losses of
Project Partnerships (338,770) (289,928)
Cumulative distributions received
from Project Partnerships (23,395) (21,012)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 196,738 196,738
Accumulated amortization of
acquisition fees and expenses (13,554) (12,148)
---------- ----------
Investments in
Project Partnerships $3,735,356 $3,788,041
========== ==========
(1) Includes amounts representing accumulated accretion or
(amortization of the difference between the book value of the
underlying assets of the Project Partnerships over or under the
purchase price. At June 30, 1996 and March 31, 1996 these excess
costs were ($9,822).
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1996, the Partnership had acquired an interest in
12 Project Partnerships for the Series which own and operate
government assisted multi-family housing complexes. The
Partnership, as the Investor Limited Partner pursuant to the
Project Partnership Agreements has generally acquired an ownership
interest of 99% in these Project Partnerships.
The following is a summary of Investments in Project Partnerships
as of:
JUNE 30, MARCH 31,
1996 1996
SERIES 11 ---------- ----------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 4,205,640 $ 4,203,467
Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1) 968 758
Cumulative equity in losses of
Project Partnerships (124,034) (144,194)
Cumulative distributions received
from Project Partnerships 0 0
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 290,335 290,157
Accumulated amortization of
acquisition fees and expenses (11,944) (9,872)
---------- ----------
Investments in
Project Partnerships $4,360,965 $4,340,316
========== ==========
(1) Includes amounts representing accumulated accretion or
(amortization of the difference between the book value of the
underlying assets of the Project Partnerships over or under the
purchase price. At June 30, 1996 and March 31, 1996 these excess
costs were $29,433.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project
Partnerships:
JUNE 30, MARCH 31,
1996 1996
TOTAL SERIES 7 - 11 ---------- ----------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 28,425,222 $ 28,365,647
Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets 4,099 3,598
Cumulative equity in losses of
Project Partnerships (7,106,121) (6,525,097)
Cumulative distributions received
from Project Partnerships (135,650) (107,383)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 2,074,268 2,073,818
Accumulated amortization of
acquisition fees and expenses (175,161) (161,783)
---------- ----------
Investments in
Project Partnerships $23,086,657 $23,648,800
========== ==========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Series'
Project Partnerships as of March 31 of each year:
1996 1995
SERIES 7 ----------- ----------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,324,412 $ 1,798,945
Investment properties, net 40,536,523 41,266,477
Other assets 117,448 115,014
----------- ----------
Total assets $ 42,978,383 $ 43,180,436
=========== ==========
Liabilities and Partners' Equity
Current liabilities $ 1,216,485 $ 1,297,241
Long-term debt 37,220,359 36,981,562
----------- ----------
Total liabilities 38,436,844 38,278,803
Partners' Equity
Limited Partner 4,485,903 4,970,593
General Partners 55,636 (68,960)
----------- ----------
4,541,539 4,901,633
Total liabilities and
partners' equity $ 42,978,383 $ 43,180,436
=========== ==========
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 1,052,555 $ 986,014
Expenses:
Operating expenses 557,569 557,727
Interest expense 322,836 296,945
Depreciation and amortization 405,392 412,151
----------- ----------
Total expenses 1,285,797 1,266,823
Net loss $ (233,242) $ (280,809)
=========== ==========
Other partners' share
of net loss $ (2,332) $ (2,808)
Partnership's share of net loss $ (230,910) $ (278,001)
----------- ----------
Equity in Loss of
Project Partnerships $ (233,242) $ (280,809)
=========== ==========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Series'
Project Partnerships as of March 31 of each year:
1996 1995
SERIES 8 ----------- ----------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,777,410 $ 2,205,887
Investment properties, net 43,584,462 42,562,794
Other assets 95,264 76,595
----------- ----------
Total assets $ 45,457,136 $ 44,845,276
=========== ==========
Liabilities and Partners' Equity
Current liabilities $ 1,419,615 $ 1,803,961
Long-term debt 39,109,114 36,731,442
----------- ----------
Total liabilities 40,528,729 38,535,403
Partners' Equity
Limited Partner 4,960,886 6,259,731
General Partners (32,479) 50,142
----------- ----------
4,928,407 6,309,873
Total liabilities and
partners' equity $ 45,457,136 $ 44,845,276
=========== ==========
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 948,232 $ 827,841
Expenses:
Operating expenses 551,691 454,226
Interest expense 217,371 179,495
Depreciation and amortization 388,034 323,452
----------- ----------
Total expenses 1,157,096 957,173
Net loss $ (208,864) $ (129,332)
=========== ==========
Other partners' share
of net loss $ (2,089) $ (1,293)
Partnership's share of net loss $ (206,775) $ (128,039)
----------- ----------
Equity in Loss of
Project Partnerships $ (208,864) $ (129,332)
=========== ==========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Series'
Project Partnerships as of March 31 of each year:
1996 1995
SERIES 9 ----------- ----------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,053,666 $ 1,967,507
Investment properties, net 24,180,155 23,991,220
Other assets 13,179 26,069
----------- ----------
Total assets $ 25,247,000 $ 25,984,796
=========== ==========
Liabilities and Partners' Equity
Current liabilities $ 485,281 $ 1,277,586
Long-term debt 20,708,124 20,015,416
----------- ----------
Total liabilities 21,193,405 21,293,002
Partners' Equity
Limited Partner 4,042,577 4,644,203
General Partners 11,018 47,591
----------- ----------
4,053,595 4,691,794
Total liabilities and
partners' equity $ 25,247,000 $ 25,984,796
=========== ==========
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 530,314 $ 390,138
Expenses:
Operating expenses 275,178 211,077
Interest expense 150,916 87,457
Depreciation and amortization 220,035 107,212
----------- ----------
Total expenses 646,129 405,746
Net loss $ (115,815) $ (15,608)
=========== ==========
Other partners' share
of net loss $ (1,158) $ (156)
Partnership's share of net loss $ (114,657) $ (15,452)
----------- ----------
Equity in Loss of
Project Partnerships $ (115,815) $ (15,608)
=========== ==========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Series'
Project Partnerships as of March 31 of each year:
1996 1995
SERIES 10 ----------- ----------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,022,681 $ 1,350,284
Investment properties, net 16,563,334 16,780,978
Other assets 26,677 21,153
------------ ----------
Total assets $ 17,612,692 $ 18,152,415
=========== ==========
Liabilities and Partners' Equity
Current liabilities $ 407,719 $ 857,854
Long-term debt 13,605,647 13,439,999
----------- ----------
Total liabilities 14,013,366 14,297,853
Partners' Equity
Limited Partner 3,559,231 3,797,958
General Partners 40,095 56,604
----------- ----------
3,599,326 3,854,562
Total liabilities and
partners' equity $ 17,612,692 $ 18,152,415
=========== ==========
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 348,206 $ 302,675
Expenses:
Operating expenses 201,959 154,665
Interest expense 69,485 60,955
Depreciation and amortization 126,097 71,960
----------- ----------
Total expenses 397,541 287,580
Net loss $ (49,335) $ 15,095
=========== ==========
Other partners' share
of net loss $ (493) $ 151
Partnership's share of net loss $ (48,842) $ 14,944
----------- -----------
Equity in Loss of
Project Partnerships $ (49,335) $ 15,095
=========== ==========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Series'
Project Partnerships as of March 31 of each year:
1996 1995
SERIES 11 ----------- ----------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,844,884 $ 3,019,148
Investment properties, net 14,647,464 9,274,801
Other assets 133,439 8,327
----------- ----------
Total assets $ 16,625,787 $ 12,302,276
=========== ==========
Liabilities and Partners' Equity
Current liabilities $ 1,312,762 $ 1,889,092
Long-term debt 11,071,935 6,865,180
----------- ----------
Total liabilities 12,384,697 8,754 272
Partners' Equity
Limited Partner 3,902,588 3,417,582
General Partners 338,502 130,422
----------- ----------
4,241,090 3,548,004
Total liabilities and
partners' equity $ 16,625,787 $ 12,302,276
=========== ==========
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 332,519 $ 106,100
Expenses:
Operating expenses 167,232 55,692
Interest expense 88,675 23,914
Depreciation and amortization 56,248 11,990
----------- ----------
Total expenses 312,155 91,596
Net loss $ 20,364 $ 14,504
=========== ==========
Other partners' share
of net loss $ 204 $ 145
Partnership's share of net loss $ 20,160 $ 14,359
----------- ----------
Equity in Loss of
Project Partnerships $ 20,364 $ 14,504
=========== ==========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships on a three month
lag, below is the summarized financial information for the Project
Partnerships as of March 31 of each year:
1996 1995
TOTAL SERIES 7 - 11 ----------- ----------
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 8,023,053 $ 10,341,771
Investment properties, net 139,511,938 133,876,270
Other assets 386,007 247,158
----------- ----------
Total assets $ 147,920,998 $144,465,199
=========== ==========
Liabilities and Partners' Equity
Current liabilities $ 4,841,862 $ 7,125,734
Long-term debt 121,715,179 114,033,599
----------- ----------
Total liabilities 126,557,041 121,159,333
Partners' Equity
Limited Partner 20,951,185 23,090,067
General Partners 412,772 215,799
----------- -----------
21,363,957 23,305,866
Total liabilities and
partners' equity $ 147,920,998 $144,465,199
=========== ==========
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 3,211,826 $ 2,612,768
Expenses:
Operating expenses 1,753,629 1,433,387
Interest expense 849,283 648,766
Depreciation and amortization 1,195,806 926,765
----------- ----------
Total expenses 3,798,718 3,008,918
Net loss $ (586,892) $ (396,150)
=========== ==========
Other partners' share
of net loss $ (5,868) $ (3,961)
Partnership's share of net loss $ (581,024) $ (392,189)
----------- ----------
Equity in Loss of
Project Partnerships $ (586,892) $ (396,150)
=========== ==========
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
June 30, 1996
Results of Operations, Liquidity and Capital Resources
The proceeds from Limited Partner investors' capital
contributions available for investment are used to acquire
interests in Project Partnerships. Project Partnership
acquisitions and the status of project operations are shown on the
following table:
As of June 30, 1995
Under Recently Fully
Construction Completed Operating Totals
Series 7 - - 38 38
Series 8 5 2 36 43
Series 9 3 - 21 24
Series 10 1 4 10 15
Series 11 8 - 2 10
As of June 30, 1996
Under Recently Fully
Construction Completed Operating Totals
Series 7 - 1 38 39
Series 8 - 1 42 43
Series 9 - 1 23 24
Series 10 - - 15 15
Series 11 2 3 7 12
The capital resources of each Series are used to pay General and
Administrative operating costs including personnel, supplies, data
processing, travel and legal and accounting associated with the
administration and monitoring of Gateway and the Project
Partnerships. The capital resources are also used to pay the Asset
Management Fee due the Managing General Partner, but only to the
extent that Gateway's remaining resources are sufficient to fund
Gateway's ongoing needs.
The sources of funds to pay the operating costs of each Series
are short-term investments and interest earned thereon, the
maturity of U.S. Treasury Security Strips ("Zero Coupon
Treasuries") which were purchased with funds set aside for this
purpose, and cash distributed to the Series from the operations of
the Project Partnerships.
Series 7 - Gateway closed this series on October 16, 1992 after
receiving $10,395,000 from 635 Limited Partner investors. Equity
in losses of Project Partnerships decreased from $278,001 for the
three months ended June 30,1995 to $230,910 for the three months
ended June 30, 1996. In general, it is common in the real estate
industry to experience losses for financial and tax reporting
purposes because of the non-cash expenses of depreciation and
amortization. As a result, management expects that this Series, as
well as the Series described below, will report its equity in
Project Partnerships as a loss for tax and financial reporting
purposes. Overall management believes the Project Partnerships are
operating as expected and are generating tax credits which meet
projections.
At June 30, 1996, the Series had $254,142 of short-term
investments (Cash and Cash Equivalents). It also had $486,432 in
Zero Coupon Treasuries. Management believes the sources of funds
are sufficient to meet current and ongoing operating costs for the
foreseeable future, and to pay part of the Asset Management Fee.
As disclosed on the statement of cash flows, the Series had a
net loss of $251,641 for the three months ending June 30, 1996.
However, after adjusting for Equity in Losses of Project
Partnerships of $230,910 and the changes in operating assets and
liabilities, net cash used in operating activities was $9,322.
Cash provided by investing activities totaled $3,682 primarily
consisting of cash distributions from the Project Partnerships of
$7,286. There were no unusual events or trends to describe.
Expenses for the three months ended June 30, 1996 were
comparable to the three months ended June 30, 1995. Interest
income decreased for the three months ended June 30, 1996 as
compared to June 30, 1995 due to lower interest rates and a
decrease in the average balance of cash available for investment.
There were no unusual variations in the operating results between
these two periods.
Series 8 - Gateway closed this Series on June 28, 1993 after
receiving $9,980,000 from 664 Limited Partner investors. Equity in
losses of Project Partnerships increased from $128,039 for the
three months ended June 30, 1995 to $206,775 for the three months
ended June 30, 1996. This increase was due to the addition of one
property in the Series.
At June 30, 1996, the Series had $320,389 of short-term
investments (Cash and Cash Equivalents). It also had $458,114 in
Zero Coupon Treasuries. Management believes the sources of funds
are sufficient to meet current and ongoing operating costs for the
foreseeable future, and to pay part of the Asset Management Fee.
As disclosed on the statement of cash flows, the Series had a
net loss of $226,442 for the three months ended June 30, 1996.
However, after adjusting for Equity in Losses of Project
Partnerships of $206,775 and the changes in operating assets and
liabilities, net cash used in operating activities was $9,026.
Cash provided by investing activities totaled $34,394 and was
primarily due to the reduction of a receivable from the Project
Partnerships and cash distributions from the Project Partnerships
of $12,437.
Expenses for the three ended June 30, 1996 were comparable to
the three months ended June 30, 1995. Interest income was also
comparable for the three months ended June 30, 1996 as compared to
June 30, 1995. There were no unusual variations in the operating
results between these two periods.
Series 9 - Gateway closed this Series on December 31, 1993 after
receiving $6,254,000 from 406 Limited Partner investors. Equity in
losses of Project Partnerships increased from $15,452 for the three
ended June 30, 1995 to $114,657 for the three months ended June 30,
1996. This increase was due to 3 properties moving from the
construction and rent-up phases to fully operating in 1996.
At June 30, 1996, the Series had $112,210 of short-term
investments (Cash and Cash Equivalents). It also had $310,953 in
Zero Coupon Treasuries. Management believes the sources of funds
are sufficient to meet current and ongoing operating costs for the
foreseeable future, and to pay part of the Asset Management Fee.
As disclosed on the statement of cash flows, the Series had net
loss of $126,711 for the three months ending June 30, 1996. After
adjusting for Equity in Losses of Project Partnerships of $114,657
and the changes in operating assets and liabilities, net cash used
in operating activities was $6,203. Cash provided by investing
activities totaled $6,161 received in cash distributions from the
Project Partnerships. There were no unusual events or trends to
describe.
Expenses for the three months ended June 30, 1996 were
comparable to the three months ended June 30, 1995. Interest
income decreased for the three months ended June 30, 1996 as
compared to June 30, 1995 due to lower interest rates and a
decrease in the average balance of cash available for investment.
There were no unusual variations in the operating results between
these two periods.
Series 10 - Gateway closed this Series on January 21, 1994 after
receiving $5,043,000 from 325 Limited Partner investors. Equity in
Losses of Project Partnerships decreased from $14,944 of income for
the three months ended June 30, 1995 to $48,842 in losses for the
three months ended June 30, 1996 as 5 properties moved from the
construction and rent-up phases to fully operating in 1996.
At June 30, 1996, the Series had $176,006 of short-term
investments (Cash and Cash Equivalents). It also had $243,618 in
Zero Coupon Treasuries. Management believes the sources of funds
are sufficient to meet current and ongoing operating costs for the
foreseeable future, and to pay part of the Asset Management Fee.
As disclosed on the statement of cash flows, the Series had a
net loss of $53,383 for the three months ending June 30, 1996.
After adjusting for Equity in Losses of Project Partnerships of
$48,842 and the changes in operating assets and liabilities, net
cash used in operating activities was $2,012. Cash provided by
investing activities totaled $15,442 and was due to a reduction of
receivables from Project Partnerships of $13,059 and cash
distributions from Project Partnerships of $2,383. There were no
unusual events or trends to describe.
Expenses for the three months ended June 30, 1996 were
comparable to the three months ended June 30, 1995. Interest
income was also comparable for the three months ended June 30, 1996
as compared to June 30, 1995. There were no unusual variations in
the operating results between these two periods.
Series 11 - Gateway closed this Series on April 29, 1994 after
receiving $5,127,000 from 330 Limited investors. Equity in Income
of Project Partnerships increased from $14,359 for the three months
ended June 30, 1995 as compared to $20,160 for the three months
ended June 30, 1996 as two properties which are under construction
were added to the Series.
At June 30, 1996, the Series had $216,654 of short-term
investments (Cash and Cash Equivalents). It also had $253,625 in
Zero Coupon Treasuries. Management believes the sources of funds
are sufficient to meet current and ongoing operating costs for the
foreseeable future, and to pay part of the Asset Management Fee.
As disclosed on the statement of cash flows, the Series had net
income of $18,729 for the three months ending June 30, 1996. After
adjusting for Equity in Income of Project Partnerships of $20,160
and the changes in operating assets and liabilities, net cash used
in operating activities was $4,272. Cash used in investing
activities totaled $144,101 and was used for the purchase of
Investments in Project Partnerships. There were no unusual events
or trends to describe.
Expenses for the three months ended June 30, 1996 as compared
to the three months ended June 30, 1995 increase as the number of
properties increased from 10 to 12 for this period. Interest
income decreased for the three months ended June 30, 1996 as
compared to June 30, 1995 due to lower interest rates and a
decrease in the average balance of cash available for investment.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6 - EXHIBIT AND REPORTS ON FORM 8-K
a. Exhibits - NONE
b. Reports filed on Form 8-K - NONE
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
By: RJ Credit Partners, Inc.
Managing General Partner
Date: August 15, 1996 By:/s/ Ronald M. Diner
Ronald M. Diner
President
Date: August 15, 1996 By:/s/ Sandra L. Furey
Sandra L. Furey
Secretary and Treasurer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE QURTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> JUN-30-1996
<CASH> 1,079,401
<SECURITIES> 1,752,742
<RECEIVABLES> 8,545
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,233,497
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 25,927,345
<CURRENT-LIABILITIES> 299,276
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 25,170,239
<TOTAL-LIABILITY-AND-EQUITY> 25,927,345
<SALES> 0
<TOTAL-REVENUES> 43,490
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 101,914
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (639,448)
<INCOME-TAX> 0
<INCOME-CONTINUING> (639,448)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (639,448)
<EPS-PRIMARY> (17.20)<F1>
<EPS-DILUTED> (17.20)<F1>
<FN>
<F1>EPS IS NET LOSS PER $1,000 LIMITED PARTNERSHIP UNIT.
</FN>
</TABLE>
