<PAGE>
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 December 31, 1997
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 December 31, 1997
Units of Limited Partnership
Interest: $1,000 per unit 36,799
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II, 1995 Form 10-K, filed with the
Securities and Exchange Commission on June 25, 1997
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
SERIES 7 DECEMBER 31, MARCH 31,
1997 1997
------- -------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 228,200 $ 267,980
Investments in Securities 46,830 44,933
Receivable from Project Partnerships 0 0
------------ ------------
Total Current Assets $ 275,030 $ 312,913
Investments in Securities 444,227 421,843
Investments in Project Partnerships, Net 3,794,242 4,483,546
----------- -----------
Total Assets $ 4,513,499 $ 5,218,302
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 51,749 $ 54,499
Payable to Project Partnerships 0 0
----------- -----------
Total Current Liabilities 51,749 54,499
----------- -----------
Long-Term Liabilities:
Payable to General Partners 199,165 179,733
----------- -----------
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 December 31, 1997 and March 31,1997) 4,311,237 5,025,507
General Partners (48,652) (41,437)
----------- -----------
Total Partners' Equity $ 4,262,585 $ 4,984,070
----------- -----------
Total Liabilities and Partners' Equity $ 4,513,499 $ 5,218,302
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 8 DECEMBER 31, MARCH 31,
1997 1997
------- -------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 357,576 $ 396,038
Investments in Securities 41,838 40,189
Receivable from Project Partnerships 0 453
------------ ------------
Total Current Assets $ 399,414 $ 436,680
Investments in Securities 420,981 400,823
Investments in Project Partnerships, Net 3,721,176 4,614,122
----------- -----------
Total Assets $ 4,541,571 $ 5,451,625
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 42,332 $ 42,185
Payable to Project Partnerships 0 0
----------- -----------
Total Current Liabilities 42,332 42,185
----------- -----------
Long-Term Liabilities:
Payable to General Partners 243,855 217,295
----------- -----------
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 December 31, 1997 and March 31, 1997) 4,300,456 5,227,849
General Partners (45,072) (35,704)
----------- -----------
Total Partners' Equity $ 4,255,384 $ 5,192,145
----------- -----------
Total Liabilities and Partners' Equity $ 4,541,571 $ 5,451,625
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 9 DECEMBER MARCH 31,
31,1997 1997
------- -------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 143,905 $ 161,813
Investments in Securities 27,898 26,879
Receivable from Project Partnerships 0 0
------------ ------------
Total Current Assets $ 171,803 $ 188,692
Investments in Securities 282,798 270,520
Investments in Project Partnerships, Net 3,520,419 3,848,367
----------- -----------
Total Assets $ 3,975,020 $ 4,307,579
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 24,171 $ 24,250
Payable to Project Partnerships 0 0
----------- -----------
Total Current Liabilities 24,171 24,250
----------- -----------
Long-Term Liabilities:
Payable to General Partners 138,530 119,002
----------- -----------
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 December 31, 1997 and March 31, 1997) 3,829,033 4,177,521
General Partners (16,714) (13,194)
----------- -----------
Total Partners' Equity $ 3,812,319 $ 4,164,327
----------- -----------
Total Liabilities and Partners' Equity $ 3,975,020 $ 4,307,579
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 10 DECEMBER 31, MARCH 31,
1997 1997
------- -------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 166,262 $ 199,743
Investments in Securities 21,913 20,995
Receivable from Project Partnerships 0 0
------------ ------------
Total Current Assets $ 188,175 $ 220,738
Investments in Securities 225,620 214,600
Investments in Project Partnerships, Net 3,391,101 3,571,518
----------- -----------
Total Assets $ 3,804,896 $ 4,006,856
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 27,839 $ 28,072
Payable to Project Partnerships 0 7,712
----------- -----------
Total Current Liabilities 27,839 35,784
----------- -----------
Long-Term Liabilities:
Payable to General Partners 34,356 37,184
----------- -----------
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 December 31, 1997 and March 31, 1997) 3,749,454 3,938,729
General Partners (6,753) (4,841)
----------- -----------
Total Partners' Equity $ 3,742,701 $ 3,933,888
----------- -----------
Total Liabilities and Partners' Equity $ 3,804,896 $ 4,006,856
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 11 DECEMBER 31, MARCH 31,
1997 1997
------- -------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 152,984 $ 169,385
Investments in Securities 20,910 19,915
Receivable from Project Partnerships 0 0
------------ ------------
Total Current Assets $ 173,894 $ 189,300
Investments in Securities 240,187 227,438
Investments in Project Partnerships, Net 3,880,253 4,070,301
----------- -----------
Total Assets $ 4,294,334 $ 4,487,039
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 27,481 $ 27,882
Payable to Project Partnerships 0 0
----------- -----------
Total Current Liabilities 27,481 27,882
----------- -----------
Long-Term Liabilities:
Payable to General Partners 8,899 8,161
----------- -----------
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 December 31, 1997 and March 31, 1997) 4,261,365 4,452,477
General Partners (3,411) (1,481)
----------- -----------
Total Partners' Equity $ 4,257,954 $ 4,450,996
----------- -----------
Total Liabilities and Partners' Equity $ 4,294,334 $ 4,487,039
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
TOTAL SERIES 7 - 11 DECEMBER 31, MARCH 31,
1997 1997
------- -------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 1,048,927 $ 1,194,959
Investments in Securities 159,389 152,911
Receivable from Project Partnerships 0 453
------------ ------------
Total Current Assets $ 1,208,316 $ 1,348,323
Investments in Securities 1,613,813 1,535,224
Investments in Project Partnerships, Net 18,307,191 20,587,854
----------- -----------
Total Assets $21,129,320 $23,471,401
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 173,572 $ 176,888
Payable to Project Partnerships 0 7,712
----------- -----------
Total Current Liabilities 173,572 184,600
----------- -----------
Long-Term Liabilities:
Payable to General Partners 624,805 561,375
----------- -----------
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 December 31, 1997 and March 31, 1997) 20,451,545 22,822,083
General Partners (120,602) (96,657)
----------- -----------
Total Partners' Equity $20,330,943 $22,725,426
----------- -----------
Total Liabilities and Partners' Equity $21,129,320 $23,471,401
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31,
SERIES 7 1997 1996
---- ----
Revenues:
Interest Income $ 33,835 $ 32,878
----------- -----------
Expenses:
Asset Management Fee-General Partner 59,796 58,500
General and Administrative:
General Partner 11,059 8,874
Other 16,681 14,476
Amortization 16,298 16,432
----------- -----------
Total Expenses 103,834 98,282
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (69,999) (65,404)
Equity in Losses of Project
Partnerships (651,486) (676,579)
---------- ----------
Net Loss $ (721,485) $ (741,983)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (714,270) $ (734,563)
General Partners (7,215) (7,420)
----------- -----------
$ (721,485) $ (741,983)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (68.71) $ (70.67)
============ ============
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
FOR THE NINE MONTHS ENDED DECEMBER 31,
SERIES 8 1997 1996
---- ----
Revenues:
Interest Income $ 35,614 $ 37,445
----------- -----------
Expenses:
Asset Management Fee-General Partner 65,928 64,500
General and Administrative:
General Partner 12,192 9,785
Other 17,276 15,637
Amortization 9,664 9,805
----------- -----------
Total Expenses 105,060 99,727
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (69,446) (62,282)
Equity in Losses of Project
Partnerships (867,315) (792,107)
---------- ----------
Net Loss $ (936,761) $ (854,389)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (927,393) $ (845,845)
General Partners (9,368) (8,544)
----------- -----------
$ (936,761) $ (854,389)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (92.93) $ (84.75)
============ ============
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
FOR THE NINE MONTHS ENDED DECEMBER 31,
SERIES 9 1997 1996
---- ----
Revenues:
Interest Income $ 19,081 $ 19,885
----------- -----------
Expenses:
Asset Management Fee-General Partner 36,797 36,000
General and Administrative:
General Partner 6,805 5,462
Other 9,636 8,892
Amortization 5,337 5,337
----------- -----------
Total Expenses 58,575 55,691
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (39,494) (35,806)
Equity in Losses of Project
Partnerships (312,514) (342,005)
---------- ----------
Net Loss $ (352,008) $ (377,811)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (348,488) $ (374,033)
General Partners (3,520) (3,778)
----------- -----------
$ (352,008) $ (377,811)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (55.72) $ (59.81)
============ ============
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
FOR THE NINE MONTHS ENDED DECEMBER 31,
SERIES 10 1997 1996
---- ----
Revenues:
Interest Income $ 18,967 $ 19,065
----------- -----------
Expenses:
Asset Management Fee-General Partner 22,999 22,500
General and Administrative:
General Partner 4,253 3,412
Other 6,290 6,158
Amortization 4,380 4,412
----------- -----------
Total Expenses 37,922 36,482
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (18,955) (17,417)
Equity in Losses of Project
Partnerships (172,232) (148,096)
---------- ----------
Net Loss $ (191,187) $ (165,513)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (189,275) $ (163,858)
General Partners (1,912) (1,655)
----------- -----------
$ (191,187) $ (165,513)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (37.53) $ (32.49)
============ ============
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
FOR THE NINE MONTHS ENDED DECEMBER 31,
SERIES 11 1997 1996
---- ----
Revenues:
Interest Income $ 19,858 $ 23,447
----------- -----------
Expenses:
Asset Management Fee-General Partner 18,399 18,000
General and Administrative:
General Partner 3,402 2,728
Other 6,030 5,357
Amortization 5,391 5,188
----------- -----------
Total Expenses 33,222 31,273
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (13,364) (7,826)
Equity in Losses of Project
Partnerships (179,678) 73,769
---------- ----------
Net Loss $ (193,042) $ 65,943
============ ============
Allocation of Net Loss:
Limited Partners $ (191,112) $ 65,284
General Partners (1,930) 659
----------- -----------
$ (193,042) $ 65,943
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (37.28) $ 12.73
============ ============
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
FOR THE NINE MONTHS ENDED DECEMBER 31,
TOTAL SERIES 7 - 11 1997 1996
---- ----
Revenues:
Interest Income $ 127,355 $ 132,720
----------- -----------
Expenses:
Asset Management Fee-General Partner 203,919 199,500
General and Administrative:
General Partner 37,711 30,261
Other 55,913 50,520
Amortization 41,070 41,174
----------- -----------
Total Expenses 338,613 321,455
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (211,258) (188,735)
Equity in Losses of Project
Partnerships (2,183,225) (1,885,018)
---------- ----------
Net Loss $(2,394,483) $(2,073,753)
=========== ===========
Allocation of Net Loss:
Limited Partners $(2,370,538) $(2,053,015)
General Partners (23,945) (20,738)
----------- -----------
$(2,394,483) $(2,073,753)
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31,
SERIES 7 1997 1996
---- ----
Revenues:
Interest Income $ 11,190 $ 10,938
----------- -----------
Expenses:
Asset Management Fee-General Partner 20,148 19,500
General and Administrative:
General Partner 3,587 2,954
Other 2,382 2,160
Amortization 5,419 5,486
----------- -----------
Total Expenses 31,536 30,100
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (20,346) (19,162)
Equity in Losses of Project
Partnerships (215,527) (248,641)
---------- ----------
Net Loss $ (235,873) $ (267,803)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (233,514) $ (265,125)
General Partners (2,359) (2,678)
----------- -----------
$ (235,873) $ (267,803)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (22.46) $ (25.51)
============ ============
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
FOR THE THREE MONTHS ENDED DECEMBER 31,
SERIES 8 1997 1996
---- ----
Revenues:
Interest Income $ 11,993 $ 11,669
----------- -----------
Expenses:
Asset Management Fee-General Partner 22,214 21,500
General and Administrative:
General Partner 3,952 3,257
Other 2,325 2,246
Amortization 3,675 3,745
----------- -----------
Total Expenses 32,166 30,748
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (20,173) (19,079)
Equity in Losses of Project
Partnerships (277,623) (372,161)
---------- ----------
Net Loss $ (297,796) $ (391,240)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (294,818) $ (387,327)
General Partners (2,978) (3,913)
----------- -----------
$ (297,796) $ (391,240)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (29.54) $ (38.81)
============ ============
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
FOR THE THREE MONTHS ENDED DECEMBER 31,
SERIES 9 1997 1996
---- ----
Revenues:
Interest Income $ 6,356 $ 8,436
----------- -----------
Expenses:
Asset Management Fee-General Partner 12,398 12,000
General and Administrative:
General Partner 2,206 1,818
Other 1,580 1,373
Amortization 1,779 1,779
----------- -----------
Total Expenses 17,963 16,970
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (11,607) (8,534)
Equity in Losses of Project
Partnerships (98,139) (116,661)
---------- ----------
Net Loss $ (109,746) $ (125,195)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (108,649) $ (123,943)
General Partners (1,097) (1,252)
----------- -----------
$ (109,746) $ (125,195)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (17.37) $ (19.82)
============ ============
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
FOR THE THREE MONTHS ENDED DECEMBER 31,
SERIES 10 1997 1996
---- ----
Revenues:
Interest Income $ 6,191 $ 6,032
----------- -----------
Expenses:
Asset Management Fee-General Partner 7,749 7,500
General and Administrative:
General Partner 1,378 1,136
Other 1,129 1,101
Amortization 1,460 1,476
----------- -----------
Total Expenses 11,716 11,213
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (5,525) (5,181)
Equity in Losses of Project
Partnerships (61,786) (43,529)
---------- ----------
Net Loss $ (67,311) $ (48,710)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (66,638) $ (48,223)
General Partners (673) (487)
----------- -----------
$ (67,311) $ (48,710)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (13.21) $ (9.56)
============ ============
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
FOR THE THREE MONTHS ENDED DECEMBER 31,
SERIES 11 1997 1996
---- ----
Revenues:
Interest Income $ 6,639 $ 7,451
----------- -----------
Expenses:
Asset Management Fee-General Partner 6,199 6,000
General and Administrative:
General Partner 1,102 908
Other 1,284 1,081
Amortization 1,797 1,663
----------- -----------
Total Expenses 10,382 9,652
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (3,743) (2,201)
Equity in Losses of Project
Partnerships (41,995) 30,198
---------- ----------
Net Loss $ (45,738) $ 27,997
=========== ===========
Allocation of Net Loss:
Limited Partners $ (45,281) $ 27,717
General Partners (457) 280
----------- -----------
$ (45,738) $ 27,997
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (8.83) $ 5.41
============ ============
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
FOR THE THREE MONTHS ENDED DECEMBER 31,
TOTAL SERIES 7 - 11 1997 1996
---- ----
Revenues:
Interest Income $ 42,369 $ 44,526
----------- -----------
Expenses:
Asset Management Fee-General Partner 68,708 66,500
General and Administrative:
General Partner 12,225 10,073
Other 8,700 7,961
Amortization 14,130 14,149
----------- -----------
Total Expenses 103,763 98,683
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (61,394) (54,157)
Equity in Losses of Project
Partnerships (695,070) (750,794)
---------- ----------
Net Loss $ (756,464) $ (804,951)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (748,899) $ (796,901)
General Partners (7,565) (8,050)
----------- -----------
$ (756,464) $ (804,951)
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
Limited General
SERIES 7 Partners Partners Total
--------- -------- -----
Balance at March 31, 1996 $ 6,042,156 $ (31,168) $ 6,010,988
Net Loss (734,563) (7,420) (741,983)
----------- ----------- -----------
Balance at December 31, 1996 $ 5,307,593 $ (38,588) $ 5,269,005
============ ============ ============
Balance at March 31, 1997 $ 5,025,507 $ (41,437) $ 4,984,070
Net Loss (714,270) (7,215) (721,485)
----------- ----------- -----------
Balance at December 31, 1997 $ 4,311,237 $ (48,652) $ 4,262,585
============ ============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
Limited General
SERIES 8 Partners Partners Total
--------- -------- -----
Balance at March 31, 1996 $ 6,306,146 $ (24,812) $ 6,281,334
Net Loss (845,845) (8,544) (854,389)
----------- ----------- -----------
Balance at December 31, 1996 $ 5,460,301 $ (33,356) $ 5,426,945
============ ============ ============
Balance at March 31, 1997 $ 5,227,849 $ (35,704) $ 5,192,145
Net Loss (927,393) (9,368) (936,761)
----------- ----------- -----------
Balance at December 31, 1997 $ 4,300,456 $ (45,072) $ 4,255,384
============ ============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
Limited General
SERIES 9 Partners Partners Total
--------- -------- -----
Balance at March 31, 1996 $ 4,729,151 $ (7,622) $ 4,721,529
Net Loss (374,033) (3,778) (377,811)
----------- ----------- -----------
Balance at December 31, 1996 $ 4,355,118 $ (11,400) $ 4,343,718
============ ============ ============
Balance at March 31, 1997 $ 4,177,521 $ (13,194) $ 4,164,327
Net Loss (348,488) (3,520) (352,008)
----------- ----------- -----------
Balance at December 31, 1997 $ 3,829,033 $ (16,714) $ 3,812,319
============ ============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
Limited General
SERIES 10 Partners Partners Total
--------- -------- -----
Balance at March 31, 1996 $ 4,151,503 $ (2,692) $ 4,148,811
Net Loss (163,858) (1,655) (165,513)
----------- ----------- -----------
Balance at December 31, 1996 $ 3,987,645 $ (4,347) $ 3,983,298
============ ============ ============
Balance at March 31, 1997 $ 3,938,729 $ (4,841) $ 3,933,888
Net Loss (189,275) (1,912) (191,187)
----------- ----------- -----------
Balance at December 31, 1997 $ 3,749,454 $ (6,753) $ 3,742,701
============ ============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
Limited General
SERIES 11 Partners Partners Total
--------- -------- -----
Balance at March 31, 1996 $ 4,646,546 $ 479 $ 4,647,025
Net Loss 65,284 659 65,943
----------- ----------- -----------
Balance at December 31, 1996 $ 4,711,830 $ 1,138 $ 4,712,968
============ ============ ============
Balance at March 31, 1997 $ 4,452,477 $ (1,481) $ 4,450,996
Net Loss (191,112) (1,930) (193,042)
----------- ----------- -----------
Balance at December 31, 1997 $ 4,261,365 $ (3,411) $ 4,257,954
============ ============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
Limited General
TOTAL SERIES 7 - 11 Partners Partners Total
--------- -------- -----
Balance at March 31, 1996 $25,875,502 $ (65,815) $25,809,687
Net Loss (2,053,015) (20,738) (2,073,753)
----------- ----------- -----------
Balance at December 31, 1996 $23,822,487 $ (86,553) $23,735,934
============ ============ ============
Balance at March 31, 1997 $22,822,083 $ (96,657) $22,725,426
Net Loss (2,370,538) (23,945) (2,394,483)
----------- ----------- -----------
Balance at December 31, 1997 $20,451,545 $ (120,602) $20,330,943
============ ============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
SERIES 7 1997 1996
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (721,485) $ (741,983)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 16,298 16,432
Accreted Interest Income on Investments
in Securities (24,281) (24,321)
Equity in Losses of Project Partnerships 651,486 676,579
Payment of Asset Management Fee (40,364) (40,146)
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 57,046 59,550
----------- -----------
Net Cash Used in Operating Activities (61,300) (53,889)
----------- -----------
Cash Flows from Investing Activities:
Investments in Project Partnerships 0 (3,333)
(Increase) Decrease in Receivable from
Project Partnerships 0 0
Acquisition Fees and Expenses 0 (272)
Distributions Received from Project
Partnerships 21,520 18,925
Increase (Decrease) in Payable to Project
Partnerships - Capital Contributions 0 0
----------- -----------
Net Cash Provided by (Used in)
Investing Activities 21,520 15,320
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents (39,780) (38,569)
Cash and Cash Equivalents at Beginning of
Year 267,980 259,782
----------- -----------
Cash and Cash Equivalents at End of Year $ 228,200 $ 221,213
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
SERIES 8 1997 1996
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (936,761) $ (854,389)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 9,664 9,805
Accreted Interest Income on Investments
in Securities (21,807) (21,871)
Equity in Losses of Project Partnerships 867,315 792,107
Payment of Asset Management Fee (39,368) (26,810)
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 66,075 62,723
----------- -----------
Net Cash Used in Operating Activities (54,882) (38,435)
----------- -----------
Cash Flows from Investing Activities:
Investments in Project Partnerships 0 453
(Increase) Decrease in Receivable from
Project Partnerships 453 75,574
Acquisition Fees and Expenses 0 0
Distributions Received from Project
Partnerships 15,967 21,403
Increase (Decrease) in Payable to Project
Partnerships - Capital Contributions 0 0
----------- -----------
Net Cash Provided by (Used in)
Investing Activities 16,420 97,430
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents (38,462) 58,995
Cash and Cash Equivalents at Beginning of
Year 396,038 295,021
----------- -----------
Cash and Cash Equivalents at End of Year $ 357,576 $ 354,016
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
SERIES 9 1997 1996
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (352,008) $ (377,811)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 5,337 5,337
Accreted Interest Income on Investments
in Securities (13,297) (13,457)
Equity in Losses of Project Partnerships 312,514 342,005
Payment of Asset Management Fee (17,269) (8,709)
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 36,718 34,897
----------- -----------
Net Cash Used in Operating Activities (28,005) (17,738)
----------- -----------
Cash Flows from Investing Activities:
Investments in Project Partnerships 0 18,076
(Increase) Decrease in Receivable from
Project Partnerships 0 8,545
Acquisition Fees and Expenses 0 0
Distributions Received from Project
Partnerships 10,097 6,160
Increase (Decrease) in Payable to Project
Partnerships - Capital Contributions 0 0
----------- -----------
Net Cash Provided by (Used in)
Investing Activities 10,097 32,781
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents (17,908) 15,043
Cash and Cash Equivalents at Beginning of
Year 161,813 112,252
----------- -----------
Cash and Cash Equivalents at End of Year $ 143,905 $ 127,295
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
SERIES 10 1997 1996
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (191,187) $ (165,513)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 4,380 4,412
Accreted Interest Income on Investments
in Securities (11,938) (11,963)
Equity in Losses of Project Partnerships 172,232 148,096
Payment of Asset Management Fee (25,826) (12,141)
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 22,765 21,990
----------- -----------
Net Cash Used in Operating Activities (29,574) (15,119)
----------- -----------
Cash Flows from Investing Activities:
Investments in Project Partnerships 0 0
(Increase) Decrease in Receivable from
Project Partnerships 0 13,059
Acquisition Fees and Expenses 0 0
Distributions Received from Project
Partnerships 3,805 3,070
Increase (Decrease) in Payable to Project
Partnerships - Capital Contributions (7,712) 0
----------- -----------
Net Cash Provided by (Used in)
Investing Activities (3,907) 16,129
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents (33,481) 1,010
Cash and Cash Equivalents at Beginning of
Year 199,743 162,576
----------- -----------
Cash and Cash Equivalents at End of Year $ 166,262 $ 163,586
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
SERIES 11 1997 1996
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (193,042) $ 65,943
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 5,391 5,188
Accreted Interest Income on Investments
in Securities (13,744) (13,697)
Equity in Losses of Project Partnerships 179,678 (73,769)
Payment of Asset Management Fee (17,661) (20,342)
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 17,998 13,053
----------- -----------
Net Cash Used in Operating Activities (21,380) (23,624)
----------- -----------
Cash Flows from Investing Activities:
Investments in Project Partnerships 0 58,925
(Increase) Decrease in Receivable from
Project Partnerships 0 8,250
Acquisition Fees and Expenses 0 (178)
Distributions Received from Project
Partnerships 4,979 1,500
Increase (Decrease) in Payable to Project
Partnerships - Capital Contributions 0 (279,887)
----------- -----------
Net Cash Provided by (Used in)
Investing Activities 4,979 (211,390)
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents (16,401) (235,014)
Cash and Cash Equivalents at Beginning of
Year 169,385 365,027
----------- -----------
Cash and Cash Equivalents at End of Year $ 152,984 $ 130,013
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
TOTAL SERIES 7 - 11 1997 1996
- ------------------- ---- ----
Cash Flows from Operating Activities:
Net Loss $(2,394,483) $(2,073,753)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 41,070 41,174
Accreted Interest Income on Investments
in Securities (85,067) (85,309)
Equity in Losses of Project Partnerships 2,183,225 1,885,018
Payment of Asset Management Fee (140,488) (108,148)
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 200,602 192,213
----------- -----------
Net Cash Used in Operating Activities (195,141) (148,805)
----------- -----------
Cash Flows from Investing Activities:
Investments in Project Partnerships 0 74,121
(Increase) Decrease in Receivable from
Project Partnerships 453 105,428
Acquisition Fees and Expenses 0 (450)
Distributions Received from Project
Partnerships 56,368 51,058
Increase (Decrease) in Payable to Project
Partnerships - Capital Contributions (7,712) (279,887)
----------- -----------
Net Cash Provided by (Used in)
Investing Activities 49,109 (49,730)
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents (146,032) (198,535)
Cash and Cash Equivalents at Beginning of
Year 1,194,959 1,194,658
----------- -----------
Cash and Cash Equivalents at End of Year $ 1,048,927 $ 996,123
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
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.
As of December 31, 1997, Gateway had received capital contributions of $1,000
from the General Partners and $36,799,000 from the investor Limited Partners.
Raymond James Partners, Inc. and Raymond James Tax Credit Funds, 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 will be 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 will be specifically allocated
among the limited partners of such Series.
Operating profits and losses, cash distributions from operations and Tax
Credits from each Series are generally 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.
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, 1997. 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 December 31, 1997 Balance Sheet includes Investment in Securities
consisting of U.S. Treasury Security Strips which represents their cost, plus
accreted interest income of $146,183 for Series 7, $121,931 for Series 8,
$65,603 for Series 9, $54,774 for Series 10 and $59,327 for Series 11.
Gross Unrealized
Estimated Market Cost Plus Gains and
Value Accreted Interest (Losses)
----------------- ----------------- ----------------
Series 2 $ 523,038 $ 491,057 $ 31,981
Series 3 484,183 462,818 21,365
Series 4 314,744 310,696 4,048
Series 5 261,688 247,533 14,155
Series 6 285,609 261,097 24,512
As of December 31, 1997, the cost and accreted interest of debt securities
by contractual maturities is as follows:
Series 7 Series 8 Series 9
-------- -------- --------
Due with 1 year $ 46,830 $ 41,838 $ 27,898
After 1 year through 5 years 186,296 172,193 109,199
After 5 years through 10 years 217,363 208,505 126,647
Over 10 years 40,568 40,282 46,952
---------- ---------- ----------
Total Amount Carried on
Balance Sheet $ 491,057 $ 462,818 $ 310,696
========== ========== ==========
Series 10 Series 11 Total
-------- -------- --------
Due with 1 year $ 21,913 $ 20,910 $ 159,389
After 1 year through 5 years 84,379 84,443 636,510
After 5 years through 10 years 90,949 101,156 744,620
Over 10 years 50,292 54,588 232,682
---------- ---------- ----------
Total Amount Carried on
Balance Sheet $ 247,533 $ 261,097 $1,773,201
========== ========== ==========
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 12 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 nine months ended December 31, 1997 and 1996 the General Partners
and affiliates are entitled to compensation and reimbursement for costs and
expenses incurred by Gateway as follows:
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.
Series 7 $ 0 $ 272
Series 8 0 0
Series 9 0 0
Series 10 0 0
Series 11 0 178
-------- --------
Total $ 0 $ 450
======== ========
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.
Series 7 $ 59,796 $ 58,500
Series 8 65,928 64,500
Series 9 36,797 36,000
Series 10 22,999 22,500
Series 11 18,399 18,000
-------- --------
Total $203,919 $199,500
======== ========
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.
Series 7 $ 11,059 $ 8,874
Series 8 12,192 9,785
Series 9 6,805 5,462
Series 10 4,253 3,412
Series 11 3,402 2,728
-------- --------
Total $ 37,711 $ 30,261
======== ========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:
As of December 31, 1997, 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:
SERIES 7 DECEMBER 31,
1997 MARCH 31, 1997
-------------- --------------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 7,732,089 $ 7,732,089
Accumulated accretion/(amortization) of the
excess of the book value of the underlying
assets of Project Partnerships over the 1,640 1,172
purchase price (1)
Cumulative equity in losses of Project
Partnerships (2) (4,524,421) (3,872,935)
Cumulative distributions received from
Project Partnerships (88,727) (67,207)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 793,335 793,335
Accumulated amortization of acquisition
fees and expenses (119,674) (102,908)
------------ ------------
Investments in Project Partnerships $ 3,794,242 $ 4,483,546
============ ============
(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 December 31, 1997 and
March 31, 1997 these excess costs were $18,470.
(2) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $70,487 for the period ended December 31, 1997 and cumulative suspended
losses of $40,687 for the year ended March 31, 1997 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of December 31, 1997, 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:
SERIES 8 DECEMBER 31,
1997 MARCH 31, 1997
-------------- --------------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 7,586,105 $ 7,586,105
Accumulated accretion/(amortization) of the
excess of the book value of the underlying
assets of Project Partnerships over the 2,851 2,317
purchase price (1)
Cumulative equity in losses of Project
Partnerships (2) (4,275,949) (3,408,634)
Cumulative distributions received from
Project Partnerships (72,953) (56,986)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 549,773 549,773
Accumulated amortization of acquisition
fees and expenses (68,651) (58,453)
------------ ------------
Investments in Project Partnerships $ 3,721,176 $ 4,614,122
============ ============
(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 December 31, 1997 and
March 31, 1997 these excess costs were $24,830.
(2) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $31,695 for the period ended December 31, 1997 and cumulative suspended
losses of $24,072 for the year ended March 31, 1997 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of December 31, 1997, 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:
SERIES 9 DECEMBER 31,
1997 MARCH 31, 1997
-------------- --------------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 4,914,116 $ 4,914,116
Accumulated accretion/(amortization) of the
excess of the book value of the underlying
assets of Project Partnerships over the 619 727
purchase price (1)
Cumulative equity in losses of Project
Partnerships (2) (1,564,744) (1,252,230)
Cumulative distributions received from
Project Partnerships (45,440) (35,343)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 244,087 244,087
Accumulated amortization of acquisition
fees and expenses (28,219) (22,990)
------------ ------------
Investments in Project Partnerships $ 3,520,419 $ 3,848,367
============ ============
(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 December 31, 1997 and
March 31, 1997 these excess costs were ($5,076).
(2) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $0 for the period ended December 31, 1997 and cumulative suspended losses
of $0 for the year ended March 31, 1997 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of December 31, 1997, 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:
SERIES 10 DECEMBER 31,
1997 MARCH 31, 1997
-------------- --------------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 3,914,672 $ 3,914,672
Accumulated accretion/(amortization) of the
excess of the book value of the underlying
assets of Project Partnerships over the (659) (497)
purchase price (1)
Cumulative equity in losses of Project
Partnerships (2) (652,351) (480,119)
Cumulative distributions received from
Project Partnerships (45,311) (41,506)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 196,738 196,738
Accumulated amortization of acquisition
fees and expenses (21,988) (17,770)
------------- ------------
Investments in Project Partnerships $ 3,391,101 $ 3,571,518
============= ============
(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 December 31, 1997 and
March 31, 1997 these excess costs were ($7,486).
(2) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $0 for the period ended December 31, 1997 and cumulative suspended losses
of $0 for the year ended March 31, 1997 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of December 31, 1997, 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:
SERIES 11 DECEMBER 31,
1997 MARCH 31, 1997
-------------- --------------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 4,128,042 $ 4,128,042
Accumulated accretion/(amortization) of the
excess of the book value of the underlying
assets of Project Partnerships over the 2,695 1,864
purchase price (1)
Cumulative equity in losses of Project
Partnerships (2) (506,357) (326,679)
Cumulative distributions received from
Project Partnerships (10,074) (5,095)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 290,335 290,335
Accumulated amortization of acquisition
fees and expenses (24,388) (18,166)
------------ -----------
Investments in Project Partnerships $ 3,880,253 $ 4,070,301
============= =============
(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 December 31, 1997 and
March 31, 1997 these excess costs were $38,728.
(2) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $0 for the period December 31, 1997 and cumulative suspended losses of $0
for the year ended March 31, 1997 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project Partnerships as of:
TOTAL SERIES 7 - 11 DECEMBER 31,
1997 MARCH 31, 1997
-------------- --------------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $28,275,024 $28,275,024
Accumulated accretion/(amortization) of the
excess of the book value of the underlying
assets of Project Partnerships over the 7,146 5,583
purchase price (1)
Cumulative equity in losses of Project
Partnerships (2) (11,523,822) (9,340,597)
Cumulative distributions received from
Project Partnerships (262,505) (206,137)
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 2,074,268 2,074,268
Accumulated amortization of acquisition
fees and expenses (262,920) (220,287)
------------ ------------
Investments in Project Partnerships $18,307,191 $20,587,854
============ =============
<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
September 30 of each year:
1997 1996
SERIES 7 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,686,219 $ 2,525,608
Investment properties, net 38,308,568 39,752,979
Other assets 90,325 110,200
------------ ------------
Total assets $41,085,112 $42,388,787
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 1,128,853 $ 1,131,625
Long-term debt 36,925,139 37,169,871
------------ ------------
Total liabilities 38,053,992 38,301,496
------------ ------------
Partners' equity
Limited Partner 3,029,581 4,036,157
General Partners 1,539 51,134
----------- -----------
Total Partners' equity 3,031,120 4,087,291
----------- -----------
Total liabilities and partners' equity $41,085,112 $42,388,787
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 3,245,082 $ 3,186,339
Expenses: ------------ ------------
Operating expenses 1,798,319 1,693,521
Interest expense 945,805 972,680
Depreciation and amortization 1,189,126 1,203,551
------------ ------------
Total expenses 3,933,250 3,869,752
------------ ------------
Net loss $ (688,168) $ (683,413)
============ ============
Other partners' share of net loss $ (6,882) $ (6,834)
============ ============
Partnerships' share of net loss $ (681,286) $ (676,579)
Suspended losses 29,800 0
------------ ------------
Equity in Losses of Project Partnerships $ (651,486) $ (676,579)
============ ============
<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
September 30 of each year:
1997 1996
SERIES 8 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,281,379 $ 2,013,830
Investment properties, net 41,162,473 42,827,854
Other assets 60,924 121,676
------------ ------------
Total assets $43,504,776 $44,963,360
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 1,303,061 $ 1,507,955
Long-term debt 39,022,328 39,134,012
------------ ------------
Total liabilities 40,325,389 40,641,967
------------ ------------
Partners' equity
Limited Partner 3,237,839 4,361,451
General Partners (58,452) (40,058)
----------- -----------
Total Partners' equity 3,179,387 4,321,393
----------- -----------
Total liabilities and partners' equity $43,504,776 $44,963,360
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 3,064,262 $ 2,995,784
Expenses: ------------ ------------
Operating expenses 1,875,622 1,777,253
Interest expense 843,794 854,717
Depreciation and amortization 1,228,622 1,163,922
------------ ------------
Total expenses 3,948,038 3,795,892
------------ ------------
Net loss $ (883,776) $ (800,108)
============ ============
Other partners' share of net loss $ (8,838) $ (8,001)
============ ============
Partnerships' share of net loss $ (874,938) $ (792,107)
Suspended losses 7,623 0
------------ ------------
Equity in Losses of Project Partnerships $ (867,315) $ (792,107)
============ ============
<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
September 30 of each year:
1997 1996
SERIES 9 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,504,001 $ 1,424,022
Investment properties, net 22,877,452 23,745,797
Other assets 8,094 10,982
------------ ------------
Total assets $24,389,547 $25,180,801
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 482,877 $ 673,224
Long-term debt 20,643,135 20,706,474
------------ ------------
Total liabilities 21,126,012 21,379,698
------------ ------------
Partners' equity
Limited Partner 3,298,749 3,792,392
General Partners (35,214) 8,711
----------- -----------
Total Partners' equity 3,263,535 3,801,103
----------- -----------
Total liabilities and partners' equity $24,389,547 $25,180,801
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 1,679,490 $ 1,658,806
Expenses: ------------ ------------
Operating expenses 870,225 855,326
Interest expense 473,440 488,828
Depreciation and amortization 651,496 660,112
------------ ------------
Total expenses 1,995,161 2,004,266
------------ ------------
Net loss $ (315,671) $ (345,460)
============ ============
Other partners' share of net loss $ (3,157) $ (3,455)
============ ============
Partnerships' share of net loss $ (312,514) $ (342,005)
Suspended losses 0 0
------------ ------------
Equity in Losses of Project Partnerships $ (312,514) $ (342,005)
============ ============
<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
September 30 of each year:
1997 1996
SERIES 10 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,150,150 $ 1,105,234
Investment properties, net 15,823,792 16,325,794
Other assets 16,808 14,927
------------ ------------
Total assets $16,990,750 $17,445,955
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 254,926 $ 345,100
Long-term debt 13,537,580 13,606,421
------------ ------------
Total liabilities 13,792,506 13,951,521
------------ ------------
Partners' equity
Limited Partner 3,224,137 3,455,342
General Partners (25,893) 39,092
----------- -----------
Total Partners' equity 3,198,244 3,494,434
----------- -----------
Total liabilities and partners' equity $16,990,750 $17,445,955
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 1,031,627 $ 1,043,912
Expenses: ------------ ------------
Operating expenses 602,548 590,576
Interest expense 218,730 224,633
Depreciation and amortization 384,321 378,295
------------ ------------
Total expenses 1,205,599 1,193,504
------------ ------------
Net loss $ (173,972) $ (149,592)
============ ============
Other partners' share of net loss $ (1,740) $ (1,496)
============ ============
Partnerships' share of net loss $ (172,232) $ (148,096)
Suspended losses 0 0
------------ ------------
Equity in Losses of Project Partnerships $ (172,232) $ (148,096)
============ ============
<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
September 30 of each year:
1997 1996
SERIES 11 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 839,203 $ 1,644,880
Investment properties, net 14,105,776 14,591,975
Other assets 43,818 131,613
------------ ------------
Total assets $14,988,797 $16,368,468
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 340,223 $ 1,125,960
Long-term debt 10,918,135 11,011,134
------------ ------------
Total liabilities 11,258,358 12,137,094
------------ ------------
Partners' equity
Limited Partner 3,624,208 4,061,928
General Partners 106,231 169,446
----------- -----------
Total Partners' equity 3,730,439 4,231,374
----------- -----------
Total liabilities and partners' equity $14,988,797 $16,368,468
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 1,093,944 $ 1,063,736
Expenses: ------------ ------------
Operating expenses 524,330 528,581
Interest expense 356,593 299,725
Depreciation and amortization 394,514 160,916
------------ ------------
Total expenses 1,275,437 989,222
------------ ------------
Net loss $ (181,493) $ 74,514
============ ============
Other partners' share of net loss $ (1,815) $ 745
============ ============
Partnerships' share of net loss $ (179,678) $ 73,769
Suspended losses 0 0
------------ ------------
Equity in Losses of Project Partnerships $ (179,678) $ 73,769
============ ============
<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
September 30 of each year:
1997 1996
TOTAL SERIES 7 - 11 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 8,460,952 $ 8,713,574
Investment properties, net 132,278,061 137,244,399
Other assets 219,969 389,398
------------ ------------
Total assets $140,958,982 $146,347,371
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 3,509,940 $ 4,783,864
Long-term debt 121,046,317 121,627,912
------------ ------------
Total liabilities 124,556,257 126,411,776
------------ ------------
Partners' equity
Limited Partner 16,414,514 19,707,270
General Partners (11,789) 228,325
----------- -----------
Total Partners' equity 16,402,725 19,935,595
----------- -----------
Total liabilities and partners' equity $140,958,982 $146,347,371
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 10,114,405 $ 9,948,577
Expenses: ------------ ------------
Operating expenses 5,671,044 5,445,257
Interest expense 2,838,362 2,840,583
Depreciation and amortization 3,848,079 3,566,796
------------ ------------
Total expenses 12,357,485 11,852,636
------------ ------------
Net loss $ (2,243,080) $ (1,904,059)
============ ============
Other partners' share of net loss $ (22,432) $ (19,041)
============ ============
Partnerships' share of net loss $ (2,220,648) $ (1,885,018)
Suspended losses 37,423 0
------------ ------------
Equity in Losses of Project Partnerships $ (2,183,225) $ (1,885,018)
============ ============
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
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.
As disclosed on the statement of operations for each Series, except as
described below, interest income is comparable for the nine and three months
ended December 31, 1997 and December 31, 1996. The General and
Administrative expenses - General Partner and General and Administrative
expenses - Other for the three and nine months ended December 31, 1997 are
comparable to December 31, 1996. There were no unusual variations in the
operating results between these two periods.
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. (Payment of any
Asset Management Fee unpaid at the time Gateway sells its interests in the
Project Partnerships is subordinated to the investors' return of their
original capital contribution.)
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 were comparable for the nine months ended December 31, 1997 and
December 31, 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 those 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 December 31, 1997, the Series had $228,200 of short-term investments
(Cash and Cash Equivalents). It also had $491,057 in Zero Coupon Treasuries
with annual maturities providing $50,000 in fiscal year 1999 increasing to
$80,000 in fiscal year 2008. 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
$721,485 for the nine months ended December 31, 1997. However, after
adjusting for Equity in Losses of Project Partnerships of $651,486 and the
changes in operating assets and liabilities, net cash used in operating
activities was $61,300, primarily due to the payment of the Asset Management
Fee of $40,364. Cash provided by investing activities totaled $21,520,
consisting of cash distributions from the Project Partnerships.
Series 8 - Gateway closed this Series on September 28, 1993 after receiving
$9,980,000 from 664 Limited Partner investors. Equity in Losses of Project
Partnerships were comparable for the nine months ended December 31, 1997 and
December 31, 1996. At December 31, 1997, the Series had $357,576 of short-
term investments (Cash and Cash Equivalents). It also had $462,819 in Zero
Coupon Treasuries with annual maturities providing $45,000 in fiscal year
1999 increasing to $82,000 in fiscal year 2008. 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
$936,761 for the nine months ended December 31, 1997. However, after
adjusting for Equity in Losses of Project Partnerships of $867,315 and the
changes in operating assets and liabilities, net cash used in operating
activities was $54,882, primarily due to the payment of the Asset Management
Fee of $39,368. Cash provided by investing activities totaled $16,420,
consisting primarily of cash distributions of $15,967 from the Project
Partnerships. There were no unusual events or trends to describe.
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 were comparable for the nine months ended December 31, 1997 and
December 31, 1996. At December 31, 1997, the Series had $143,905 of short-
term investments (Cash and Cash Equivalents). It also had $310,696 in Zero
Coupon Treasuries with annual maturities providing $29,000 in fiscal year
1999 increasing to $47,000 in fiscal year 2009. 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
$352,008 for the nine months ended December 31, 1997. However, after
adjusting for Equity in Losses of Project Partnerships of $312,514 and the
changes in operating assets and liabilities, net cash used in operating
activities was $28,005, primarily due to the payment of the Asset Management
Fee of $17,269. Cash provided by investing activities totaled $10,097,
consisting of cash distributions from the Project Partnerships. There were
no unusual events or trends to describe.
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 were comparable for the nine months ended December 31, 1997 and
December 31, 1996. At December 31, 1997, the Series had $166,262 of short-
term investments (Cash and Cash Equivalents). It also had $247,533 in Zero
Coupon Treasuries with annual maturities providing $24,000 in fiscal year
1999 increasing to $40,000 in fiscal year 2010. 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
$191,187 for the nine months ended December 31, 1997. However, after
adjusting for Equity in Losses of Project Partnerships of $172,232 and the
changes in operating assets and liabilities, net cash used in operating
activities was $29,574, primarily due to the payment of the Asset Management
Fee of $25,826. Cash used in investing activities totaled $3,907, consisting
of $3,805 of cash distributions from the Project Partnerships and a decrease
in Payable to the Project Partnerships of $7,712. There were no unusual
events or trends to describe.
Series 11 - Gateway closed this Series on April 29, 1994 after receiving
$5,127,000 from 330 Limited investors. Equity in losses of Project
Partnerships increased from income of $73,769 for the nine months ended
December 31, 1996 to losses of $179,678 for the nine months ended December
31, 1997 due to the number of properties moving from the construction and
rent-up phases to fully operational. At December 31, 1997, the Series had
$152,984 of short-term investments (Cash and Cash Equivalents). It also had
$261,097 in Zero Coupon Treasuries with annual maturities providing $23,000
in fiscal year 1999 increasing to $44,000 in fiscal year 2010. 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
$193,042 for the nine months ended December 31, 1997. However, after
adjusting for Equity in Losses of Project Partnerships of $179,678 and the
changes in operating assets and liabilities, net cash used in operating
activities was $21,380, primarily due to the payment of the Asset Management
Fee of $17,661. Cash provided by investing activities totaled $4,979,
consisting of cash distributions from the Project Partnerships. There were
no unusual events or trends to describe.
<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: Raymond James Tax Credit Funds,Inc.
Date: February 11, 1998 By:/s/ Ronald M. Diner
Ronald M. Diner
President
Date: February 11, 1998 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
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> DEC-31-1997
<CASH> 1,048,927
<SECURITIES> 1,773,202
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,208,316
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 21,129,320
<CURRENT-LIABILITIES> 173,572
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 20,330,943
<TOTAL-LIABILITY-AND-EQUITY> 21,129,320
<SALES> 0
<TOTAL-REVENUES> 127,355
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 338,613
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,394,483)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,394,483)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,394,483)
<EPS-PRIMARY> (64.42)<F1>
<EPS-DILUTED> (64.42)<F1>
<FN>
<F1>EPS IS NET LOSS PER $1,000 LIMITED PARTNERSHIP UNIT
</FN>
</TABLE>
