GTWY2
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, 1998
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, 1998
Units of Limited Partnership
Interest: $1,000 per unit 33,799
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II, 1998 Form 10-K, filed with the
Securities and Exchange Commission on July 13, 1998
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 JUNE 30, MARCH 31,
1998 1998
------- -------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 294,245 $ 286,106
Investments in Securities 48,382 47,675
Receivable from Project Partnerships 0 0
------------ ------------
Total Current Assets $ 342,627 $ 333,781
Investments in Securities 411,235 404,220
Investments in Project Partnerships, Net 3,278,737 3,517,852
----------- -----------
Total Assets $ 4,032,599 $ 4,255,853
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 52,016 $ 55,760
Payable to Project Partnerships 0 0
----------- -----------
Total Current Liabilities 52,016 55,760
----------- -----------
Long-Term Liabilities:
Payable to General Partners 247,948 226,886
----------- -----------
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, 1998 and March 31,1998) 3,786,587 4,024,753
General Partners (53,952) (51,546)
----------- -----------
Total Partners' Equity $ 3,732,635 $ 3,973,207
----------- -----------
Total Liabilities and Partners' Equity $ 4,032,599 $ 4,255,853
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 8 JUNE 30, MARCH 31,
1998 1998
------- -------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 410,251 $ 410,727
Investments in Securities 43,573 42,967
Receivable from Project Partnerships 0 0
------------ ------------
Total Current Assets $ 453,824 $ 453,694
Investments in Securities 391,229 384,906
Investments in Project Partnerships, Net 3,333,228 3,608,229
----------- -----------
Total Assets $ 4,178,281 $ 4,446,829
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 42,859 $ 46,515
Payable to Project Partnerships 0 0
----------- -----------
Total Current Liabilities 42,859 46,515
----------- -----------
Long-Term Liabilities:
Payable to General Partners 291,000 269,107
----------- -----------
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, 1998 and March 31,1998) 3,893,603 4,177,520
General Partners (49,181) (46,313)
----------- -----------
Total Partners' Equity $ 3,844,422 $ 4,131,207
----------- -----------
Total Liabilities and Partners' Equity $ 4,178,281 $ 4,446,829
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 9 JUNE 30, MARCH 31,
1998 1998
------- -------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 182,044 $ 180,104
Investments in Securities 28,159 27,803
Receivable from Project Partnerships 0 0
------------ ------------
Total Current Assets $ 210,203 $ 207,907
Investments in Securities 263,026 259,181
Investments in Project Partnerships, Net 3,221,161 3,363,377
----------- -----------
Total Assets $ 3,694,390 $ 3,830,465
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 24,469 $ 26,911
Payable to Project Partnerships 0 0
----------- -----------
Total Current Liabilities 24,469 26,911
----------- -----------
Long-Term Liabilities:
Payable to General Partners 163,737 151,733
----------- -----------
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 June 30, 1998 and March 31,1998) 3,525,959 3,670,140
General Partners (19,775) (18,319)
----------- -----------
Total Partners' Equity $ 3,506,184 $ 3,651,821
----------- -----------
Total Liabilities and Partners' Equity $ 3,694,390 $ 3,830,465
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 10 JUNE 30, MARCH 31,
1998 1998
------- -------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 205,962 $ 202,435
Investments in Securities 23,207 22,865
Receivable from Project Partnerships 0 0
------------ ------------
Total Current Assets $ 229,169 $ 225,300
Investments in Securities 210,017 206,525
Investments in Project Partnerships, Net 3,288,575 3,352,669
----------- -----------
Total Assets $ 3,727,761 $ 3,784,494
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 27,909 $ 30,279
Payable to Project Partnerships 0 0
----------- -----------
Total Current Liabilities 27,909 30,279
----------- -----------
Long-Term Liabilities:
Payable to General Partners 53,229 45,106
----------- -----------
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, 1998 and March 31,1998) 3,654,337 3,716,198
General Partners (7,714) (7,089)
----------- -----------
Total Partners' Equity $ 3,646,623 $ 3,709,109
----------- -----------
Total Liabilities and Partners' Equity $ 3,727,761 $ 3,784,494
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 11 JUNE 30, MARCH 31,
1998 1998
------- -------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 208,647 $ 208,198
Investments in Securities 22,155 21,794
Receivable from Project Partnerships 0 0
------------ ------------
Total Current Assets $ 230,802 $ 229,992
Investments in Securities 226,812 222,768
Investments in Project Partnerships, Net 3,797,733 3,861,731
----------- -----------
Total Assets $ 4,255,347 $ 4,314,491
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 27,443 $ 29,179
Payable to Project Partnerships 0 0
----------- -----------
Total Current Liabilities 27,443 29,179
----------- -----------
Long-Term Liabilities:
Payable to General Partners 23,996 17,499
----------- -----------
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, 1998 and March 31,1998) 4,207,860 4,271,126
General Partners (3,952) (3,313)
----------- -----------
Total Partners' Equity $ 4,203,908 $ 4,267,813
----------- -----------
Total Liabilities and Partners' Equity $ 4,255,347 $ 4,314,491
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
TOTAL SERIES 7 - 11 JUNE 30, MARCH 31,
1998 1998
------- -------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 1,301,149 $ 1,287,570
Investments in Securities 165,476 163,104
Receivable from Project Partnerships 0 0
------------ ------------
Total Current Assets $ 1,466,625 $ 1,450,674
Investments in Securities 1,502,319 1,477,600
Investments in Project Partnerships, Net 16,919,434 17,703,858
----------- -----------
Total Assets $19,888,378 $20,632,132
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 174,696 $ 188,644
Payable to Project Partnerships 0 0
----------- -----------
Total Current Liabilities 174,696 188,644
----------- -----------
Long-Term Liabilities:
Payable to General Partners 779,910 710,331
----------- -----------
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, 1998 and March 31,1998) 19,068,346 19,859,737
General Partners (134,574) (126,580)
----------- -----------
Total Partners' Equity $18,933,772 $19,733,157
----------- -----------
Total Liabilities and Partners' Equity $19,888,378 $20,632,132
=========== ===========
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 JUNE 30,
(Unaudited)
SERIES 7 1998 1997
---- ----
Revenues:
Interest Income $ 11,180 $ 11,163
----------- -----------
Expenses:
Asset Management Fee-General Partner 22,108 19,500
General and Administrative:
General Partner 3,282 3,318
Other 2,827 2,373
Amortization 5,551 5,136
----------- -----------
Total Expenses 33,768 30,327
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (22,588) (19,164)
Equity in Losses of Project
Partnerships (217,984) (242,513)
---------- ----------
Net Loss $ (240,572) $ (261,677)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (238,166) $ (259,060)
General Partners (2,406) (2,617)
----------- -----------
$ (240,572) $ (261,677)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (22.91) $ (24.92)
============ ============
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
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 8 1998 1997
---- ----
Revenues:
Interest Income $ 11,888 $ 11,924
----------- -----------
Expenses:
Asset Management Fee-General Partner 23,047 21,500
General and Administrative:
General Partner 3,618 3,659
Other 3,319 2,594
Amortization 2,492 2,314
----------- -----------
Total Expenses 32,476 30,067
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (20,588) (18,143)
Equity in Losses of Project
Partnerships (266,197) (265,543)
---------- ----------
Net Loss $ (286,785) $ (283,686)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (283,917) $ (280,849)
General Partners (2,868) (2,837)
----------- -----------
$ (286,785) $ (283,686)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (28.45) $ (28.14)
============ ============
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 JUNE 30,
(Unaudited)
SERIES 9 1998 1997
---- ----
Revenues:
Interest Income $ 6,388 $ 6,306
----------- -----------
Expenses:
Asset Management Fee-General Partner 12,648 12,000
General and Administrative:
General Partner 2,020 2,042
Other 1,902 1,387
Amortization 1,743 1,779
----------- -----------
Total Expenses 18,313 17,208
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (11,925) (10,902)
Equity in Losses of Project
Partnerships (133,712) (95,998)
---------- ----------
Net Loss $ (145,637) $ (106,900)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (144,181) $ (105,831)
General Partners (1,456) (1,069)
----------- -----------
$ (145,637) $ (106,900)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (23.05) $ (16.92)
============ ============
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 JUNE 30,
(Unaudited)
SERIES 10 1998 1997
---- ----
Revenues:
Interest Income $ 6,295 $ 6,327
----------- -----------
Expenses:
Asset Management Fee-General Partner 8,525 7,500
General and Administrative:
General Partner 1,262 1,276
Other 1,445 963
Amortization 1,460 1,460
----------- -----------
Total Expenses 12,638 11,199
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (6,343) (4,872)
Equity in Losses of Project
Partnerships (56,143) (37,779)
---------- ----------
Net Loss $ (62,486) $ (42,651)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (61,861) $ (42,224)
General Partners (625) (427)
----------- -----------
$ (62,486) $ (42,651)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (12.27) $ (8.37)
============ ============
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 JUNE 30,
(Unaudited)
SERIES 11 1998 1997
---- ----
Revenues:
Interest Income $ 6,914 $ 6,530
----------- -----------
Expenses:
Asset Management Fee-General Partner 6,820 6,000
General and Administrative:
General Partner 1,010 1,021
Other 1,173 871
Amortization 2,074 1,797
----------- -----------
Total Expenses 11,077 9,689
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (4,163) (3,159)
Equity in Losses of Project
Partnerships (59,742) (46,367)
---------- ----------
Net Loss $ (63,905) $ (49,256)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (63,266) $ (49,031)
General Partners (639) (495)
----------- -----------
$ (63,905) $ (49,526)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (12.34) $ (9.56)
============ ============
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 JUNE 30,
(Unaudited)
TOTAL SERIES 7 - 11 1998 1997
---- ----
Revenues:
Interest Income $ 42,665 $ 42,250
----------- -----------
Expenses:
Asset Management Fee-General Partner 73,148 66,500
General and Administrative:
General Partner 11,192 11,316
Other 10,666 8,188
Amortization 13,266 12,486
----------- -----------
Total Expenses 108,272 98,490
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (65,607) (56,240)
Equity in Losses of Project
Partnerships (733,778) (688,200)
---------- ----------
Net Loss $ (799,385) $ (744,440)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (791,391) $ (736,996)
General Partners (7,994) (7,444)
----------- -----------
$ (799,385) $ (744,440)
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997:
Limited General
SERIES 7 Partners Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 5,025,507 $ (41,437) $ 4,984,070
Net Loss (259,060) (2,617) (261,677)
----------- ----------- -----------
Balance at June 30, 1997 $ 4,766,447 $ (44,054) $ 4,722,393
============ ============ ============
Balance at March 31, 1998 $ 4,024,753 $ (51,546) $ 3,973,207
Net Loss (238,166) (2,406) (240,572)
----------- ----------- -----------
Balance at June 30, 1998 $ 3,786,587 $ (53,952) $ 3,732,635
============ ============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997:
Limited General
SERIES 8 Partners Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 5,277,849 $ (35,704) $ 5,192,145
Net Loss (280,849) (2,837) (283,686)
----------- ----------- -----------
Balance at June 30, 1997 $ 4,947,000 $ (38,541) $ 4,908,459
============ ============ ============
Balance at March 31, 1998 $ 4,177,520 $ (46,313) $ 4,131,207
Net Loss (283,917) (2,868) (286,785)
----------- ----------- -----------
Balance at June 30, 1998 $ 3,893,603 $ (49,181) $ 3,844,422
============ ============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997:
Limited General
SERIES 9 Partners Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 4,177,521 $ (13,194) $ 4,164,327
Net Loss (105,831) (1,069) (106,900)
----------- ----------- -----------
Balance at June 30, 1997 $ 4,071,690 $ (14,263) $ 4,057,427
============ ============ ============
Balance at March 31, 1998 $ 3,670,140 $ (18,319) $ 3,651,821
Net Loss (144,181) (1,456) (145,637)
----------- ----------- -----------
Balance at June 30, 1998 $ 3,525,959 $ (19,775) $ 3,506,184
============ ============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997:
Limited General
SERIES 10 Partners Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 3,938,729 $ (4,841) $ 3,933,888
Net Loss (42,224) (427) (42,651)
----------- ----------- -----------
Balance at June 30, 1997 $ 3,896,505 $ (5,268) $ 3,891,237
============ ============ ============
Balance at March 31, 1998 $ 3,716,198 $ (7,089) $ 3,709,109
Net Loss (61,861) (625) (62,486)
----------- ----------- -----------
Balance at June 30, 1998 $ 3,654,337 $ (7,714) $ 3,646,623
============ ============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997:
Limited General
SERIES 11 Partners Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 4,452,477 $ (1,481) $ 4,450,996
Net Loss (49,031) (495) (49,526)
----------- ----------- -----------
Balance at June 30, 1997 $ 4,403,446 $ (1,976) $ 4,401,470
============ ============ ============
Balance at March 31, 1998 $ 4,271,126 $ (3,313) $ 4,267,813
Net Loss (63,266) (639) (63,905)
----------- ----------- -----------
Balance at June 30, 1998 $ 4,207,860 $ (3,952) $ 4,203,908
============ ============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997:
Limited General
TOTAL SERIES 7 - 11 Partners Partners Total
--------- -------- -----
Balance at March 31, 1997 $22,822,083 $ (96,657) $22,725,426
Net Loss (736,996) (7,444) (744,440)
----------- ----------- -----------
Balance at June 30, 1997 $22,085,087 $ (104,101) $21,980,986
============ ============ ============
Balance at March 31, 1998 $19,859,737 $ (126,580) $19,733,157
Net Loss (791,391) (7,994) (799,385)
----------- ----------- -----------
Balance at June 30, 1998 $19,068,346 $ (134,574) $18,933,772
============ ============ ============
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 7 1998 1997
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (240,572) $ (261,677)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 5,551 5,136
Accreted Interest Income on Investments
in Securities (7,722) (7,898)
Equity in Losses of Project Partnerships 217,984 242,513
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 17,318 19,025
----------- -----------
Net Cash Used in Operating Activities (7,441) (2,901)
----------- -----------
Cash Flows from Investing Activities:
Investments in Project Partnerships 0 0
(Increase) Decrease in Receivable from
Project Partnerships 0 0
Acquisition Fees and Expenses 0 0
Distributions Received from Project
Partnerships 15,580 12,351
Increase (Decrease) in Payable to Project
Partnerships - Capital Contributions 0 0
----------- -----------
Net Cash Provided by (Used in)
Investing Activities 15,580 12,351
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents 8,139 9,450
Cash and Cash Equivalents at Beginning of
Year 286,106 267,980
----------- -----------
Cash and Cash Equivalents at End of Year $ 294,245 $ 277,430
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 8 1998 1997
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (286,785) $ (283,686)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 2,492 2,314
Accreted Interest Income on Investments
in Securities (6,929) (7,100)
Equity in Losses of Project Partnership 266,197 265,543
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 18,237 21,088
----------- -----------
Net Cash Used in Operating Activities (6,788) (1,841)
----------- -----------
Cash Flows from Investing Activities:
Investments in Project Partnerships 0 0
(Increase) Decrease in Receivable from
Project Partnerships 0 0
Acquisition Fees and Expenses 0 0
Distributions Received from Project
Partnerships 6,312 4,407
Increase (Decrease) in Payable to Project
Partnerships - Capital Contributions 0 0
----------- -----------
Net Cash Provided by (Used in)
Investing Activities 6,312 4,407
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents (476) 2,566
Cash and Cash Equivalents at Beginning of
Year 410,727 396,038
----------- -----------
Cash and Cash Equivalents at End of Year $ 410,251 $ 398,604
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 9 1998 1997
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (145,637) $ (106,900)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 1,743 1,779
Accreted Interest Income on Investments
in Securities (4,201) (4,336)
Equity in Losses of Project Partnerships 133,712 95,998
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 9,562 11,603
----------- -----------
Net Cash Used in Operating Activities (4,821) (1,856)
----------- -----------
Cash Flows from Investing Activities:
Investments in Project Partnerships 0 0
Increase in Receivable from Other Series (2,208) 0
(Increase) Decrease in Receivable from
Project Partnerships 2,208 (2,208)
Acquisition Fees and Expenses 0 0
Distributions Received from Project
Partnerships 6,761 3,216
Increase (Decrease) in Payable -
Other Series 1,003 0
Project Partnerships - Capital
Contributions (1,003) 1,003
----------- -----------
Net Cash Provided by (Used in) 6,761 2,011
Investing Activities ----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents 1,940 155
Cash and Cash Equivalents at Beginning of
Year 180,104 161,813
----------- -----------
Cash and Cash Equivalents at End of Year $ 182,044 $ 161,968
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 10 1998 1997
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (62,486) $ (42,651)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 1,406 1,460
Accreted Interest Income on Investments
in Securities (3,834) (3,885)
Equity in Losses of Project Partnerships 56,143 37,779
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 5,753 6,916
----------- -----------
Net Cash Used in Operating Activities (3,018) (381)
----------- -----------
Cash Flows from Investing Activities:
Investments in Project Partnerships 0 0
Increase in Receivable from Other Series (1,003) 0
(Increase) Decrease in Receivable from
Project Partnerships 1,003 (1,003)
Acquisition Fees and Expenses 0 0
Distributions Received from Project
Partnerships 6,545 2,383
Increase (Decrease) in Payable -
Other Series 2,208 0
Project Partnerships - Capital
Contributions (2,208) 2,208
----------- -----------
Net Cash Provided by (Used in)
Investing Activities 6,545 3,588
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents 3,527 3,207
Cash and Cash Equivalents at Beginning of
Year 202,435 199,743
----------- -----------
Cash and Cash Equivalents at End of Year $ 205,962 $ 202,950
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 11 1998 1997
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (63,905) $ (49,526)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 2,074 1,797
Accreted Interest Income on Investments
in Securities (4,406) (4,466)
Equity in Losses of Project Partnerships 59,742 46,367
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 4,762 5,209
----------- -----------
Net Cash Used in Operating Activities (1,733) (619)
----------- -----------
Cash Flows from Investing Activities:
Investments in Project Partnerships 0 0
(Increase) Decrease in Receivable from
Project Partnerships 0 0
Acquisition Fees and Expenses 0 0
Distributions Received from Project
Partnerships 2,182 3,682
Increase (Decrease) in Payable to Project
Partnerships - Capital Contributions 0 0
----------- -----------
Net Cash Provided by (Used in)
Investing Activities 2,182 3,682
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents 449 3,063
Cash and Cash Equivalents at Beginning of
Year 208,198 169,385
----------- -----------
Cash and Cash Equivalents at End of Year $ 208,647 $ 172,448
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
TOTAL SERIES 7 - 11 1998 1997
- ------------------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (799,385) $ (744,440)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 13,266 12,486
Accreted Interest Income on Investments
in Securities (27,092) (27,685)
Equity in Losses of Project Partnership 733,778 688,200
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 55,632 63,841
----------- -----------
Net Cash Used in Operating Activities (23,801) (7,598)
----------- -----------
Cash Flows from Investing Activities:
Investments in Project Partnerships 0 0
Increase in Receivable from Other Series (3,211) 0
(Increase) Decrease in Receivable from
Project Partnerships 3,211 (3,211)
Acquisition Fees and Expenses 0 0
Distributions Received from Project
Partnerships 37,380 26,039
Increase (Decrease) in Payable -
Other Series 3,211 0
Project Partnerships - Capital
Contributions (3,211) 3,211
----------- -----------
Net Cash Provided by (Used in)
Investing Activities 37,380 26,039
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents 13,579 18,441
Cash and Cash Equivalents at Beginning of
Year 1,287,570 1,194,959
----------- -----------
Cash and Cash Equivalents at End of Year $ 1,301,149 $ 1,213,400
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
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 June 30, 1998, 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 in
curred.
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, and
3) Decreased for the amortization of the acquisition fees and expenses.
Amortization is calculated on a straight line basis over 35 years, as
this is the average estimated useful life of the underlying assets. The
amortization 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.
Gateway recognizes a decline in the carrying value of its investment in
the Project Partnerships when there is evidence of a non-temporary decline
in the recoverable amount of the investment. There is a possibility that
the estimates relating to reserves for non-temporary declines in carrying
value of the investments in Project Partnerships may be subject to material
near term adjustments.
Gateway, as a limited partner in the Project Partnerships, is subject to
risks inherent in the ownership of property which are beyond its control,
such as fluctuations in occupancy rates and operating expenses, variations
in rental schedules, proper maintenance and continued eligibility of tax
credits. If the cost of operating a property exceeds the rental income
earned thereon, Gateway may deem it in its best interest to voluntarily
provide funds in order to protect its investment.
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, 1998. 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, 1998 Balance Sheet includes Investment in Securities
consisting of U.S. Treasury Security Strips which represents their cost,
plus accreted interest income of $149,831 for Series 7, $126,331 for Series
8, $68,889 for Series 9, $58,111 for Series 10 and $63,772 for Series 11.
Gross Unrealized
Estimated Market Cost Plus Gains and
Value Accreted Interest (Losses)
----------------- ----------------- ----------------
Series 2 $ 496,985 $ 459,617 $ 37,368
Series 3 461,691 434,800 26,891
Series 4 299,782 291,185 8,597
Series 5 231,082 233,224 (2,142)
Series 6 277,211 248,968 28,243
As of June 30, 1998, the cost and accreted interest of debt securities by
contractual maturities is as follows:
Series 7 Series 8 Series 9
-------- -------- --------
Due with 1 year $ 48,382 $ 43,573 $ 28,159
After 1 year through 5 years 190,655 177,749 110,873
After 5 years through 10 years 220,580 213,478 128,246
Over 10 years 0 0 23,907
---------- ---------- ----------
Total Amount Carried on
Balance Sheet $ 459,617 $ 434,800 $ 291,185
========== ========== ==========
Series 10 Series 11 Total
-------- -------- --------
Due with 1 year $ 23,207 $ 22,155 $ 165,476
After 1 year through 5 years 83,836 86,872 649,985
After 5 years through 10 years 91,490 102,743 756,537
Over 10 years 34,691 37,198 95,796
---------- ---------- ----------
Total Amount Carried on
Balance Sheet $ 233,224 $ 248,968 $1,667,794
========== ========== ==========
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 three months ended June 30 1998 and 1997 the General Partners and
affiliates are entitled to compensation and reimbursement for costs and
expenses incurred by Gateway as follows:
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 $ 22,108 $ 19,500
Series 8 23,047 21,500
Series 9 12,648 12,000
Series 10 8,525 7,500
Series 11 6,820 6,000
-------- --------
Total $ 73,148 $ 66,500
======== ========
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 $ 3,282 $ 3,318
Series 8 3,618 3,659
Series 9 2,020 2,042
Series 10 1,262 1,276
Series 11 1,010 1,021
-------- --------
Total $ 11,192 $ 11,316
======== ========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:
As of June 30, 1998, 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 JUNE 30, MARCH 31,
1998 1998
-------------- -----------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 7,732,089 $ 7,732,089
Cumulative equity in losses of Project
Partnerships (1) (5,000,910) (4,782,926)
Cumulative distributions received from
Project Partnerships (116,844) (101,264)
----------- -----------
Investment in Project Partnerships before
adjustment 2,614,335 2,847,899
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 793,335 793,335
Accumulated amortization of acquisition
fees and expenses (128,933) (123,382)
------------ ------------
Investments in Project Partnerships $ 3,278,737 $ 3,517,852
============ ============
(1) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $92,188 for the period ended June 30, 1998 and cumulative suspended
losses of $82,376 for the year ended March 31, 1998 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1998, 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 JUNE 30, MARCH 31,
1998 1998
-------------- -----------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 7,586,105 $ 7,586,105
Cumulative equity in losses of Project
Partnerships (1) (4,638,286) (4,372,089)
Cumulative distributions received from
Project Partnerships (91,034) (84,722)
----------- -----------
Investment in Project Partnerships before
adjustment 2,856,785 3,129,294
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 549,773 549,773
Accumulated amortization of acquisition
fees and expenses (73,330) (70,838)
------------ ------------
Investments in Project Partnerships $ 3,333,228 $ 3,608,229
============ ============
(1) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $96,705 for the period ended June 30, 1998 and cumulative suspended
losses of $79,383 for the year ended March 31, 1998 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1998, 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 JUNE 30, MARCH 31,
1998 1998
-------------- -----------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 4,914,116 $ 4,914,116
Cumulative equity in losses of Project
Partnerships (1) (1,845,571) (1,711,859)
Cumulative distributions received from
Project Partnerships (61,395) (54,634)
----------- ----------
Investment in Project Partnerships before
adjustment 3,007,150 3,147,623
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 244,087 244,087
Accumulated amortization of acquisition
fees and expenses (30,076) (28,333)
------------ ------------
Investments in Project Partnerships $ 3,221,161 $ 3,363,377
============ ============
(1) 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 June 30, 1998 and cumulative suspended losses of
$0 for the year ended March 31, 1998 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1998, 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 JUNE 30, MARCH 31,
1998 1998
-------------- -----------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 3,914,672 $ 3,914,672
Cumulative equity in losses of Project
Partnerships (1) (731,445) (675,302)
Cumulative distributions received from
Project Partnerships (65,899) (59,354)
----------- ----------
Investment in Project Partnerships before
adjustment 3,117,328 3,180,016
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 196,738 196,738
Accumulated amortization of acquisition
fees and expenses (25,491) (24,085)
------------- ------------
Investments in Project Partnerships $ 3,288,575 $ 3,352,669
============= ============
(1) 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 June 30, 1998 and cumulative suspended losses of
$0 for the year ended March 31, 1998 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1998, 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 JUNE 30, MARCH 31,
1998 1998
-------------- -----------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $ 4,128,042 $ 4,128,042
Cumulative equity in losses of Project
Partnerships (1) (549,785) (490,043)
Cumulative distributions received from
Project Partnerships (45,991) (43,809)
----------- -----------
Investment in Project Partnerships before
adjustment 3,532,266 3,594,190
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 290,335 290,335
Accumulated amortization of acquisition
fees and expenses (24,868) (22,794)
------------ -----------
Investments in Project Partnerships $ 3,797,733 $ 3,861,731
============= =============
(1) 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 June 30, 1998 and cumulative suspended losses of $0
for the year ended March 31, 1998 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 JUNE 30, MARCH 31,
1998 1998
-------------- -----------
Capital Contributions to Project Partner-
ships and purchase price paid for limited
partner interests in Project Partnerships $28,275,024 $28,275,024
Cumulative equity in losses of Project
Partnerships (1) (12,765,997) (12,032,219)
Cumulative distributions received from
Project Partnerships (381,163) (343,783)
------------ -----------
Investment in Project Partnerships before
adjustment 15,127,864 15,899,022
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 (282,698) (269,432)
------------ ------------
Investments in Project Partnerships $16,919,434 $17,703,858
============ =============
<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:
1998 1997
SERIES 7 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,673,659 $ 2,382,026
Investment properties, net 37,570,324 39,061,797
Other assets 61,947 97,380
------------ ------------
Total assets $40,305,930 $41,541,203
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 948,112 $ 1,115,422
Long-term debt 36,850,924 36,950,678
------------ ------------
Total liabilities 37,799,036 38,066,100
------------ ------------
Partners' equity
Limited Partner 2,497,459 3,461,558
General Partners 9,435 13,545
----------- -----------
Total Partners' equity 2,506,894 3,475,103
----------- -----------
Total liabilities and partners' equity $40,305,930 $41,541,203
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 1,064,821 $ 1,073,643
Expenses: ------------ ------------
Operating expenses 615,770 619,352
Interest expense 289,173 307,713
Depreciation and amortization 389,975 402,267
------------ ------------
Total expenses 1,294,918 1,329,332
------------ ------------
Net loss $ (230,097) $ (255,689)
============ ============
Other partners' share of net loss $ (2,301) $ (2,557)
============ ============
Partnerships' share of net loss $ (227,796) $ (253,132)
Suspended losses 9,812 10,619
------------ ------------
Equity in Losses of Project Partnerships $ (217,984) $ (242,513)
============ ============
<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:
1998 1997
SERIES 8 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,250,729 $ 1,988,966
Investment properties, net 40,395,958 41,981,767
Other assets 61,476 65,566
------------ ------------
Total assets $42,708,163 $44,036,299
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 1,110,445 $ 1,246,574
Long-term debt 38,898,362 38,998,505
------------ ------------
Total liabilities 40,008,807 40,245,079
------------ ------------
Partners' equity
Limited Partner 2,815,407 3,843,554
General Partners (116,051) (52,334)
----------- -----------
Total Partners' equity 2,699,356 3,791,220
----------- -----------
Total liabilities and partners' equity $42,708,163 $44,036,299
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 1,026,624 $ 1,063,045
Expenses: ------------ ------------
Operating expenses 627,548 682,122
Interest expense 278,514 267,830
Depreciation and amortization 406,945 385,116
------------ ------------
Total expenses 1,313,007 1,335,068
------------ ------------
Net loss $ (286,383) $ (272,023)
============ ============
Other partners' share of net loss $ (2,864) $ (2,720)
============ ============
Partnerships' share of net loss $ (283,519) $ (269,303)
Suspended losses 17,322 3,760
------------ ------------
Equity in Losses of Project Partnerships $ (266,197) $ (265,543)
<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:
1998 1997
SERIES 9 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,440,168 $ 1,333,321
Investment properties, net 22,415,702 23,295,181
Other assets 79,712 188,752
------------ ------------
Total assets $23,935,582 $24,817,254
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 414,327 $ 677,625
Long-term debt 20,587,632 20,645,207
------------ ------------
Total liabilities 21,001,959 21,322,832
------------ ------------
Partners' equity
Limited Partner 3,003,272 3,521,357
General Partners (69,649) (26,935)
----------- -----------
Total Partners' equity 2,933,623 3,494,422
----------- -----------
Total liabilities and partners' equity $23,935,582 $24,817,254
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 547,752 $ 547,292
Expenses: ------------ ------------
Operating expenses 299,498 281,862
Interest expense 157,937 146,617
Depreciation and amortization 225,380 215,781
------------ ------------
Total expenses 682,815 644,260
------------ ------------
Net loss $ (135,063) $ (96,968)
============ ============
Other partners' share of net loss $ (1,351) $ (970)
============ ============
Partnerships' share of net loss $ (133,712) $ (95,998)
Suspended losses 0 0
------------ ------------
Equity in Losses of Project Partnerships $ (133,712) $ (95,998)
============ ============
<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:
1998 1997
SERIES 10 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,198,923 $ 1,028,221
Investment properties, net 15,579,141 16,079,503
Other assets 23,490 20,402
------------ ------------
Total assets $16,801,554 $17,128,126
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 261,742 $ 240,248
Long-term debt 13,487,607 13,535,883
------------ ------------
Total liabilities 13,749,349 13,776,131
------------ ------------
Partners' equity
Limited Partner 3,130,153 3,364,035
General Partners (77,948) (12,040)
----------- -----------
Total Partners' equity 3,052,205 3,351,995
----------- -----------
Total liabilities and partners' equity $16,801,554 $17,128,126
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 346,480 $ 345,176
Expenses: ------------ ------------
Operating expenses 200,476 199,620
Interest expense 75,173 60,860
Depreciation and amortization 127,541 122,857
------------ ------------
Total expenses 403,190 383,337
------------ ------------
Net loss $ (56,710) $ (38,161)
============ ============
Other partners' share of net loss $ (567) $ (382)
============ ============
Partnerships' share of net loss $ (56,143) $ (37,779)
Suspended losses 0 0
------------ ------------
Equity in Losses of Project Partnerships $ (56,143) $ (37,779)
============ ============
<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:
1998 1997
SERIES 11 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 966,994 $ 630,783
Investment properties, net 13,865,796 14,350,170
Other assets 12,130 28,421
------------ ------------
Total assets $14,844,920 $15,009,374
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 404,208 $ 194,137
Long-term debt 10,825,000 10,918,640
------------ ------------
Total liabilities 11,229,208 11,112,777
------------ ------------
Partners' equity
Limited Partner 3,543,933 3,759,019
General Partners 71,779 137,578
----------- -----------
Total Partners' equity 3,615,712 3,896,597
----------- -----------
Total liabilities and partners' equity $14,844,920 $15,009,374
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 343,746 $ 376,957
Expenses: ------------ ------------
Operating expenses 173,898 179,721
Interest expense 104,158 109,833
Depreciation and amortization 126,035 134,238
------------ ------------
Total expenses 404,091 423,792
------------ ------------
Net loss $ (60,345) $ (46,835)
============ ============
Other partners' share of net loss $ (603) $ (468)
============ ============
Partnerships' share of net loss $ (59,742) $ (46,367)
Suspended losses 0 0
------------ ------------
Equity in Losses of Project Partnerships $ (59,742) $ (46,367)
============ ============
<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:
1998 1997
TOTAL SERIES 7 - 11 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 8,530,473 $ 7,363,317
Investment properties, net 129,826,921 134,768,418
Other assets 238,755 400,521
------------ ------------
Total assets $138,596,149 $142,532,256
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 3,138,834 $ 3,474,006
Long-term debt 120,649,525 121,048,913
------------ ------------
Total liabilities 123,788,359 124,522,919
------------ ------------
Partners' equity
Limited Partner 14,990,224 17,949,523
General Partners (182,434) 59,814
----------- -----------
Total Partners' equity 14,807,790 18,009,337
----------- -----------
Total liabilities and partners' equity $138,596,149 $142,532,256
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 3,329,423 $ 3,406,113
Expenses: ------------ ------------
Operating expenses 1,917,190 1,962,677
Interest expense 904,955 892,853
Depreciation and amortization 1,275,876 1,260,259
------------ ------------
Total expenses 4,098,021 4,115,789
------------ ------------
Net loss $ (768,598) $ (709,676)
============ ============
Other partners' share of net loss $ (7,686) $ (7,097)
============ ============
Partnerships' share of net loss $ (760,912) $ (702,579)
Suspended losses 27,134 14,379
------------ ------------
Equity in Losses of Project Partnerships $ (733,778) $ (688,200)
============ ============
<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 three months ended
June 30, 1998 and June 30, 1997. The General and Administrative expenses -
General Partner and General and Administrative expenses - Other for the
three months ended June 30, 1998 are comparable to June 30, 1997. 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 three months ended June 30,
1998 and June 30, 1997. 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 June 30, 1998, the Series had $294,245 of short-term investments (Cash
and Cash Equivalents). It also had $459,617 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
$240,572 for the three months ended June 30, 1998. However, after
adjusting for Equity in Losses of Project Partnerships of $217,984 and the
changes in operating assets and liabilities, net cash used in operating
activities was $7,441. Cash provided by investing activities totaled
$15,580, 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 three months ended June 30,
1998 and June 30, 1997. At June 30, 1998, the Series had $410,251 of short-
term investments (Cash and Cash Equivalents). It also had $434,800 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
$286,785 for the three months ended June 30, 1998. However, after
adjusting for Equity in Losses of Project Partnerships of $266,197 and the
changes in operating assets and liabilities, net cash used in operating
activities was $6,788. Cash provided by investing activities totaled
$6,312, consisting primarily of cash distributions of $6,312 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 increased from $95,998 for the three months ended June 30,
1997 to $133,712 for the three months ended June 30, 1998. At June 30,
1998, the Series had $182,044 of short-term investments (Cash and Cash
Equivalents). It also had $291,185 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
$145,637 for the three months ended June 30, 1998. However, after
adjusting for Equity in Losses of Project Partnerships of $133,712 and the
changes in operating assets and liabilities, net cash used in operating
activities was $4,821. Cash provided by investing activities totaled
$6,761, 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 increased from $37,779 for the three months ended June 30,
1997 to $56,143 for the three months ended June 30, 1998. At June 30,
1998, the Series had $205,962 of short-term investments (Cash and Cash
Equivalents). It also had $233,224 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
$62,486 for the three months ended June 30, 1998. However, after adjusting
for Equity in Losses of Project Partnerships of $56,143 and the changes in
operating assets and liabilities, net cash used in operating activities was
$3,018. Cash provided by investing activities totaled $6,545, consisting
of cash distributions from the Project Partnerships. 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 $46,367 for the three months ended June 30,
1997 to $59,742 for the three months ended June 30, 1998. At June 30,
1998, the Series had $208,647 of short-term investments (Cash and Cash
Equivalents). It also had $248,968 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
$63,705 for the three months ended June 30, 1998. However, after adjusting
for Equity in Losses of Project Partnerships of $59,742 and the changes in
operating assets and liabilities, net cash used in operating activities was
$1,733. Cash provided by investing activities totaled $2,182, 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: August 21, 1998 By:/s/ Ronald M. Diner
Ronald M. Diner
President
Date: August 21, 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 JUNE 30, 1998.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> JUN-30-1998
<CASH> 1,301,149
<SECURITIES> 1,667,795
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,466,625
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 19,888,378
<CURRENT-LIABILITIES> 174,696
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 18,933,772
<TOTAL-LIABILITY-AND-EQUITY> 19,888,378
<SALES> 0
<TOTAL-REVENUES> 42,665
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 108,272
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (799,385)
<INCOME-TAX> 0
<INCOME-CONTINUING> (799,385)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (799,385)
<EPS-PRIMARY> (21.50)<F1>
<EPS-DILUTED> (21.50)<F1>
<FN>
<F1>EPS IS NET LOSS PER $1,000 LIMITED PARTNERSHIP UNIT.
</FN>
</TABLE>
