GTWY3
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, 1999
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: (727)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, 1999
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 14, 1999
Parts III and IV - Form S-11 Registration Statement
and all amendments and supplements thereto
File No. 33-44238
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,
1999 1999
------- -------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 305,451 $ 299,313
Investments in Securities 51,186 50,412
Receivable from Project Partnerships 0 0
------------ ------------
Total Current Assets $ 356,637 $ 349,725
Investments in Securities 389,356 382,611
Investments in Project Partnerships, Net 2,586,612 2,749,505
----------- -----------
Total Assets $ 3,332,605 $ 3,481,841
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 53,595 $ 52,109
----------- -----------
Total Current Liabilities 53,595 52,109
----------- -----------
Long-Term Liabilities:
Payable to General Partners 289,486 268,953
----------- -----------
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, 1999 and March 31,1999) 3,050,907 3,220,449
General Partners (61,383) (59,670)
----------- -----------
Total Partners' Equity $ 2,989,524 $ 3,160,779
----------- -----------
Total Liabilities and Partners' Equity $ 3,332,605 $ 3,481,841
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 8 JUNE 30, MARCH 31,
1999 1999
------- -------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 422,143 $ 411,602
Investments in Securities 46,407 45,734
Receivable from Project Partnerships 0 0
------------ ------------
Total Current Assets $ 468,550 $ 457,336
Investments in Securities 371,176 365,098
Investments in Project Partnerships, Net 2,390,492 2,612,574
----------- -----------
Total Assets $ 3,230,218 $ 3,435,008
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 44,004 $ 42,668
----------- -----------
Total Current Liabilities 44,004 42,668
----------- -----------
Long-Term Liabilities:
Payable to General Partners 338,098 316,373
----------- -----------
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, 1999 and March 31,1999) 2,907,261 3,132,833
General Partners (59,145) (56,866)
----------- -----------
Total Partners' Equity $ 2,848,116 $ 3,075,967
----------- -----------
Total Liabilities and Partners' Equity $ 3,230,218 $ 3,435,008
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 9 JUNE 30, MARCH 31,
1999 1999
------- -------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 199,673 $ 195,618
Investments in Securities 30,057 29,663
Receivable from Project Partnerships 0 0
------------ ------------
Total Current Assets $ 229,730 $ 225,281
Investments in Securities 248,930 245,245
Investments in Project Partnerships, Net 2,677,564 2,818,653
----------- -----------
Total Assets $ 3,156,224 $ 3,289,179
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 25,362 $ 24,561
----------- -----------
Total Current Liabilities 25,362 24,561
----------- -----------
Long-Term Liabilities:
Payable to General Partners 194,708 183,028
----------- -----------
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, 1999 and March 31,1999) 2,961,629 3,105,611
General Partners (25,475) (24,021)
----------- -----------
Total Partners' Equity $ 2,936,154 $ 3,081,590
----------- -----------
Total Liabilities and Partners' Equity $ 3,156,224 $ 3,289,179
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 10 JUNE 30, MARCH 31,
1999 1999
------- -------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 220,065 $ 216,566
Investments in Securities 23,205 22,855
Receivable from Project Partnerships 750 0
------------ ------------
Total Current Assets $ 244,020 $ 239,421
Investments in Securities 201,461 198,073
Investments in Project Partnerships, Net 3,031,616 3,086,492
----------- -----------
Total Assets $ 3,477,097 $ 3,523,986
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 28,689 $ 28,101
----------- -----------
Total Current Liabilities 28,689 28,101
----------- -----------
Long-Term Liabilities:
Payable to General Partners 59,580 51,557
----------- -----------
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, 1999 and March 31,1999) 3,399,120 3,454,065
General Partners (10,292) (9,737)
----------- -----------
Total Partners' Equity $ 3,388,828 $ 3,444,328
----------- -----------
Total Liabilities and Partners' Equity $ 3,477,097 $ 3,523,986
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
SERIES 11 JUNE 30, MARCH 31,
1999 1999
------- -------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 223,150 $ 223,024
Investments in Securities 23,096 22,713
Receivable from Project Partnerships 0 0
------------ ------------
Total Current Assets $ 246,246 $ 245,737
Investments in Securities 220,646 216,679
Investments in Project Partnerships, Net 3,660,590 3,701,295
----------- -----------
Total Assets $ 4,127,482 $ 4,163,711
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 28,283 $ 27,805
----------- -----------
Total Current Liabilities 28,283 27,805
----------- -----------
Long-Term Liabilities:
Payable to General Partners 27,101 20,638
----------- -----------
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, 1999 and March 31,1999) 4,077,368 4,120,106
General Partners (5,270) (4,838)
----------- -----------
Total Partners' Equity $ 4,072,098 $ 4,115,268
----------- -----------
Total Liabilities and Partners' Equity $ 4,127,482 $ 4,163,711
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
TOTAL SERIES 7 - 11 JUNE 30, MARCH 31,
1999 1999
------- -------
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents $ 1,370,482 $ 1,346,123
Investments in Securities 173,951 171,377
Receivable from Project Partnerships 750 0
------------ ------------
Total Current Assets $ 1,545,183 $ 1,517,500
Investments in Securities 1,431,569 1,407,706
Investments in Project Partnerships, Net 14,346,874 14,968,519
----------- -----------
Total Assets $17,323,626 $17,893,725
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 179,933 $ 175,244
----------- -----------
Total Current Liabilities 179,933 175,244
----------- -----------
Long-Term Liabilities:
Payable to General Partners 908,973 840,549
----------- -----------
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, 1999 and March 31,1999) 16,396,284 17,033,064
General Partners (161,564) (155,132)
----------- -----------
Total Partners' Equity $16,234,720 $16,877,932
----------- -----------
Total Liabilities and Partners' Equity $17,323,626 $17,893,725
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 7 1999 1998
---- ----
Revenues:
Interest Income $ 10,670 $ 11,180
----------- -----------
Expenses:
Asset Management Fee-General Partner 22,052 22,108
General and Administrative:
General Partner 2,936 3,282
Other 3,038 2,827
Amortization 4,368 5,551
----------- -----------
Total Expenses 32,394 33,768
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (21,724) (22,588)
Equity in Losses of Project
Partnerships (149,531) (217,984)
---------- ----------
Net Loss $ (171,255) $ (240,572)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (169,542) $ (238,166)
General Partners (1,713) (2,406)
----------- -----------
$ (171,255) $ (240,572)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (16.31) $ (22.91)
============ ============
Number of Limited Partnership Units
Outstanding 10,395 10,395
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 8 1999 1998
---- ----
Revenues:
Interest Income $ 11,075 $ 11,888
----------- -----------
Expenses:
Asset Management Fee-General Partner 22,983 23,047
General and Administrative:
General Partner 3,237 3,618
Other 3,369 3,319
Amortization 3,260 2,492
----------- -----------
Total Expenses 32,849 32,476
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (21,774) (20,588)
Equity in Losses of Project
Partnerships (206,077) (266,197)
---------- ----------
Net Loss $ (227,851) $ (286,785)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (225,572) $ (283,917)
General Partners (2,279) (2,868)
----------- -----------
$ (227,851) $ (286,785)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (22.60) $ (28.45)
============ ============
Number of Limited Partnership Units
Outstanding 9,980 9,980
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 9 1999 1998
---- ----
Revenues:
Interest Income $ 6,140 $ 6,388
----------- -----------
Expenses:
Asset Management Fee-General Partner 12,615 12,648
General and Administrative:
General Partner 1,807 2,020
Other 1,911 1,902
Amortization 1,743 1,743
----------- -----------
Total Expenses 18,076 18,313
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (11,936) (11,925)
Equity in Losses of Project
Partnerships (133,500) (133,712)
---------- ----------
Net Loss $ (145,436) $ (145,637)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (143,982) $ (144,181)
General Partners (1,454) (1,456)
----------- -----------
$ (145,436) $ (145,637)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (23.02) $ (23.05)
============ ============
Number of Limited Partnership Units
Outstanding 6,254 6,254
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 10 1999 1998
---- ----
Revenues:
Interest Income $ 6,009 $ 6,295
----------- -----------
Expenses:
Asset Management Fee-General Partner 8,607 8,525
General and Administrative:
General Partner 1,129 1,262
Other 1,388 1,445
Amortization 1,406 1,406
----------- -----------
Total Expenses 12,530 12,638
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (6,521) (6,343)
Equity in Losses of Project
Partnerships (48,979) (56,143)
---------- ----------
Net Loss $ (55,500) $ (62,486)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (54,945) $ (61,861)
General Partners (555) (625)
----------- -----------
$ (55,500) $ (62,486)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (10.90) $ (12.27)
============ ============
Number of Limited Partnership Units
Outstanding 5,043 5,043
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 11 1999 1998
---- ----
Revenues:
Interest Income $ 6,666 $ 6,914
----------- -----------
Expenses:
Asset Management Fee-General Partner 6,930 6,820
General and Administrative:
General Partner 903 1,010
Other 1,300 1,173
Amortization 2,074 2,074
----------- -----------
Total Expenses 11,207 11,077
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (4,541) (4,163)
Equity in Losses of Project
Partnerships (38,629) (59,742)
---------- ----------
Net Loss $ (43,170) $ (63,905)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (42,738) $ (63,266)
General Partners (432) (639)
----------- -----------
$ (43,170) $ (63,905)
=========== ===========
Net Loss Per Number of Limited
Partnership Units $ (8.34) $ (12.34)
============ ============
Number of Limited Partnership Units
Outstanding 5,127 5,127
============ ============
See accompanying notes to financial statements.
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 1999 1998
---- ----
Revenues:
Interest Income $ 40,560 $ 42,665
----------- -----------
Expenses:
Asset Management Fee-General Partner 73,187 73,148
General and Administrative:
General Partner 10,012 11,192
Other 11,006 10,666
Amortization 12,851 13,266
----------- -----------
Total Expenses 107,056 108,272
----------- -----------
Loss Before Equity in Losses
of Project Partnerships (66,496) (65,607)
Equity in Losses of Project
Partnerships (576,716) (733,778)
---------- ----------
Net Loss $ (643,212) $ (799,385)
=========== ===========
Allocation of Net Loss:
Limited Partners $ (636,780) $ (791,391)
General Partners (6,432) (7,994)
----------- -----------
$ (643,212) $ (799,385)
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998:
Limited General
SERIES 7 Partners Partners Total
--------- -------- -----
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
============ ============ ============
Balance at March 31, 1999 $ 3,220,449 $ (59,670) $ 3,160,779
Net Loss (169,542) (1,713) (171,255)
----------- ----------- -----------
Balance at June 30, 1999 $ 3,050,907 $ (61,383) $ 2,989,524
============ ============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998:
Limited General
SERIES 8 Partners Partners Total
--------- -------- -----
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
============ ============ ============
Balance at March 31, 1999 $ 3,132,833 $ (56,866) $ 3,075,967
Net Loss (225,572) (2,279) (227,851)
----------- ----------- -----------
Balance at June 30, 1999 $ 2,907,261 $ (59,145) $ 2,848,116
============ ============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998:
Limited General
SERIES 9 Partners Partners Total
--------- -------- -----
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
============ ============ ============
Balance at March 31, 1999 $ 3,105,611 $ (24,021) $ 3,081,590
Net Loss (143,982) (1,454) (145,436)
----------- ----------- -----------
Balance at June 30, 1999 $ 2,961,629 $ (25,475) $ 2,936,154
============ ============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998:
Limited General
SERIES 10 Partners Partners Total
--------- -------- -----
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
============ ============ ============
Balance at March 31, 1999 $ 3,454,065 $ (9,737) $ 3,444,328
Net Loss (54,945) (555) (55,500)
----------- ----------- -----------
Balance at June 30, 1999 $ 3,399,120 $ (10,292) $ 3,388,828
============ ============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998:
Limited General
SERIES 11 Partners Partners Total
--------- -------- -----
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
============ ============ ============
Balance at March 31, 1999 $ 4,120,106 $ (4,838) $ 4,115,268
Net Loss (42,738) (432) (43,170)
----------- ----------- -----------
Balance at June 30, 1999 $ 4,077,368 $ (5,270) $ 4,072,098
============ ============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998:
Limited General
TOTAL SERIES 7 - 11 Partners Partners Total
--------- -------- -----
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
============ ============ ============
Balance at March 31, 19999 $17,033,064 $ (155,132) $16,877,932
Net Loss (636,780) (6,432) (643,212)
----------- ----------- -----------
Balance at June 30, 1999 $16,396,284 $ (161,564) $16,234,720
============ ============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 7 1999 1998
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (171,255) $ (240,572)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 4,368 5,551
Accreted Interest Income on Investments
in Securities (7,517) (7,722)
Equity in Losses of Project Partnerships 149,531 217,984
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 22,018 17,318
----------- -----------
Net Cash Used in Operating Activities (2,855) (7,441)
----------- -----------
Cash Flows from Investing Activities:
Increase in Receivable from Other Series 0 0
(Increase) Decrease in Receivable from
Project Partnerships 0 0
Distributions Received from Project
Partnerships 8,993 15,580
Increase (Decrease) in Payable:
Project Partnerships - Capital Contributions 0 0
Other Series 0 0
----------- -----------
Net Cash Provided by
Investing Activities 8,993 15,580
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents 6,138 8,139
Cash and Cash Equivalents at Beginning of
Year 299,313 286,106
----------- -----------
Cash and Cash Equivalents at End of Year $ 305,451 $ 294,245
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 8 1999 1998
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (227,851) $ (286,785)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 3,260 2,492
Accreted Interest Income on Investments
in Securities (6,751) (6,929)
Equity in Losses of Project Partnership 206,077 266,197
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 23,061 18,237
----------- -----------
Net Cash Used in Operating Activities (2,204) (6,788)
----------- -----------
Cash Flows from Investing Activities:
Increase in Receivable from Other Series 0 0
(Increase) Decrease in Receivable from
Project Partnerships 0 0
Distributions Received from Project
Partnerships 12,745 6,312
Increase (Decrease) in Payable:
Project Partnerships - Capital Contributions 0 0
Other Series 0 0
----------- -----------
Net Cash Provided by (Used in)
Investing Activities 12,745 6,312
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents 10,541 (476)
Cash and Cash Equivalents at Beginning of
Year 411,602 410,727
----------- -----------
Cash and Cash Equivalents at End of Year $ 422,143 $ 410,251
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 9 1999 1998
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (145,436) $ (145,637)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 1,743 1,743
Accreted Interest Income on Investments
in Securities (4,079) (4,201)
Equity in Losses of Project Partnerships 133,500 133,712
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 12,481 9,562
----------- -----------
Net Cash Used in Operating Activities (1,791) (4,821)
----------- -----------
Cash Flows from Investing Activities:
Increase in Receivable from Other Series (2,208) (2,208)
(Increase) Decrease in Receivable from
Project Partnerships 2,208 2,208
Distributions Received from Project
Partnerships 5,846 6,761
Increase (Decrease) in Payable -
Other Series 1,003 1,003
Project Partnerships - Capital
Contributions (1,003) (1,003)
----------- -----------
Net Cash Provided by
Investing Activities 5,846 6,761
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents 4,055 1,940
Cash and Cash Equivalents at Beginning of
Year 195,618 180,104
----------- -----------
Cash and Cash Equivalents at End of Year $ 199,673 $ 182,044
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 10 1999 1998
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (55,500) $ (62,486)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 1,406 1,406
Accreted Interest Income on Investments
in Securities (3,735) (3,834)
Equity in Losses of Project Partnerships 48,979 56,143
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 8,610 5,753
----------- -----------
Net Cash Used in Operating Activities (240) (3,018)
----------- -----------
Cash Flows from Investing Activities:
Increase in Receivable from Other Series (1,003) (1,003)
(Increase) Decrease in Receivable from
Project Partnerships 253 1,003
Distributions Received from Project
Partnerships 4,489 6,545
Increase (Decrease) in Payable -
Other Series 2,208 2,208
Project Partnerships - Capital
Contributions (2,208) (2,208)
----------- -----------
Net Cash Provided by (Used in)
Investing Activities 3,739 6,545
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents 3,499 3,527
Cash and Cash Equivalents at Beginning of
Year 216,566 202,435
----------- -----------
Cash and Cash Equivalents at End of Year $ 220,065 $ 205,962
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30,
(Unaudited)
SERIES 11 1999 1998
- -------- ---- ----
Cash Flows from Operating Activities:
Net Loss $ (43,170) $ (63,905)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 2,074 2,074
Accreted Interest Income on Investments
in Securities (4,347) (4,406)
Equity in Losses of Project Partnerships 38,629 59,742
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 6,940 4,762
----------- -----------
Net Cash Used in Operating Activities 126 (1,733)
----------- -----------
Cash Flows from Investing Activities:
Increase in Receivable from Other Series 0 0
(Increase) Decrease in Receivable from
Project Partnerships 0 0
Distributions Received from Project
Partnerships 0 2,182
Increase (Decrease) in Payable to Project
Partnerships - Capital Contributions 0 0
Other Series 0 0
----------- -----------
Net Cash Provided by (Used in)
Investing Activities 0 2,182
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents 126 449
Cash and Cash Equivalents at Beginning of
Year 223,024 208,198
----------- -----------
Cash and Cash Equivalents at End of Year $ 223,150 $ 208,647
=========== ===========
See accompanying notes to financial statements.
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 $ (643,212) $ (799,385)
Adjustments to Reconcile Net Loss to Net
Cash Provided by (Used in) Operating
Activities:
Amortization 12,851 13,266
Accreted Interest Income on Investments
in Securities (26,429) (27,092)
Equity in Losses of Project Partnerships 576,716 733,778
Changes in Operating Assets and
Liabilities:
Increase in Payable to General Partners 73,110 55,632
----------- -----------
Net Cash Used in Operating Activities (6,964) (23,801)
----------- -----------
Cash Flows from Investing Activities:
Increase in Receivable from Other Series (3,211) (3,211)
(Increase) Decrease in Receivable from
Project Partnerships 2,461 3,211
Distributions Received from Project
Partnerships 32,073 37,380
Increase (Decrease) in Payable -
Other Series 3,211 3,211
Project Partnerships - Capital
Contributions (3,211) (3,211)
----------- -----------
Net Cash Provided by (Used in)
Investing Activities 31,323 37,380
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents 24,359 13,579
Cash and Cash Equivalents at Beginning of
Year 1,346,123 1,287,570
----------- -----------
Cash and Cash Equivalents at End of Year $ 1,370,482 $ 1,301,149
=========== ===========
See accompanying notes to financial statements.
<PAGE>
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
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, 1999, 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, because management believes that Gateway does not
have a
majority control of the major operating and financial policies of the
Project Partnerships in which it invests, 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, 1999. 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, 1999 Balance Sheet includes Investment in Securities
consisting of U.S. Treasury Security Strips which represents their cost,
plus accreted interest income of $165,198 for Series 7, $141,409 for Series
8, $78,922 for Series 9, $67,496 for Series 10 and $75,419 for Series 11.
Gross Unrealized
Estimated Market Cost Plus Gains and
Value Accreted Interest (Losses)
----------------- ----------------- ----------------
Series 7 $ 465,939 $ 440,542 $ 25,397
Series 8 434,239 417,583 16,656
Series 9 281,515 278,987 2,528
Series 10 235,254 224,666 10,588
Series 11 263,180 243,742 19,438
As of June 30, 1999, the cost and accreted interest of debt securities by
contractual maturities is as follows:
Series 7 Series 8 Series 9
-------- -------- --------
Due with 1 year $ 51,186 $ 46,407 $ 30,057
After 1 year through 5 years 201,614 189,147 115,321
After 5 years through 10 years 187,742 182,029 133,609
Over 10 years 0 0 0
---------- ---------- ----------
Total Amount Carried on
Balance Sheet $ 440,542 $ 417,583 $ 278,987
========== ========== ==========
Series 10 Series 11 Total
-------- -------- --------
Due with 1 year $ 23,205 $ 23,096 $ 173,951
After 1 year through 5 years 86,832 93,000 685,914
After 5 years through 10 years 95,718 107,920 707,018
Over 10 years 18,911 19,726 38,637
---------- ---------- ----------
Total Amount Carried on
Balance Sheet $ 224,666 $ 243,742 $1,605,520
========== ========== ==========
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 1999 and 1998 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.
1999 1998
----- -----
Series 7 $ 22,052 $ 22,108
Series 8 22,983 23,047
Series 9 12,615 12,648
Series 10 8,607 8,525
Series 11 6,930 6,820
-------- --------
Total $ 73,187 $ 73,148
======== ========
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 $ 3,153 $ 3,282
Series 8 4,324 3,618
Series 9 2,061 2,020
Series 10 2,274 1,262
Series 11 2,319 1,010
-------- --------
Total $ 14,131 $ 11,192
======== ========
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:
As of June 30, 1999, the Partnership had acquired a 99% interest in the
profits, losses and tax credits as a limited partner in 39 Project
Partnerships which own and operate government assisted multi-family housing
complexes. Cash flows from operations are allocated according to each
Partnership agreement. Upon dissolution proceeds will be distributed
according to each Partnership agreement.
The following is a summary of Investments in Project Partnerships as of:
SERIES 7 JUNE 30, MARCH 31,
1999 1999
-------------- -----------
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) (5,651,178) (5,501,647)
Cumulative distributions received from
Project Partnerships (140,684) (131,691)
----------- -----------
Investment in Project Partnerships before
adjustment 1,940,227 2,098,751
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 793,335 793,335
Accumulated amortization of acquisition
fees and expenses (146,950) (142,581)
------------ ------------
Investments in Project Partnerships $ 2,586,612 $ 2,749,505
============ ============
(1) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $329,095 for the period ended June 30, 1999 and cumulative suspended
losses of $253,692 for the year ended March 31, 1999 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1999, the Partnership had acquired a 99% interest in the
profits, losses and tax credits as a limited partner in 43 Project
Partnerships which own and operate government assisted multi-family housing
complexes. Cash flows from operations are allocated according to each
Partnership agreement. Upon dissolution proceeds will be distributed
according to each Partnership agreement.
The following is a summary of Investments in Project Partnerships as of:
SERIES 8 JUNE 30, MARCH 31,
1999 1999
-------------- -----------
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) (5,538,272) (5,332,195)
Cumulative distributions received from
Project Partnerships (116,950) (104,205)
----------- -----------
Investment in Project Partnerships before
adjustment 1,930,883 2,149,705
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 549,773 549,773
Accumulated amortization of acquisition
fees and expenses (90,164) (86,904)
------------ ------------
Investments in Project Partnerships $ 2,390,492 $ 2,612,574
============ ============
(1) In accordance with the Partnership's accounting policy to not carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $296,585 for the period ended June 30, 1999 and cumulative suspended
losses of $248,712 for the year ended March 31, 1999 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1999, the Partnership had acquired a 99% interest in the
profits, losses and tax credits as a limited partner in 24 Project
Partnerships which own and operate government assisted multi-family housing
complexes. Cash flows from operations are allocated according to each
Partnership agreement. Upon dissolution proceeds will be distributed
according to each Partnership agreement.
The following is a summary of Investments in Project Partnerships as of:
SERIES 9 JUNE 30, MARCH 31,
1999 1999
-------------- -----------
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) (2,362,675) (2,229,175)
Cumulative distributions received from
Project Partnerships (79,285) (73,439)
----------- ----------
Investment in Project Partnerships before
adjustment 2,472,156 2,611,502
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 244,086 244,087
Accumulated amortization of acquisition
fees and expenses (38,678) (36,936)
------------ ------------
Investments in Project Partnerships $ 2,677,564 $ 2,818,653
============ ============
(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, 1999 and cumulative suspended losses of
$0 for the year ended March 31, 1999 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1999, the Partnership had acquired a 99% interest in the
profits, losses and tax credits as a limited partner in 15 Project
Partnerships which own and operate government assisted multi-family housing
complexes. Cash flows from operations are allocated according to each
Partnership agreement. Upon dissolution proceeds will be distributed
according to each Partnership agreement.
The following is a summary of Investments in Project Partnerships as of:
SERIES 10 JUNE 30, MARCH 31,
1999 1999
-------------- -----------
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) (961,557) (912,578)
Cumulative distributions received from
Project Partnerships (87,815) (83,326)
----------- ----------
Investment in Project Partnerships before
adjustment 2,865,300 2,918,768
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 196,738 196,738
Accumulated amortization of acquisition
fees and expenses (30,422) (29,014)
------------- ------------
Investments in Project Partnerships $ 3,031,616 $ 3,086,492
============= ============
(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, 1999 and cumulative suspended losses of
$0 for the year ended March 31, 1999 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
As of June 30, 1999, the Partnership had acquired a 99% interest in the
profits, losses and tax credits as a limited partner in 12 Project
Partnerships which own and operate government assisted multi-family housing
complexes. Cash flows from operations are allocated according to each
Partnership agreement. Upon dissolution proceeds will be distributed
according to each Partnership agreement.
The following is a summary of Investments in Project Partnerships as of:
SERIES 11 JUNE 30, MARCH 31,
1999 1999
-------------- -----------
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) (657,474) (618,845)
Cumulative distributions received from
Project Partnerships (63,483) (63,483)
----------- -----------
Investment in Project Partnerships before
adjustment 3,407,085 3,445,714
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 290,335 290,335
Accumulated amortization of acquisition
fees and expenses (36,830) (34,754)
------------ -----------
Investments in Project Partnerships $ 3,660,590 $ 3,701,295
============= =============
(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, 1999 and cumulative suspended losses of $0
for the year ended March 31, 1999 are not included.
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,
1999 1999
-------------- -----------
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) (15,171,156) (14,594,440)
Cumulative distributions received from
Project Partnerships (488,217) (456,144)
------------ -----------
Investment in Project Partnerships before
adjustment 12,615,651 13,224,440
Excess of investment cost over the
underlying assets acquired:
Acquisition fees and expenses 2,074,267 2,074,268
Accumulated amortization of acquisition
fees and expenses (343,044) (330,189)
------------ ------------
Investments in Project Partnerships $14,346,874 $14,968,519
============ =============
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:
1999 1998
SERIES 7 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,946,638 $ 2,673,659
Investment properties, net 36,185,284 37,570,324
Other assets 24,358 61,947
------------ ------------
Total assets $39,156,280 $40,305,930
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 877,536 $ 948,112
Long-term debt 36,724,911 36,850,924
------------ ------------
Total liabilities 37,602,447 37,799,036
------------ ------------
Partners' equity
Limited Partner 1,579,997 2,497,459
General Partners (26,164) 9,435
----------- -----------
Total Partners' equity 1,553,833 2,506,894
----------- -----------
Total liabilities and partners' equity $39,156,280 $40,305,930
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 1,134,117 $ 1,064,821
Expenses: ------------ ------------
Operating expenses 650,599 615,770
Interest expense 329,624 289,173
Depreciation and amortization 381,100 389,975
------------ ------------
Total expenses 1,361,323 1,294,918
------------ ------------
Net loss $ (227,206) $ (230,097)
============ ============
Other partners' share of net loss $ (2,272) $ (2,301)
============ ============
Partnerships' share of net loss $ (224,934) $ (227,796)
Suspended losses 75,403 9,812
------------ ------------
Equity in Losses of Project Partnerships $ (149,531) $ (217,984)
============ ============
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:
1999 1998
SERIES 8 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 2,586,755 $ 2,250,729
Investment properties, net 38,841,818 40,395,958
Other assets 44,825 61,476
------------ ------------
Total assets $41,473,398 $42,708,163
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 1,177,277 $ 1,110,445
Long-term debt 38,748,083 38,898,362
------------ ------------
Total liabilities 39,925,360 40,008,807
------------ ------------
Partners' equity
Limited Partner 1,687,033 2,815,407
General Partners (138,995) (116,051)
----------- -----------
Total Partners' equity 1,548,038 2,699,356
----------- -----------
Total liabilities and partners' equity $41,473,398 $42,708,163
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 1,053,058 $ 1,026,624
Expenses: ------------ ------------
Operating expenses 640,304 627,548
Interest expense 267,569 278,514
Depreciation and amortization 401,700 406,945
------------ ------------
Total expenses 1,309,573 1,313,007
------------ ------------
Net loss $ (256,515) $ (286,383)
============ ============
Other partners' share of net loss $ (2,565) $ (2,864)
============ ============
Partnerships' share of net loss $ (253,950) $ (283,519)
Suspended losses 47,873 17,322
------------ ------------
Equity in Losses of Project Partnerships $ (206,077) $ (266,197)
============ ============
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:
1999 1998
SERIES 9 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,653,121 $ 1,440,168
Investment properties, net 21,578,510 22,415,702
Other assets 5,434 79,712
------------ ------------
Total assets $23,237,065 $23,935,582
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 354,208 $ 414,327
Long-term debt 20,522,119 20,587,632
------------ ------------
Total liabilities 20,876,327 21,001,959
------------ ------------
Partners' equity
Limited Partner 2,467,825 3,003,272
General Partners (107,087) (69,649)
----------- -----------
Total Partners' equity 2,360,738 2,933,623
----------- -----------
Total liabilities and partners' equity $23,237,065 $23,935,582
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 554,665 $ 547,752
Expenses: ------------ ------------
Operating expenses 317,369 299,498
Interest expense 150,571 157,937
Depreciation and amortization 221,573 225,380
------------ ------------
Total expenses 689,513 682,815
------------ ------------
Net loss $ (134,848) $ (135,063)
============ ============
Other partners' share of net loss $ (1,348) $ (1,351)
============ ============
Partnerships' share of net loss $ (133,500) $ (133,712)
Suspended losses 0 0
------------ ------------
Equity in Losses of Project Partnerships $ (133,500) $ (133,712)
============ ============
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:
1999 1998
SERIES 10 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,328,224 $ 1,198,923
Investment properties, net 15,093,954 15,579,141
Other assets 7,179 23,490
------------ ------------
Total assets $16,429,357 $16,801,554
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 234,746 $ 261,742
Long-term debt 13,434,411 13,487,607
------------ ------------
Total liabilities 13,669,157 13,749,349
------------ ------------
Partners' equity
Limited Partner 2,880,006 3,130,153
General Partners (119,806) (77,948)
----------- -----------
Total Partners' equity 2,760,200 3,052,205
----------- -----------
Total liabilities and partners' equity $16,429,357 $16,801,554
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 391,315 $ 346,480
Expenses: ------------ ------------
Operating expenses 221,226 200,476
Interest expense 91,366 75,173
Depreciation and amortization 128,197 127,541
------------ ------------
Total expenses 440,789 403,190
------------ ------------
Net loss $ (49,474) $ (56,710)
============ ============
Other partners' share of net loss $ (495) $ (567)
============ ============
Partnerships' share of net loss $ (48,979) $ (56,143)
Suspended losses 0 0
------------ ------------
Equity in Losses of Project Partnerships $ (48,979) $ (56,143)
============ ============
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:
1999 1998
SERIES 11 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 1,093,783 $ 966,994
Investment properties, net 13,401,509 13,865,796
Other assets 7,113 12,130
------------ ------------
Total assets $14,502,405 $14,844,920
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 308,954 $ 404,208
Long-term debt 10,736,223 10,825,000
------------ ------------
Total liabilities 11,045,177 11,229,208
------------ ------------
Partners' equity
Limited Partner 3,416,236 3,543,933
General Partners 40,992 71,779
----------- -----------
Total Partners' equity 3,457,228 3,615,712
----------- -----------
Total liabilities and partners' equity $14,502,405 $14,844,920
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 384,790 $ 343,746
Expenses: ------------ ------------
Operating expenses 189,341 173,898
Interest expense 107,063 104,158
Depreciation and amortization 127,405 126,035
------------ ------------
Total expenses 423,809 404,091
------------ ------------
Net loss $ (39,019) $ (60,345)
============ ============
Other partners' share of net loss $ (390) $ (603)
============ ============
Partnerships' share of net loss $ (38,629) $ (59,742)
Suspended losses 0 0
------------ ------------
Equity in Losses of Project Partnerships $ (38,629) $ (59,742)
============ ============
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:
1999 1998
TOTAL SERIES 7 - 11 ---- ----
SUMMARIZED BALANCE SHEETS
Assets:
Current assets $ 9,608,521 $ 8,530,473
Investment properties, net 125,101,075 129,826,921
Other assets 88,909 238,755
------------ ------------
Total assets $134,798,505 $138,596,149
============ ============
Liabilities and Partners' Equity:
Current liabilities $ 2,952,721 $ 3,138,834
Long-term debt 120,165,747 120,649,525
------------ ------------
Total liabilities 123,118,468 123,788,359
------------ ------------
Partners' equity
Limited Partner 12,031,097 14,990,224
General Partners (351,060) (182,434)
----------- -----------
Total Partners' equity 11,680,037 14,807,790
----------- -----------
Total liabilities and partners' equity $134,798,505 $138,596,149
============ ============
SUMMARIZED STATEMENTS OF OPERATIONS
Rental and other income $ 3,517,945 $ 3,329,423
Expenses: ------------ ------------
Operating expenses 2,018,839 1,917,190
Interest expense 946,193 904,955
Depreciation and amortization 1,259,975 1,275,876
------------ ------------
Total expenses 4,225,007 4,098,021
------------ ------------
Net loss $ (707,062) $ (768,598)
============ ============
Other partners' share of net loss $ (7,071) $ (7,686)
============ ============
Partnerships' share of net loss $ (699,991) $ (760,912)
Suspended losses 123,276 27,134
------------ ------------
Equity in Losses of Project Partnerships $ (576,715) $ (733,778)
============ ============
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, 1999 and June 30, 1998. The General and Administrative expenses -
General Partner and General and Administrative expenses - Other for the
three months ended June 30, 1999 are comparable to June 30, 1998. 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 for the three months ended June 30, 1999 decreased
from $217,984 for the three months ended June 30, 1998 to $149,531 as a
result of not including losses of $75,403 in 1999 as compared to $9,812 in
1998, as these losses would reduce the investment in certain Project
Partnerships below zero. 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, 1999, the Series had $305,451 of short-term investments (Cash
and Cash Equivalents). It also had $440,542 in Zero Coupon Treasuries with
annual maturities providing $53,000 in fiscal year 2000 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
$171,255 for the three months ended June 30, 1999. However, after
adjusting for Equity in Losses of Project Partnerships of $149,531 and the
changes in operating assets and liabilities, net cash used in operating
activities $2,855 Cash provided by investing activities totaled $8,993
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 for the three months ended June 30, 1999 decreased
from $266,197 for the three months ended June 30, 1998 to $206,077 as a
result of not including losses of $47,873 in 1999 as compared to $17,322 in
1998, as these losses would reduce the investment in certain Project
Partnerships below zero. At June 30, 1999, the Series had $422,143 of
short-term investments (Cash and Cash Equivalents). It also had $417,583
in Zero Coupon Treasuries with annual maturities providing $48,000 in
fiscal year 2000 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
$227,851 for the three months ended June 30, 1999. However, after
adjusting for Equity in Losses of Project Partnerships of $206,077 and the
changes in operating assets and liabilities, net cash used in operating
activities was $2,204. Cash provided by investing activities totaled
$12,745, consisting primarily of cash distributions of $12,745 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 for the three months ended June 30, 1998 were comparable for
the three months ended June 30, 1999. At June 30, 1999, the Series had
$199,673 of short-term investments (Cash and Cash Equivalents). It also
had $278,987 in Zero Coupon Treasuries with annual maturities providing
$31,000 in fiscal year 2000 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
$145,436 for the three months ended June 30, 1999. However, after
adjusting for Equity in Losses of Project Partnerships of $133,500 and the
changes in operating assets and liabilities, net cash used in operating
activities was $1,791. Cash provided by investing activities totaled
$5,846, 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 for the three months ended June 30, 1998 were comparable for
the three months ended June 30, 1999. At June 30, 1999, the Series had
$220,065 of short-term investments (Cash and Cash Equivalents). It also
had $224,666 in Zero Coupon Treasuries with annual maturities providing
$24,000 in fiscal year 2000 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
$55,500 for the three months ended June 30, 1999. However, after adjusting
for Equity in Losses of Project Partnerships of $48,979 and the changes in
operating assets and liabilities, net cash used in operating activities was
$240. Cash provided by investing activities totaled $3,739, 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 decreased from $59,742 for the three months ended June 30,
1998 to $38,629 for the three months ended June 30, 1999. At June 30,
1999, the Series had $233,150 of short-term investments (Cash and Cash
Equivalents). It also had $243,742 in Zero Coupon Treasuries with annual
maturities providing $24,000 in fiscal year 2000 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
$43,170 for the three months ended June 30, 1999. However, after adjusting
for Equity in Losses of Project Partnerships of $38,629 and the changes in
operating assets and liabilities, net cash provided by operating activities
was $126. Cash provided by investing activities totaled $ 0. There were
no unusual events or trends to describe.
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 18, 1999 By:/s/ Ronald M. Diner
Ronald M. Diner
President
Date: August 18, 1999 By:/s/ Sandra L. Furey
Sandra L. Furey
Secretary and Treasurer
<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, 1999.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> JUN-30-1999
<CASH> 1,370,482
<SECURITIES> 1,569,520
<RECEIVABLES> 750
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,545,183
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 17,323,626
<CURRENT-LIABILITIES> 179,933
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 16,234,720
<TOTAL-LIABILITY-AND-EQUITY> 17,323,626
<SALES> 0
<TOTAL-REVENUES> 40,560
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 107,056
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (643,212)
<INCOME-TAX> 0
<INCOME-CONTINUING> (643,212)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (643,212)
<EPS-BASIC> (17.30)<F1>
<EPS-DILUTED> (17.30)<F1>
<FN>
<F1>EPS IS NET LOSS PER $1,000 LIMITED PARTNERSHIP UNIT.
</FN>
</TABLE>
