UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 ---
For the quarterly period ended December 30, 1999
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number: 0-24600
American Tax Credit Trust, a Delaware statutory business trust
Series I
(Exact name of Registrant as specified in its charter)
Delaware 06-6385350
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Richman American Credit Corp.
599 West Putnam Avenue, 3rd Floor
Greenwich, Connecticut 06830
- --------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 869-0900
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to filing requirements
for the past 90 days.
Yes X No .
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
Table of Contents Page
Balance Sheets.................................................................3
Statements of Operations.......................................................4
Statements of Cash Flows.......................................................5
Notes to Financial Statements..................................................7
2
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
December 30, March 30,
Notes 1999 1999
----- ------------ ------------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 997,687 $ 937,143
Restricted cash 3 126,080 410,767
Investments in bonds available-for-sale 2 924,894 998,384
Investment in local partnerships 3 9,530,347 10,353,629
Interest receivable 15,150 15,726
------------ ------------
$ 11,594,158 $ 12,715,649
============ ============
LIABILITIES AND OWNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses $ 19,400 $ 25,380
Payable to manager 543,002 473,920
Capital contributions payable 3 76,800 366,617
Interest payable 3 49,280 44,150
------------ ------------
688,482 910,067
------------ ------------
Commitments and contingencies 3
Owners' equity (deficit)
Manager (54,191) (45,900)
Beneficial owners (18,654 units of beneficial ownership interest 11,023,285
outstanding) 11,844,092
Accumulated other comprehensive income (loss), net 2 (63,418) 7,390
------------ ------------
10,905,676 11,805,582
------------ ------------
$ 11,594,158 $ 12,715,649
============ ============
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Nine Months Three Months Nine Months
Ended Ended Ended Ended
December 30, December 30, December 30, December 30,
Notes 1999 1999 1998 1998
<S> <C> <C> <C> <C>
REVENUE
Interest $ 29,599 $ 86,161 $ 33,359 $ 103,744
--------- --------- --------- ---------
TOTAL REVENUE 29,599 86,161 33,359 103,744
--------- --------- --------- ---------
EXPENSES
Management fee 48,036 144,082 49,642 145,762
Professional fees 5,936 18,114 6,816 19,891
Printing, postage and other 4,440 11,343 4,879 12,645
Amortization 2,500 10,000
--------- --------- --------- ---------
TOTAL EXPENSES 58,412 173,539 63,837 188,298
Loss from operations (28,813) (87,378) (30,478) (84,554)
--------- --------- --------- ---------
Equity in loss of investment in local
partnerships 3 (280,189) (741,720) (335,658) (781,175)
--------- --------- --------- ---------
NET LOSS (309,002) (829,098) (366,136) (865,729)
Other comprehensive income (loss) 2 (18,975) (70,808) (12,231) 20,340
COMPREHENSIVE LOSS $(327,977) $(899,906) $(378,367) $(845,389)
========= ========= ========= =========
NET LOSS ATTRIBUTABLE TO
Manager $ (3,090) $ (8,291) $ (3,661) $ (8,657)
Beneficial owners (305,912) (820,807) (362,475) (857,072)
--------- --------- --------- ---------
$(309,002) $(829,098) $(366,136) $(865,729)
========= ========= ========= =========
NET LOSS per unit of beneficial
ownership interest (18,654 units of
beneficial ownership interest) $ (16.40) $ (44.00) $ (19.44) $ (45.95)
========= ========= ========= =========
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED DECEMBER 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Interest received $ 94,549 $ 112,204
Cash paid for
management fee (75,000) (75,000)
professional fees (23,594) (24,731)
printing, postage and other expenses (11,843) (11,145)
-------- --------
Net cash provided by (used in) operating activities (15,888) 1,328
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash distributions from local partnerships l62,385 99,497
Transfer from restricted cash 284,687 301,230
Investment in local partnerships (270,640) (306,433)
-------- --------
Net cash provided by investing activities 76,432 94,294
-------- --------
Net increase in cash and cash equivalents 60,544 95,622
Cash and cash equivalents at beginning of period 937,143 837,174
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 997,687 $ 932,796
========= =========
SIGNIFICANT NON-CASH INVESTING ACTIVITIES
Unrealized gain (loss) on investments in bonds available-for-sale, net $ (70,808) $ 20,340
========= =========
Reduction in capital contributions payable $ (19,177)
=========
</TABLE>
================================================================================
See reconciliation of net loss to net cash provided by (used in) operating
activities on page 6.
See Notes to Financial Statements.
5
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
STATEMENTS OF CASH FLOWS - (Continued)
NINE MONTHS ENDED DECEMBER 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
RECONCILIATION OF NET LOSS TO NET CASH PROVIDED BY
(USED IN) OPERATING ACTIVITIES
Net loss $(829,098) $(865,729)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities
Equity in loss of investment in local partnerships 741,720 781,175
Amortization expense 10,000
Amortization of net premium on investments in bonds 2,682 2,681
Decrease in interest receivable 576 576
Decrease in accounts payable and accrued expenses (5,980) (3,340)
Increase in payable to manager 69,082 70,762
Increase in interest payable 5,130 5,203
--------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ (15,888) $ 1,328
========= =========
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 1999
(UNAUDITED)
1. Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information. They do not include all information and footnotes
required by generally accepted accounting principles for complete financial
statements. The results of operations are impacted significantly by the
combined results of operations of the Local Partnerships, which are
provided by the Local Partnerships on an unaudited basis during interim
periods. Accordingly, the accompanying financial statements are dependent
on such unaudited information. In the opinion of the Manager, the financial
statements include all adjustments necessary to present fairly the
financial position as of December 30, 1999 and the results of operations
and cash flows for the interim periods presented. All adjustments are of a
normal recurring nature. The results of operations for the three and nine
months ended December 30, 1999 are not necessarily indicative of the
results that may be expected for the entire year.
2. Investments in Bonds Available-For-Sale
As of December 30, 1999, certain information concerning investments in
bonds available-for-sale is as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Estimated
Description and maturity cost gains losses fair value
--------- ------- --------- ---------
<S> <C> <C> <C> <C>
Corporate debt securities
After one year through five years $ 99,029 $ -- $ (1,065) $ 97,964
After five years through ten years 687,142 -- (40,795) 646,347
After ten years 202,141 -- (21,558) 180,583
--------- ------- --------- ---------
$ 988,312 $ -- $ (63,418) $ 924,894
========= ======= ========= =========
</TABLE>
7
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS - (Continued)
DECEMBER 30, 1999
(UNAUDITED)
3. Investment in Local Partnerships
The Trust owns a 98.9%-99% limited partnership interest in ten Local
Partnerships and has committed to make capital contribution payments in the
aggregate amount of $14,741,864, of which the Trust has paid $14,665,064
and $76,800 is outstanding as of December 30, 1999. Restricted cash in the
accompanying balance sheet as of December 30, 1999 represents such
outstanding capital contribution along with accrued interest of $49,280 on
an outstanding capital contribution. The outstanding capital contribution
is payable upon a certain Local Partnership's satisfaction of specified
conditions related to operations. As of September 30, 1999, the Local
Partnerships have outstanding mortgage loans payable totaling approximately
$22,464,000 and accrued interest payable on such loans totaling
approximately $1,165,000, which are secured by security interests and liens
common to mortgage loans on the Local Partnerships' real property and other
assets.
For the nine months ended December 30, 1999, the investment in local
partnerships activity consists of the following:
<TABLE>
<CAPTION>
<S> <C>
Investment in local partnerships as of March 30, 1999 $ 10,353,629
Reduction in capital contributions payable (19,177)
Equity in loss of investment in local partnerships (741,720)
Cash distributions received from Local Partnerships (62,385)
--------------
Investment in local partnerships as of December 30, 1999 $ 9,530,347
==============
</TABLE>
The combined unaudited balance sheets of the Local Partnerships as of
September 30, 1999 and December 31, 1998 and the combined unaudited
statements of operations of the Local Partnerships for the three and nine
month periods ended September 30, 1999 and 1998 are reflected on pages 9
and 10, respectively.
8
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS - (Continued)
DECEMBER 30, 1999
(UNAUDITED)
3. Investment in Local Partnerships (continued)
The combined balance sheets of the Local Partnerships as of
September 30, 1999 and December 31, 1998 are as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 325,587 $ 487,409
Rents receivable 210,283 35,870
Capital contributions receivable 76,800 366,617
Escrow deposits and reserves 1,599,086 1,538,075
Land 1,267,153 1,267,153
Buildings and improvements (net of accumulated depreciation of $6,552,661 and
$5,525,125) 30,449,897 31,464,189
Intangible assets (net of accumulated amortization of $162,723
and $140,093) 330,917 353,547
Other 260,639 257,139
------------ ------------
$ 34,520,362 $ 35,769,999
============ ============
LIABILITIES AND PARTNERS' EQUITY
Liabilities
Accounts payable and accrued expenses $ 388,976 $ 311,095
Due to related parties 662,989 1,078,506
Mortgage loans 22,464,446 22,720,227
Notes payable 100,000 100,000
Accrued interest 1,164,651 979,948
Other 140,692 147,844
------------ ------------
24,921,754 25,337,620
------------ ------------
Partners' equity
American Tax Credit Trust, Series I
Capital contributions, net of distributions (includes receivable of
$76,800 and $366,617) 14,450,393 14,534,206
------------ ------------
Cumulative loss (4,919,297) (4,177,577)
9,531,096 10,356,629
General partners and other limited partners
Capital contributions, net of distributions 341,104 341,718
Cumulative loss (273,592) (265,968)
------------ ------------
67,512 75,750
------------ ------------
9,598,608 10,432,379
------------ ------------
$ 34,520,362 $ 35,769,999
============ ============
</TABLE>
9
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS - (Continued)
DECEMBER 30, 1999
(UNAUDITED)
3. Investment in Local Partnerships (continued)
The combined statements of operations of the Local Partnerships for the
three and nine month periods ended September 30, 1999 and 1998 are as
follows:
<TABLE>
<CAPTION>
Three Months Nine Months Three Months Nine Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
1999 1999 1998 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUE
Rental $ 936,279 $ 2,845,810 $ 932,791 $ 2,797,688
Interest and other 36,488 106,174 29,410 95,624
----------- ----------- ----------- -----------
TOTAL REVENUE 972,767 2,951,984 962,201 2,893,312
----------- ----------- ----------- -----------
EXPENSES
Administrative 171,077 511,092 166,497 494,452
Utilities 109,443 367,520 94,094 324,543
Operating, maintenance and other 262,447 688,600 303,442 683,017
Taxes and insurance 125,811 372,544 118,401 352,870
Financial (including amortization of $7,182, 245,923 734,036
$22,630, $8,839 and $26,518) 270,671 783,493
Depreciation 341,105 1,027,536 348,173 1,044,113
----------- ----------- ----------- -----------
TOTAL EXPENSES 1,255,806 3,701,328 1,301,278 3,682,488
----------- ----------- ----------- -----------
NET LOSS $ (283,039) $ (749,344) $ (339,077) $ (789,176)
=========== =========== =========== ===========
NET LOSS ATTRIBUTABLE TO
American Tax Credit Trust, Series I $ (280,189) $ (741,720) $ (335,658) $ (781,175)
General partners and other limited
partners (2,850) (7,624) (3,419) (8,001)
----------- ----------- ----------- -----------
$ (283,039) $ (749,344) $ (339,077) $ (789,176)
=========== =========== =========== ===========
</TABLE>
The combined results of operations of the Local Partnerships for the three
and nine month periods ended September 30, 1999 are not necessarily
indicative of the results that may be expected for an entire operating
period.
4. Additional Information
Additional information, including the audited March 30, 1999 Financial
Statements and the Organization, Purpose and Summary of Significant
Accounting Policies, is included in the Trust's Annual Report on Form 10-K
for the fiscal year ended March 30, 1999 on file with the Securities and
Exchange Commission.
10
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Material Changes in Financial Condition
As of December 30, 1999, American Tax Credit Trust (the "Registrant") has not
experienced a significant change in financial condition as compared to March 30,
1999. Principal changes in assets are comprised of periodic transactions and
adjustments and anticipated equity in loss from operations of the local
partnerships (the "Local Partnerships") which own low-income multifamily
residential complexes (the "Properties") which qualify for the low-income tax
credit in accordance with Section 42 of the Internal Revenue Code (the
"Low-income Tax Credit"). During the nine months ended December 30, 1999,
Registrant received cash from interest revenue and distributions from Local
Partnerships and utilized cash for operating expenses and investments in Local
Partnerships. Cash and cash equivalents and investments in bonds
available-for-sale decreased, in the aggregate, by approximately $13,000 during
the nine months ended December 30, 1999 (which includes a net unrealized loss on
investments in bonds of approximately $71,000 and the amortization of net
premium on investments in bonds of approximately $3,000), and restricted cash
decreased by approximately $285,000 primarily as a result of a capital
contribution paid to a Local Partnership. Notwithstanding circumstances that may
arise in connection with the Properties, Registrant does not expect to realize
significant gains or losses on its investments in bonds, if any. During the nine
months ended December 30, 1999, the investment in local partnerships decreased
as a result of Registrant's equity in the Local Partnerships' net loss for the
nine months ended September 30, 1999 of $741,720, a downward adjustment to a
capital contribution obligation of $19,177 and cash distributions received from
Local Partnerships of $62,385. Payable to manager in the accompanying balance
sheet as of December 30, 1999 represents deferred management fees.
Results of Operations
Registrant's operating results are dependent upon the operating results of the
Local Partnerships and are significantly impacted by the Local Partnerships'
policies. In addition, the operating results herein are not necessarily the same
for tax reporting. Registrant accounts for its investment in local partnerships
in accordance with the equity method of accounting. Accordingly, the investment
is carried at cost, which includes capital contributions payable, and is
adjusted for Registrant's share of each Local Partnership's results of
operations and by cash distributions received. Equity in loss of each investment
in Local Partnership allocated to Registrant is recognized to the extent of
Registrant's investment balance in each Local Partnership. Equity in loss in
excess of Registrant's investment balance in a Local Partnership is allocated to
other partners' capital in any such Local Partnership. As a result, the reported
equity in loss of investment in local partnerships is expected to decrease as
Registrant's investment balances in the respective Local Partnerships become
zero. As of December 30, 1999, no investment in any Local Partnership has
reached a zero balance.
Registrant's operations for the three months ended December 30, 1999 and 1998
resulted in net losses of $309,002 and $366,136, respectively. The decrease in
net loss is primarily attributable to a decrease in equity in loss of investment
in local partnerships of approximately $55,000. Other comprehensive loss for the
three months ended December 30, 1999 and 1998 resulted from a net unrealized
loss on investments in bonds available-for-sale of $18,975 and $12,231,
respectively.
The Local Partnerships' net loss of approximately $283,000 for the three months
ended September 30, 1999 was attributable to rental and other revenue of
approximately $973,000, exceeded by operating and interest expense (including
interest on non-mandatory debt) of approximately $908,000 and approximately
$348,000 of depreciation and amortization expense. The Local Partnerships' net
loss of approximately $339,000 for the three months ended September 30, 1998 was
attributable to rental and other revenue of approximately $962,000, exceeded by
operating and interest expense (including interest on non-mandatory debt) of
approximately $944,000 and approximately $357,000 of depreciation and
amortization expense. The results of operations of the Local Partnerships for
the three months ended September 30, 1999 are not necessarily indicative of the
results that may be expected in future periods.
Registrant's operations for the nine months ended December 30, 1999 and 1998
resulted in net losses of $829,098 and $865,729, respectively. The decrease in
net loss is primarily attributable to a decrease in equity in loss of investment
in local
11
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
partnerships of approximately $39,000 and a decrease in amortization expense of
$10,000, partially offset by a decrease in interest revenue of approximately
$18,000. Other comprehensive income (loss) for the nine months ended December
30, 1999 and 1998 resulted from a net unrealized gain (loss) on investments in
bonds available-for-sale of ($70,808) and $20,340, respectively.
The Local Partnerships' net loss of approximately $749,000 for the nine months
ended September 30, 1999 was attributable to rental and other revenue of
approximately $2,952,000, exceeded by operating and interest expense (including
interest on non-mandatory debt) of approximately $2,651,000 and approximately
$1,050,000 of depreciation and amortization expense. The Local Partnerships' net
loss of approximately $789,000 for the nine months ended September 30, 1998 was
attributable to rental and other revenue of approximately $2,893,000, exceeded
by operating and interest expense (including interest on non-mandatory debt) of
approximately $2,611,000 and approximately $1,071,000 of depreciation and
amortization expense. The results of operations of the Local Partnerships for
the nine months ended September 30, 1999 are not necessarily indicative of the
results that may be expected in future periods.
Local Partnership Matters
Registrant's primary objective is to provide Low-income Tax Credits to
Beneficial Owners generally over a ten year period. The required holding period
of each Property, in order to avoid Low-income Tax Credit recapture, is fifteen
years from the year in which the Low-income Tax Credits commence on the last
building of the Property (the "Compliance Period"). In addition, certain of the
Local Partnerships have entered into agreements with the relevant state tax
credit agencies whereby the Local Partnerships must maintain the low-income
nature of the Properties for a period which exceeds the Compliance Period,
regardless of any sale of the Properties by the Local Partnerships after the
Compliance Period. The Properties must satisfy various requirements including
rent restrictions and tenant income limitations (the "Low-income Tax Credit
Requirements") in order to maintain eligibility for the recognition of the
Low-income Tax Credit at all times during the Compliance Period. Once a Local
Partnership has become eligible for the Low-income Tax Credit, it may lose such
eligibility and suffer an event of recapture if its Property fails to remain in
compliance with the Low-income Tax Credit Requirements. Through December 31,
1998, none of the Local Partnerships have suffered an event of recapture of
Low-income Tax Credits.
The Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States. Certain
of the Local Partnerships receive rental subsidy payments, including payments
under Section 8 of Title II of the Housing and Community Development Act of 1974
("Section 8"). The subsidy agreements expire at various times during and after
the Compliance Periods of the Local Partnerships. In October 1997, Congress
passed the Multifamily Assisted Housing and Reform and Affordability Act,
whereby the United States Department of Housing and Urban Development ("HUD")
was given the authority to renew certain project based Section 8 contracts
expiring during HUD's fiscal year 1998, where requested by an owner, for an
additional one year term generally at or below existing rent levels, subject to
certain guidelines. In October 1998, HUD issued a directive related to project
based Section 8 contracts expiring during HUD's fiscal year 1999 which defined
owners' notification responsibilities, advised owners of project based Section 8
properties of what their options are regarding the renewal of Section 8
contracts, provided guidance and procedures to owners, management agents,
contract administrators and HUD staff on renewing Section 8 contracts, provided
guidance on setting renewal rents and handling renewal rent increases and
provided the requirements and procedures for opting-out of a Section 8 project
based contract. In January 2000, HUD issued a new notice that provides updated
guidance for those project based Section 8 contracts expiring during HUD's
fiscal year 2000. Registrant cannot reasonably predict legislative initiatives
and governmental budget negotiations, the outcome of which could result in a
reduction in funds available for the various federal and state administered
housing programs including the Section 8 program. Such changes could adversely
affect the future net operating income and debt structure of any or all Local
Partnerships currently receiving such subsidy or similar subsidies. Three Local
Partnerships' Section 8 contracts are currently subject to annual year-to-year
renewals.
The Local Partnerships have various financing structures which include (i)
required debt service payments ("Mandatory Debt Service") and (ii) debt service
payments which are payable only from available cash flow subject to the terms
and conditions of the notes, which may be subject to specific laws, regulations
and agreements with appropriate federal and state agencies ("Non-Mandatory Debt
Service or Interest"). In the event rents are not sufficient to cover operating
expenses, Mandatory Debt
12
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
Service requirements and other charges, certain general partners of the Local
Partnerships (the "Local General Partners") are obligated to provide advances to
cover deficits for a certain period of time up to certain amounts (the "Deficit
Guarantee"). A Local General Partner's funding of such Deficit Guarantee is
dependent on its liquidity or ability to borrow the required funds. During the
nine months ended September 30, 1999, revenue from operations of the Local
Partnerships have generally been sufficient to cover operating expenses and
Mandatory Debt Service. All of the Local Partnerships are effectively operating
above or near break even levels, although certain Local Partnerships' operating
information reflects operating deficits that do not represent cash deficits due
to their mortgage and financing structure and the required deferral of property
management fees.
Year 2000 Compliance
The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a two
digit year is commonly referred to as the year 2000 compliance ("Y2K") issue. As
the year 2000 unfolds, certain systems may be unable to accurately process
certain data-based information. Many businesses may need to upgrade existing
systems or purchase new ones to correct the Y2K issue. Registrant has performed
an assessment of its computer software and hardware and believes it has made the
necessary upgrades in an effort to ensure compliance. However, there can be no
assurance that the systems of other entities on which Registrant relies,
including the Local Partnerships which report to Registrant on a periodic basis
for the purpose of Registrant's reporting to its investors, will be sufficiently
converted. To date, Registrant is not aware of any problems caused by Y2K. The
total cost associated with Y2K implementation is not expected to materially
impact Registrant's financial position or results of operations in any given
year. However, there can be no assurance that a failure to convert by Registrant
or another entity would not have a material adverse impact on Registrant.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
Registrant has invested a significant portion of its working capital reserves in
corporate bonds. The market value of such investments is subject to fluctuation
based upon changes in interest rates relative to each investment's maturity
date. Since Registrant's investments in bonds have various maturity dates
through 2016, the value of such investments may be adversely impacted in an
environment of rising interest rates in the event Registrant decides to
liquidate any such investment prior to its maturity. Although Registrant may
utilize reserves to assist an underperforming Property, it otherwise intends to
hold such investments to their respective maturities. Therefore, Registrant does
not anticipate any material adverse impact in connection with such investments.
The Properties are generally located where there is a demand for low-income
housing. Accordingly, there is a significant likelihood that new low-income
properties could be built in the general vicinity of the respective Properties.
As a result, the respective Properties' ability to operate at high occupancy
levels is subject to competition from newly built low-income housing.
13
<PAGE>
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
By: Richman American Credit Corp.,
The Manager
Dated: February 14, 2000 /s/ Richard Paul Richman
----------------------------------------
by: Richard Paul Richman
President, Chief Executive
Officer and Director of the Manager
Dated: February 14, 2000 /s/ Neal Ludeke
----------------------------------------
by: Neal Ludeke
Vice President and
Treasurer of the Manager
(Principal Financial and Accounting
Officer of The Trust)
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This article contains summary information extracted from the nine months ended
December 30, 1999 Form 10-Q and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<CIK> 0000897315
<NAME> Neal Ludeke
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-30-2000
<PERIOD-START> MAR-31-1999
<PERIOD-END> DEC-30-1999
<EXCHANGE-RATE> 1.00
<CASH> 1,123,767
<SECURITIES> 924,894
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 11,594,158
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 10,905,676
<TOTAL-LIABILITY-AND-EQUITY> 11,594,158
<SALES> 0
<TOTAL-REVENUES> 86,161
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 915,259
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (829,098)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
