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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT
OF 1934 (FEE REQUIRED)
For the fiscal year ended March 31, 2000
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 No., Including Area Code: (727)573-3800
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class: Beneficial Assignee Certificates
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
Indicate by check mark if disclosure of delinquent filers pursuant to item
405 of Regulation S-K (Sec. 229.405 of this chapter) is not contained
herein, and will be contained to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. X
Number of Record Holders
Title of Each Class March 31, 2000
Limited Partnership Interest 2,266
General Partner Interest 2
DOCUMENTS INCORPORATED BY REFERENCE
Parts III and IV - Form S-11 Registration Statement and all amendments and
supplements thereto.
File No. 33-44238
PART I
Item 1. Business
Gateway Tax Credit Fund III Ltd. ("Gateway") is a Florida Limited
Partnership. The general partners are Raymond James Tax Credit Funds,
Inc., the Managing General Partner, and Raymond James Partners, Inc., both
sponsors of Gateway Tax Credit Fund III Ltd. and wholly-owned subsidiaries
of Raymond James Financial, Inc. Gateway was formed October 17, 1991 and
commenced operations July 16, 1992 with the first admission of Limited
Partners.
Gateway is engaged in only one industry segment, to acquire limited
partnership interests in unaffiliated limited partnerships ("Project
Partnerships"), each of which owns and operates one or more apartment
complexes eligible for Low-Income Housing Tax Credits under Section 42 of
the Internal Revenue Code ("Tax Credits"), received over a ten year period.
Subject to certain limitations, Tax Credits may be used by Gateway's
investors to reduce their income tax liability generated from other income
sources. Gateway will terminate on December 31, 2040, or sooner, in
accordance with the terms of its Limited Partnership Agreement. As of
March 31, 2000, Gateway received capital contributions of $1,000 from the
General Partners and from the Limited Partners, $10,395,000 in Series 7,
$9,980,000 from Series 8, $6,254,000 from Series 9, $5,043,000 from Series
10 and $5,127,000 from Series 11.
Gateway offered Limited Partnership units in series. Each series is
treated as though it were a separate partnership, investing in a separate
and distinct pool of Project Partnerships. Net proceeds from each series
are used to acquire Project Partnerships which are specifically allocated
to such series. Income or loss and all tax items from the Project
Partnerships acquired by each series are specifically allocated among the
limited partners of such series.
Operating profits and losses, cash distributions from operations and Tax
Credits are allocated 99% to the Limited Partners and 1% to the General
Partners. Profit or loss and cash distributions from sales of property
will be allocated as described in the Limited Partnership Agreement.
As of March 31, 2000, Gateway had invested in 39 Project Partnerships for
Series 7, 43 Project Partnerships for Series 8, 24 Project Partnerships for
Series 9, 15 Project Partnerships for Series 10 and 12 Project Partnerships
for Series 11. Gateway acquired its interests in these properties by
becoming a limited partner in the Project Partnerships that own the
properties. The primary source of funds for each series is the capital
contributions from Limited Partner investors.
All but eight of the properties are financed with mortgage loans from the
Farmers Home Administration (now called United States Department of
Agriculture - Rural Development) ("USDA-RD") under Section 515 of the
Housing Act of 1949. These mortgage loans are made at low interest rates
for multi-family housing in rural and suburban areas, with the requirement
that the interest savings be passed on to low income tenants in the form of
lower rents. A significant portion of the project partnerships also
receive rental assistance from USDA-RD to subsidize certain qualifying
tenants. One recently acquired property in Series 7 received conventional
financing. One property in Series 9, two properties in Series 10 and one
property in Series 11 are fully financed through the HOME Investment
Partnerships Program. These HOME Program loans provide financing at rates
of 0 % to 0.5% for a period of 15 to 42 years. One property in Series 11
is partially financed by HOME. Two properties in Series 11 received
conventional financing.
Risks related to the operations of Gateway are described in detail on
pages 29 through 38 of the Prospectus, as supplemented, under the Caption
"Risk Factors" which is incorporated herein by reference. The investment
objectives of Gateway are to:
1) Provide tax benefits to Limited Partners in the form of Tax
Credits during the period in which each Project is eligible to claim
tax credits;
2)Preserve and protect the capital contribution of Investors;
3) Participate in any capital appreciation in the value of the
Projects; and
4) Provide passive losses to i) individual investors to offset
passive income from other passive activities, and ii) corporate
investors to offset business income.
The investment objectives and policies of Gateway are described in detail
on pages 39 through 47 of the Prospectus, as supplemented, under the
caption "Investment Objectives and Policies" which is incorporated herein
by reference.
Gateway's goal is to invest in a diversified portfolio of Project
Partnerships located in rural and suburban locations with a high demand for
low income housing. As of March 31, 2000 the Series' investor capital
contributions were successfully invested in Project Partnerships which met
the investment criteria. Management anticipates that competition for
tenants will only be with other low income housing projects and not with
conventionally financed housing. With a significant number of rural
American households living below the poverty level in substandard housing,
management believes there will be a continuing demand for affordable low
income housing for the foreseeable future.
Gateway has no direct employees. Services are performed by the Managing
General Partner and its affiliates and by agents retained by it. The
Managing General Partner has full and exclusive discretion in management
and control of Gateway.
Item 2. Properties
Gateway owns a majority interest in properties through its limited
partnership investments in Project Partnerships. The largest single net
investment in a Project Partnership in Series 7 is 15.6% of the Series'
total balance sheet assets, Series 8 is 8.1%, Series 9 is 15.6%, Series 10
is 20.5% and Series 11 is 21.7%. The following table provides certain
summary information regarding the Project Partnerships in which Gateway had
an interest as of December 31, 1999:
Item 2 - Properties (continued):
SERIES 7
OCCU-
LOCATION OF # OF DATE PROPERTY PANCY
PARTNERSHIP PROPERTY UNIT ACQUIRED COST RATE
- ----------- ----------- ---- -------- -------- -----
Nottingham Pisgah, AL 18 6/92 717,067 100%
Cedar Hollow Waterloo, NE 24 7/92 935,912 96%
Sunrise Mission, SD 44 7/92 2,519,939 91%
Mountain City Mountain City, TN 40 8/92 1,592,708 100%
Burbank Falls City, NE 24 8/92 1,000,742 100%
Washington Bloomfield, NE 24 9/92 970,309 88%
BrookStone McCaysville, GA 40 9/92 1,459,987 98%
Tazewell New Tazewell, TN 44 9/92 1,694,460 100%
N. Irvine Irvine, KY 24 9/92 1,019,229 100%
Horton Horton, KS 24 9/92 932,540 83%
Manchester Manchester, GA 42 9/92 1,475,429 93%
Waynesboro Waynesboro, GA 24 9/92 817,498 100%
Lakeland II Lakeland, GA 30 9/92 1,009,647 90%
Mt. Vernon Mt. Vernon, GA 24 9/92 900,526 71%
Meadow Run Dawson, GA 48 9/92 1,744,840 90%
Spring Creek II Quitman, GA 24 9/92 808,475 100%
Warm Springs Warm Springs, GA 22 9/92 823,327 91%
Blue Ridge Blue Ridge, GA 41 9/92 1,339,143 93%
Walnut Elk Point, SD 24 9/92 1,006,859 100%
Pioneer Mountain View, AR 48 9/92 1,342,489 100%
Dilley Dilley, TX 28 9/92 889,051 97%
Elsa Elsa, TX 40 9/92 1,340,481 100%
Clinch View Gate City, VA 42 9/92 1,774,521 100%
Jamestown Jamestown, TN 40 9/92 1,497,964 100%
Leander Leander, TX 36 9/92 1,114,334 100%
Louisa Sr. Louisa, KY 36 9/92 1,504,659 100%
Orchard Commons Crab Orchard, KY 12 9/92 479,661 95%
Vardaman Vardaman, MS 24 9/92 905,694 100%
Heritage Park Paze, AZ 32 9/92 1,558,643 94%
BrooksHollow Jasper, GA 40 9/92 1,438,920 100%
Cavalry Crossing Ft. Scott, KS 40 9/92 1,774,492 98%
Carson City Carson City, KS 24 11/92 957,858 92%
Matteson Capa, KS 24 11/92 937,850 79%
Pembroke Pembroke, KY 16 12/92 623,304 100%
Robynwood Cynthiana, KY 24 12/92 1,011,684 96%
Atoka Atoka, OK 24 1/93 835,334 96%
Coalgate Coalgate, OK 24 1/93 828,505 100%
Hill Creek West Blocton, AL 24 11/93 968,228 92%
Cardinal Mountain Home, AR 32 11/93 781,436 91%
---- ----------
1,195 45,333,745
==== ==========
An average effective rental per unit is $3,374 per year ($281 per month).
Item 2 - Properties (continued):
SERIES 8
OCCU-
LOCATION OF # OF DATE PROPERTY PANCY
PARTNERSHIP PROPERTY UNIT ACQUIRED COST RATE
- ----------- ----------- ----- -------- -------- ------
Purdy Purdy, MO 16 12/92 570,951 69%
Galena Galena, KS 24 12/92 750,586 100%
Antlers 2 Antlers, OK 24 1/93 787,859 96%
Holdenville Holdenville, OK 24 1/93 892,598 100%
Wetumka Wetumka, OK 24 1/93 812,853 100%
Mariners Cove Marine City, MI 32 1/93 1,270,387 94%
Mariners Cove Sr. Marine City, MI 24 1/93 986,612 100%
Antlers Antlers, OK 36 3/93 1,321,039 94%
Bentonville Bentonville, AR 24 3/93 758,489 96%
Deerpoint Elgin, AL 24 3/93 932,474 79%
Aurora Aurora, MO 28 3/93 886,857 100%
Baxter Baxter Springs, KS 16 4/93 533,085 100%
Arbor Gate Bridgeport, AL 24 5/93 918,303 96%
Timber Ridge Collinsville, AL 24 5/93 895,627 96%
Concordia Sr. Concordia, KS 24 5/93 826,389 88%
Mountainburg Mountainburg, AR 24 6/93 883,990 96%
Lincoln Pierre, SD 25 5/93 1,114,275 92%
Fox Ridge Russellville, AL 24 6/93 902,785 75%
Meadow View Bridgeport, NE 16 6/93 718,724 94%
Sheridan Auburn, NE 16 6/93 752,487 81%
Morningside Kenton, OH 32 6/93 1,187,597 100%
Grand Isle Grand Isle, ME 16 6/93 1,198,084 63%
Meadowview Van Buren, AR 29 8/93 994,717 90%
Taylor Taylor, TX 44 9/93 1,530,767 100%
Brookwood Gainesboro, TN 44 9/93 1,810,597 93%
Pleasant Valley Lynchburg, TN 33 9/93 1,350,337 100%
Reelfoot Ridgely, TN 20 9/93 814,568 100%
River Rest Newport, TN 34 9/93 1,403,425 100%
Kirskville Kirksville, MO 24 9/93 831,492 100%
Cimmaron Arco, ID 24 9/93 1,101,739 79%
Kenton Kenton, OH 46 9/93 1,770,964 100%
Lovingston Lovingston, VA 64 9/93 2,726,198 100%
Pontotoc Pontotoc, MS 36 10/93 1,326,113 100%
So. Brenchley Rexburg, ID 30 10/93 1,548,673 97%
Hustonville Hustonville, KY 16 10/93 695,605 100%
Northpoint Jackson, KY 24 10/93 1,085,065 96%
Brooks Field Louisville, GA 32 10/93 1,171,823 97%
Brooks Lane Clayton, GA 36 10/93 1,348,191 100%
Brooks Point Dahlonega, GA 41 10/93 1,657,691 98%
Brooks Run Jasper, GA 24 10/93 923,814 100%
Logan Heights Russellville, KY 24 11/93 951,730 58%
Lakeshore 2 Tuskegee, AL 36 12/93 1,415,885 100%
Cottondale Cottondale, FL 25 1/94 948,319 96%
----- -----------
1,207 47,309,764
===== ===========
An average effective rental per unit is $3,283 per year ($273 per month).
Item 2 - Properties (continued):
SERIES 9
OCCU-
LOCATION OF # OF DATE PROPERTY PANCY
PARTNERSHIP PROPERTY UNIT ACQUIRED COST RATE
- ----------- ----------- ----- -------- -------- ------
Jay Jay, OK 24 9/93 810,597 100%
Boxwood Lexington, TX 24 9/93 770,939 100%
Stilwell 3 Stilwell, OK 16 9/93 587,132 81%
Arbor Trace Lake Park, GA 24 11/93 918,358 100%
Arbor Trace 2 Lake Park, GA 42 11/93 1,806,434 95%
Omega Omega, GA 36 11/93 1,407,304 94%
Cornell 2 Watertown, SD 24 11/93 1,152,826 83%
Elm Creek Pierre, SD 24 11/93 1,183,256 83%
Marionville Marionville, MO 20 11/93 696,979 95%
Lamar Lamar, AR 24 12/93 904,325 96%
Mt. Glen Heppner, OR 24 12/93 1,059,006 75%
Centreville Centreville, AL 24 12/93 973,835 96%
Skyview Troy, AL 36 12/93 1,409,957 97%
Sycamore Coffeyville, KS 40 12/93 1,783,471 100%
Bradford Cumberland, KY 24 12/93 1,055,632 96%
Cedar Lane London, KY 24 12/93 995,281 100%
Stanton Stanton, KY 24 12/93 1,001,158 100%
Abernathy Abernathy, TX 24 1/94 781,898 100%
Pembroke Pembroke, KY 24 1/94 998,687 100%
Meadowview Greenville, AL 24 2/94 1,134,218 96%
Town Branch Mt. Vernon, KY 24 12/93 984,410 100%
Fox Run Ragland, AL 24 3/94 971,038 75%
Maple Street Emporium, PA 32 3/94 1,701,192 100%
Manchester Manchester, GA 18 5/94 737,525 94%
----- ----------
624 25,825,458
===== ==========
An average effective rental per unit is $3,260 per year ($272 per month).
Item 2 - Properties (continued):
SERIES 10
OCCU-
LOCATION OF # OF DATE PROPERTY PANCY
PARTNERSHIP PROPERTY UNIT ACQUIRED COST RATE
- ----------- ----------- ----- -------- -------- ------
Redstone Challis, ID 24 11/93 1,125,496 83%
Albany Albany, KY 24 1/94 1,029,662 88%
Oak Terrace Bonifay, FL 18 1/94 664,297 94%
Wellshill West Liberty, KY 32 1/94 1,345,844 100%
Applegate Florence, AL 36 2/94 1,835,942 97%
Heatherwood Alexander, AL 36 2/94 1,609,061 100%
Peachtree Gaffney, SC 28 3/94 1,046,466 100%
Donna Donna, TX 50 1/94 1,780,076 100%
Wellsville Wellsville, NY 24 2/94 1,335,010 100%
Tecumseh Tecumseh, NE 24 4/94 1,072,910 75%
Clay City Clay City, KY 24 5/94 1,023,549 96%
Irvine West Irvine, KY 24 5/94 1,088,804 88%
New Castle New Castle, KY 24 5/94 1,021,516 88%
Stigler Stigler, OK 20 7/94 754,056 100%
Courtyard Huron, SD 21 8/94 767,840 100%
---- ----------
409 17,500,529
==== ==========
An average effective rental per unit is $3,274 per year ($273 per month).
Item 2 - Properties (continued):
SERIES 11
OCCU-
LOCATION OF # OF DATE PROPERTY PANCY
PARTNERSHIP PROPERTY UNIT ACQUIRED COST RATE
- ----------- ----------- ----- -------- -------- ------
Homestead Pinetop, AZ 32 9/94 1,755,138 100%
Mountain Oak Collinsville, AL 24 9/94 879,424 92%
Eloy Eloy, AZ 24 11/94 929,632 100%
Gila Bend Gila Bend, AZ 36 11/94 1,274,647 83%
Creekstone Dallas, GA 40 12/94 2,008,604 88%
Tifton Tifton, GA 36 12/94 1,706,886 97%
Cass Towne Cartersville, GA 10 12/94 325,820 100%
Warsaw Warsaw, VA 56 12/94 3,324,766 100%
Royston Royston, GA 25 12/94 935,906 100%
Red Bud Mokane, MO 8 12/94 301,117 100%
Cardinal Mountain Home, AR 32 12/94 509,809 91%
Parsons Parsons, KS 38 12/94 1,344,835 100%
---- -----------
361 15,296,584
==== ===========
An average effective rental per unit is $3,882 per year ($323 per month).
Item 2 - Properties (continued):
A summary of the cost of the properties at December 31, 1999, 1998 and 1997
is as follows:
12/31/99
SERIES 7 SERIES 8 SERIES 9
Land $ 1,619,533 $1,978,810 $1,099,659
Land Improvements 168,279 425,856 178,022
Buildings 41,891,396 43,313,983 23,585,182
Furniture and Fixtures 1,654,537 1,591,115 962,595
----------- ------------- -----------
Properties, at Cost 45,333,745 47,309,764 25,825,458
Less: Accum.Depreciation 10,191,396 10,000,399 4,837,043
----------- ------------- ------------
Properties, Net $ 35,142,349 $37,198,365 $20,988,415
SERIES 10 SERIES 11 TOTAL
Land $648,625 $ 599,197 $5,945,824
Land Improvements 59,331 0 831,488
Buildings 16,293,622 14,273,888 139,358,071
Furniture and Fixtures 498,951 423,500 5,130,698
------------ ------------- ------------
Properties, at Cost 17,500,529 15,296,585 151,266,081
Less: Accum.Depreciation 2,735,822 2,218,007 30,093,667
------------- ------------- ------------
Properties, Net $14,764,707 $13,078,578 $121,172,414
12/31/98
SERIES 7 SERIES 8 SERIES 9
Land $ 1,615,119 $ 1,978,810 $ 1,099,659
Land Improvements 80,236 425,076 178,022
Buildings 41,955,360 43,302,724 23,565,995
Furniture and Fixtures 1,604,319 1,547,616 950,216
----------- -------------- -----------
Properties, at Cost 45,255,034 47,254,226 25,793,892
Less: Accum.Depreciation 8,688,650 8,013,045 3,996,265
----------- -------------- ------------
Properties, Net $ 36,566,384 $ 39,241,181 $ 21,797,627
SERIES 10 SERIES 11 TOTAL
Land $648,625 $ 599,197 5,941,410
Land Improvements 59,331 0 742,665
Buildings 16,293,622 14,225,668 139,343,369
Furniture and Fixtures 477,090 448,900 5,028,141
------------ -------------- ------------
Properties, at Cost 17,478,668 15,273,765 151,055,585
Less: Accum.Depreciation 2,238,601 1,745,396 24,681,957
------------- -------------- ------------
Properties, Net $15,240,067 $ 13,528,369 $126,373,628
------------- -------------- ------------
12/31/97
SERIES 7 SERIES 8 SERIES 9
Land $ 1,615,119 $ 1,978,810 $ 1,099,659
Land Improvements 78,933 425,076 178,022
Buildings 41,938,629 43,289,922 23,558,060
Furniture and Fixtures 1,593,970 1,517,796 916,152
----------- ----------- -----------
Properties, at Cost 45,226,651 $47,211,604 $25,751,893
Less: Accum.Depreciation 7,267,152 6,410,571 3,111,495
----------- ----------- -----------
Properties, Net $37,959,499 $40,801,033 $22,640,398
=========== =========== ===========
SERIES 10 SERIES 11 TOTAL
Land $ 648,625 $ 599,197 $ 5,941,410
Land Improvements 58,185 0 740,216
Buildings 16,279,503 14,270,891 139,337,005
Furniture and Fixtures 453,895 361,272 4,843,085
----------- ----------- ------------
Properties, at Cost $17,440,208 $15,231,360 $150,861,716
Less: Accum.Depreciation 1,734,926 1,240,103 19,764,247
----------- ----------- ------------
Properties, Net $15,705,282 $13,991,257 $131,097,469
=========== =========== ============
Item 3. Legal Proceedings
Gateway is not a party to any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
As of March 31, 2000, no matters were submitted to a vote of security
holders, through the solicitation of proxies or otherwise.
PART II
Item 5. Market for the Registrant's Securities and Related Security Holder
Matters
(a) Gateway's Limited Partnership interests are not publicly
traded. There is no market for Gateway's Limited Partnership
interests and it is unlikely that any will develop. No transfers
of Limited Partnership Interests are permitted without the prior
written consent of the Managing General Partner. There have been
several transfers from inception to date with most being from
individuals to their trusts or heirs. The Managing General Partner
is not aware of the price at which Limited Partnership units are
transferred. The criteria for and the details regarding transfers
are found on pages A-28 and A-29 of the Limited Partnership
Agreement under ARTICLE XII under the caption "Transfers of Units"
found in the Prospectus, which is incorporated herein by reference.
There have been no distributions to Limited Partner investors from
inception to date.
(b) Approximate Number of Equity Security Holders:
Number of Holders
Title of Class as of March 31, 2000
Limited Partner Interest 2,266
General Partner Interest 2
Item 6. Selected Financial Data
FOR THE YEARS ENDED MARCH 31,
SERIES 7 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Total
Revenues $ 43,650 $ 43,550 $ 44,592 $ 43,466 $ 54,373
Net Loss (555,736) (812,428) (1,010,863) (1,026,918 (1,014,650)
Equity in
Losses of
Project
Partnerships (471,721) (718,721) (909,991) (936,184) (936,257)
Total Assets 2,972,199 3,481,841 4,255,853 5,218,302 6,203,282
Investments
In Project
Partnerships 2,237,728 2,749,505 3,517,852 4,483,546 5,464,982
Per Weighted
Average
Limited
Partnership
Unit: (A)
Tax Credits 161.40 161.40 161.50 160.60 153.40
Portfolio
Income 11.50 11.20 10.30 9.80 9.60
Passive Loss (117.20) (112.50) (117.30) (113.20) (121.90)
Net Loss (52.93) (77.37) (96.27) (97.81) (96.63)
FOR THE YEARS ENDED MARCH 31,
SERIES 8 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Total
Revenues $ 45,674 $ 45,764 $ 46,987 $ 48,637 $ 46,431
Net Loss (1,247,292) (1,055,240) (1,060,938) (1,089,189) (1,201,546)
Equity in
Losses of
Project
Partnerships (1,158,932) (960,106) (963,455) (999,833) (1,110,855)
Total Assets 2,238,666 3,435,008 4,446,829 5,451,625 6,480,200
Investments
In Project
Partnerships 1,423,188 2,612,574 3,608,229 4,614,122 5,658,160
Per Weighted
Average
Limited
Partnership
Unit: (A)
Tax Credits 160.80 160.80 160.80 159.20 143.80
Portfolio
Income 10.70 10.60 10.60 8.90 8.00
Passive Loss (133.70) (137.00) (130.60) (138.30) (131.60)
Net Loss (124.10) (104.99) (105.56) (108.37) (119.55)
FOR THE YEARS ENDED MARCH 31,
SERIES 9 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Total
Revenues $ 25,243 $ 24,872 $ 25,209 $ 25,848 $ 29,092
Net Loss (547,924) (570,231) (512,506) (557,202) (504,713)
Equity in
Losses of
Project
Partnerships (496,765) (517,316) (459,629) (506,807) (458,221)
Total Assets 2,774,157 3,289,179 3,830,465 4,307,579 4,824,662
Investments
In Project
Partnerships 2,303,872 2,818,653 3,363,377 3,848,367 4,397,301
Per Weighted
Average
Limited
Partnership
Unit: (A)
Tax Credits 153.40 153.40 153.40 153.30 143.10
Portfolio
Income 10.40 10.10 9.10 8.10 8.50
Passive Loss (124.90) (106.70) (100.80) (108.70) (102.70)
Net Loss (86.74) (90.27) (81.13) (88.20) (79.90)
FOR THE YEARS ENDED MARCH 31,
SERIES 10 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Total
Revenues $ 24,705 $ 24.421 $ 24,885 $ 24,953 $ 27,591
Net Loss (328,409) (264,781) (224,779) (214,923) (189,034)
Equity in
Losses of
Project
Partnerships (299,182) (237,276) (195,183) (190,191) (167,857)
Total Assets 3,202,510 3,523,986 3,784,494 4,006,856 4,203,400
Investments
In Project
Partnerships 2,764,397 3,086,492 3,352,669 3,571,518 3,788,041
Per Weighted
Average
Limited
Partnership
Unit: (A)
Tax Credits 149.60 149.60 149.60 149.60 139.10
Portfolio
Income 11.30 11.10 9.70 8.88 8.80
Passive Loss (103.70) (89.60) (82.30) (79.00) (79.80)
Net Loss (64.47) (51.98) (44.13) (42.19) (37.11)
FOR THE YEARS ENDED MARCH 31,
SERIES 11 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Total
Revenues $ 27,431 $ 27,001 $ 26,502 $ 30,465 $ 69,130
Net Loss (164,613) (152,545) (183,183) (196,029) (108,465)
Equity in
Losses of
Project
Partnerships (143,181) (128,802) (163,364) (182,485) (134,308)
Total Assets 3,998,687 4,163,711 4,314,491 4,487,039 4,962,767
Investments
In Project
Partnerships 3,534,837 3,701,295 3,861,731 4,070,301 4,340,316
Per Weighted
Average
Limited
Partnership
Unit: (A)
Tax Credits 145.70 145.70 146.20 57.50 32.70
Portfolio
Income 10.20 10.80 9.50 11.00 20.70
Passive Loss (51.10) (51.20) (58.40) (57.50) (37.60)
Net Loss (31.79) (29.46) (35.37) (37.85) (20.94)
(A) The tax information is as of December 31, the year end for tax
purposes.
The above selected financial data should be read in conjunction with the
financial statements and related notes appearing elsewhere in this report.
This statement is not covered by the auditor's opinion included elsewhere
in this report.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations, Liquidity and Capital Resources
Operations commenced on July 16, 1992 with the first admission of
Limited Partners in Series 7. 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 years ended March
31, 2000, March 31, 1999 and March 31, 1998. General and Administrative
expenses - General Partner and General and Administrative expenses - Other
for the year ended March 31, 2000 are comparable to March 31, 1999 and
March 31, 1998.
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. As of March 31,
2000, the series had invested $7,732,089 in 39 Project Partnerships located
in 14 states containing 1,195 apartment units. Average occupancy of the
Project Partnerships was 96% at December 31, 1999.
The Equity in Losses of Project Partnerships decreased from $718,721 for
the year ended March 31, 1999 to $471,721 for the year ended March 31, 2000
as a result of not including losses of $396,875, as these losses would
reduce the investment in certain Project Partnerships below zero. Equity in
losses of Project Partnerships for the year ended March 31, 1999 of
$718,721 were comparable to the Equity in losses of Project Partnerships of
$909,991 for the year ended March 31, 1998. 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. (These Project Partnerships reported depreciation and
amortization of $1,573,077, $1,525,659 and $1,502,758 for the periods ended
December 31, 1997, 1998 and 1999, respectively.) As a result, management
expects that this Series, as well as the Series described below, will
report its equity in Project Partnerships as a loss for tax and financial
reporting purposes. Overall management believes the Project Partnerships
are operating as expected and are generating tax credits which meet
projections. However, one Project Partnership experienced significant
operating problems worth noting.
At March 31, 2000, the Series had $324,156 of short-term investments
(Cash and Cash Equivalents). It also had $410,315 in Zero Coupon
Treasuries with annual maturities providing $57,000 in fiscal year 2000
increasing to $86,000 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 $555,736 for the year ending March 31, 2000. However, after adjusting
for Equity in Losses of Project Partnerships of $471,721 and the changes in
operating assets and liabilities, net cash used in operating activities was
$42,376 of which $44,219 was the Asset Management Fee actually paid. Cash
provided by investing activities totaled $67,219 consisting of $33,446 in
cash distributions from the Project Partnerships and $33,773 from matured
Zero Coupon Treasuries. There were no unusual events or trends to
describe.
A Project Partnership located in Elk Point, SD experienced cash
shortages from operations in 1998 due to low occupancy. However, in 1999
occupancy rates increased to an average of 96%, which resulted in positive
cash flows for the year. The partnership has shown marked improvement and
is no longer considered a problem. Management does not expect any
materially adverse effect to Gateway from this Project Partnership.
A Project Partnership located in Bloomfield, NE experienced cash
shortages from operations in 1998 due to low occupancy. The project had a
rent increase of $15 per unit as of January 1999. In addition, the average
occupancy rate increased from 81% in 1998 to 86% in 1999, which resulted in
positive cash flows for the year. The local general partner continues to
actively market the development. Management does not expect any materially
adverse effect to Gateway from this Project Partnership.
Series 8 - Gateway closed this Series on June 28, 1993 after receiving
$9,980,000 from 664 Limited Partner investors. As of March 31, 2000, the
series had invested $7,586,105 in 43 Project Partnerships located in 18
states containing 1,207 apartment units. Average occupancy of the Project
Partnerships was 95% at December 31, 1999.
Equity in Losses of Project Partnerships were comparable for the year
ended March 31, 1998 and for the year ended March 31, 1999 and increased to
$1,158,932 for the year ended March 31, 2000. In 1999, four Project
Partnerships had a change in Accounting Principle as a result of changing
its method of depreciating buildings. The effect of the change increased
the net loss of the Project Partnerships for the year ended March 31, 2000
by approximately $492,000. As presented in Note 2, Gateway's share of net
loss increased from $1,129,437 in 1998 to $1,588,675 in 1999. Suspended
Losses increased from $169,331 for the year ended March 31, 1999 to
$429,743 for the year ended March 31, 2000. These losses would reduce the
investment in Project Partnerships below zero. (These Project Partnerships
reported depreciation and amortization of $1,627,815, $1,609,164 and
$2,101,828 for the periods ended December 31, 1997, 1998 and 1999,
respectively.) Overall management believes the Project Partnerships are
operating as expected and are generating tax credits which meet
projections.
At March 31, 2000, the Series had $425,447 of short-term investments
(Cash and Cash Equivalents). It also had $390,031 in Zero Coupon
Treasuries with annual maturities providing $54,000 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 $1,247,292 for the year ending March 31, 2000. However, after adjusting
for Equity in Losses of Project Partnerships of $1,158,932 and the changes
in operating assets and liabilities, net cash used in operating activities
was $42,376 of which $44,219 was the Asset Management Fee actually paid.
Cash provided by investing activities totaled $56,221 consisting of $24,159
received in cash distributions from the Project Partnerships and $32,062
from matured Zero Coupon Treasuries. Management believes the sources of
funds are sufficient to meet current and ongoing operating costs for the
foreseeable future, and to pay part of the Asset Management Fee. There
were no unusual events or trends to describe.
A Project Partnership located in Russellville, KY experienced cash
shortages from operations in 1998 and 1999 due to low occupancies. The
local general partner has funded the deficit by lending $16,400 in previous
years. The cash shortage for 1999 was considerably less than in 1998 and
no additional funding was needed in 1999. However, the local general
partner will continue to fund the operating deficits of the partnership as
needed. Management does not expect any materially adverse effect to
Gateway from this Project Partnership.
Series 9 - Gateway closed this Series on September 30, 1993 after
receiving $6,254,000 from 406 Limited Partner investors. As of March 31,
2000, the series had invested $4,914,116 in 24 Project Partnerships located
in 11 states containing 624 apartment units. Average occupancy of the
Project Partnerships was 94% at December 31, 1999.
Equity in losses of Project Partnerships of $496,765 for the year ended
March 31, 2000 were comparable to $517,316 for the year ended March 31,
1999 and to $459,629 for the year ended March 31, 1998. (These Project
Partnerships reported depreciation and amortization of $901,709, $887,635
and $842,272 for the years ended December 31, 1997, 1998 and 1999,
respectively.) Overall management believes the Project Partnerships are
operating as expected and are generating tax credits which meet
projections.
At March 31, 2000, the Series had $209,964 of short-term investments
(Cash and Cash Equivalents). It also had $260,321 in Zero Coupon
Treasuries with annual maturities providing $32,000 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 $547,924 for the period ending March 31, 2000. After adjusting for
Equity in Losses of Project Partnerships of $496,765 and the changes in
operating assets and liabilities, net cash used in operating activities was
$20,258 of which $18,828 was the Asset Management Fee actually paid. Cash
provided by investing activities totaled $34,604 consisting of $12,297
received in cash distributions from the Project Partnerships and $22,307
from matured Zero Coupon Treasuries. Management believes the sources of
funds are sufficient to meet current and ongoing operating costs for the
foreseeable future, and to pay part of the Asset Management Fee. There
were no unusual events or trends to describe.
A Project Partnership located in Pierre, SD experienced cash shortages
from operations in 1999 due to low occupancy as a result of a reduction of
state employees and the development of a 150-unit manufactured housing
subdivision. The manufacturer offers houses for rent, rent to own, or for
sale with no down payment. The general partner is actively marketing the
project. Management does not expect any materially adverse effect to
Gateway from this Project Partnership.
Series 10 - Gateway closed this Series on January 21, 1994 after
receiving $5,043,000 from 325 Limited Partner investors. As of March 31,
2000, the series had invested $3,914,672 in 15 Project Partnerships located
in 10 states containing 409 apartment units. Average occupancy of the
Project Partnerships was 95% at December 31, 1999.
Equity in losses of Project Partnerships of $299,182 for the year
ended March 31, 2000 were comparable to $237,276 for the year ended March
31, 1999 and to $195,183 for the year ended March 31, 1998. (These Project
Partnerships reported depreciation and amortization of $511,020, $511,296
and $502,179 for the years ended December 31, 1997, 1998, and 1999
respectively.) Overall management believes the Project Partnerships are
operating as expected and are generating tax credits which meet
projections.
At March 31, 2000, the Series had $226,070 of short-term investments
(Cash and Cash Equivalents). It also had $212,043 in Zero Coupon
Treasuries with annual maturities providing $25,000 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 net loss of
$328,409 for the year ending March 31, 2000. After adjusting for Equity in
Losses of Project Partnerships of $299,182 and the changes in operating
assets and liabilities, net cash used in operating activities was $24,564
of which $28,392 was the Asset Management Fee actually paid. Cash provided
by investing activities totaled $34,068 consisting of $17,291 received in
cash distributions from the Project Partnerships and $16,777 from matured
Zero Coupon Treasuries. Management believes the sources of funds are
sufficient to meet current and ongoing operating costs for the foreseeable
future, and to pay part of the Asset Management Fee. 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. As of March 31, 2000 the series had
invested $4,128,042 in 12 Project Partnerships located in 7 states
containing 361 apartments. Average occupancy of the Project Partnerships
was 95% at December 31, 1999.
Equity in losses of Project Partnerships were comparable for the years
ended March 31, 1998, 1999 and 2000. (These Project Partnerships reported
depreciation and amortization of $506,631, $510,062 and $516,489 for the
periods ended December 31, 1997, 1998 and 1999.) Overall management
believes the Project Partnerships are operating as expected and are
generating tax credits which meet projections.
At March 31, 2000, the Series had $230,874 of short-term investments
(Cash and Cash Equivalents). It also had $232,976 in Zero Coupon
Treasuries with annual maturities providing $26,000 in fiscal year 1999
increasing to $44,000 in fiscal year 2010. Management believes the sources
of funds are sufficient to meet current and ongoing operating costs for the
foreseeable future, and to pay part of the Asset Management Fee.
As disclosed on the statement of cash flows, the Series had net loss of
$164,613 for the year ending March 31, 2000. After adjusting for Equity in
Losses of Project Partnerships of $143,181 and the changes in operating
assets and liabilities, net cash used in operating activities was $23,504
of which $29,914 was the Asset Management Fee actually paid. Cash provided
by investing activities totaled $31,354 consisting of $16,371 from matured
Zero Coupon Treasures and $14,983 received in cash distributions from
Project Partnerships. 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. There were no unusual
events or trends to describe.
Item 8. Financial Statements and Supplementary Data
INDEPENDENT AUDITOR'S REPORT
To the Partners of Gateway Tax Credit Fund III Ltd.
We have audited the accompanying balance sheets of each of the five Series
(Series 7 through 11) constituting Gateway Tax Credit Fund III Ltd. (a
Florida Limited Partnership) as of March 31, 2000 and 1999 and the related
statements of operations, partners' equity (deficit), and cash flows of
each of the five Series for each of the periods presented. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based
on our audits. We did not audit the financial statements of certain
underlying Project Partnerships owned by Gateway Tax Credit Fund III Ltd.
for each of the periods presented, the investments in which are recorded
using the equity method of accounting. The investments in these
partnerships total the following as of March 31, 2000 and 1999 and the
equity in their losses total for each of the periods indicated:
Assets Partnership Loss
March 31, Year Ended March 31,
--------- ---------------------
2000 1999 2000 1999 1998
---- ---- ---- ---- ----
Series 7 $1,480,234 $1,861,653 $ 357,271 $386,712 $536,596
Series 8 903,307 1,714,808 837,764 363,389 516,746
Series 9 1,326,409 1,369,649 173,999 137,114 128,053
Series 10 1,916,458 2,029,179 97,059 62,725 65,059
Series 11 2,953,738 3,123,469 148,088 130,338 148,066
Those statements were audited by other auditors whose reports have been
furnished to us, and our opinion, insofar as it relates to the amounts
included for such underlying partnerships, is based solely on the reports
of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits and
the reports of other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material
respects, the financial position of each of the five Series (Series 7
through 11) constituting Gateway Tax Credit Fund III Ltd. as of March 31,
2000 and 1999, and the results of their operations and their cash flows for
each of the periods presented, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed under Item
14(a)(2) in the index are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. These schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in
our opinion, based on our audits and the reports of other auditors, fairly
state in all material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a whole.
As discussed in Note 2, four of the Project Partnerships, whose financial
statements were audited by other auditors, changed their method of
computing depreciation for the year ended December 31, 1999.
/s/ Spence Marston, Bunch, Morris & Co.
SPENCE, MARSTON, BUNCH, MORRIS & CO.
Certified Public Accountants
Clearwater, Florida
July 6, 2000
PART I - Financial Information
Item 1. Financial Statements
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2000 AND 1999
SERIES 7 2000 1999
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $ 324,156 $ 299,313
Investments in Securities 54,067 50,412
----------- -----------
Total Current Assets 378,223 349,725
Investments in Securities 356,248 382,611
Investments in Project Partnerships, Net 2,237,728 2,749,505
----------- -----------
Total Assets $2,972,199 $3,481,841
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 54,468 $ 52,109
----------- -----------
Total Current Liabilities 54,468 52,109
----------- -----------
Long-Term Liabilities:
Payable to General Partners 312,688 268,953
----------- -----------
Partners' Equity (deficit):
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 March 31, 2000 and 1999) 2,670,270 3,220,449
General Partners (65,227) (59,670)
----------- -----------
Total Partners' Equity 2,605,043 3,160,779
----------- -----------
Total Liabilities and Partners' Equity $2,972,199 $3,481,841
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2000 AND 1999
SERIES 8 2000 1999
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $ 425,447 $ 411,602
Investments in Securities 51,329 45,734
---------- ----------
Total Current Assets 476,776 457,336
Investments in Securities 338,702 365,098
Investments in Project Partnerships, Net 1,423,188 2,612,574
---------- ----------
Total Assets $2,238,666 $3,435,008
========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 45,318 $ 42,668
---------- ----------
Total Current Liabilities 45,318 42,668
---------- ----------
Long-Term Liabilities:
Payable to General Partners 364,673 316,373
---------- ----------
Partners' Equity (deficit):
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 March 31, 2000 and 1999) 1,898,013 3,132,833
General Partners (69,338) (56,866)
----------- -----------
Total Partners' Equity 1,828,675 3,075,967
----------- -----------
Total Liabilities and Partners' Equity $2,238,666 $3,435,008
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2000 AND 1999
SERIES 9 2000 1999
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $ 209,964 $ 195,618
Investments in Securities 30,560 29,663
----------- -----------
Total Current Assets 240,524 225,281
Investments in Securities 229,761 245,245
Investments in Project Partnerships, Net 2,303,872 2,818,653
----------- -----------
Total Assets $2,774,157 $3,289,179
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 25,970 $ 24,561
----------- -----------
Total Current Liabilities 25,970 24,561
----------- -----------
Long-Term Liabilities:
Payable to General Partners 214,521 183,028
----------- -----------
Partners' Equity (deficit):
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 March 31, 2000 and 1999) 2,563,166 3,105,611
General Partners (29,500) (24,021)
----------- -----------
Total Partners' Equity 2,533,666 3,081,590
----------- -----------
Total Liabilities and Partners' Equity $2,774,157 $3,289,179
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2000 AND 1999
SERIES 10 2000 1999
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents 226,070 $ 216,566
Investments in Securities 23,784 22,855
----------- -----------
Total Current Assets 249,854 239,421
Investments in Securities 188,259 198,073
Investments in Project Partnerships, Net 2,764,397 3,086,492
----------- -----------
Total Assets $3,202,510 $3,523,986
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 29,116 $ 28,101
----------- -----------
Total Current Liabilities 29,116 28,101
----------- -----------
Long-Term Liabilities:
Payable to General Partners 57,475 51,557
----------- -----------
Partners' Equity (deficit):
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 March 31, 2000 and 1999) 3,128,940 3,454,065
General Partners (13,021) (9,737)
----------- -----------
Total Partners' Equity 3,115,919 3,444,328
----------- -----------
Total Liabilities and Partners' Equity $3,202,510 $3,523,986
=========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2000 AND 1999
SERIES 11 2000 1999
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $ 230,874 $ 223,024
Investments in Securities 24,571 22,713
----------- -----------
Total Current Assets 255,445 245,737
Investments in Securities 208,405 216,679
Investments in Project Partnerships, Net 3,534,837 3,701,295
------------ ------------
Total Assets $3,998,687 $4,163,711
============ ============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 28,842 $ 27,805
----------- -----------
Total Current Liabilities 28,842 27,805
----------- -----------
Long-Term Liabilities:
Payable to General Partners 19,190 20,638
----------- -----------
Partners' Equity (deficit):
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 March 31, 2000 and 1999 3,957,139 4,120,106
General Partners (6,484) (4,838)
------------ ------------
Total Partners' Equity 3,950,655 4,115,268
------------ ------------
Total Liabilities and Partners' Equity $3,998,687 $4,163,711
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEETS
MARCH 31, 2000 AND 1999
TOTAL SERIES 7 -11 2000 1999
---- ----
ASSETS
Current Assets:
Cash and Cash Equivalents $ 1,416,511 $ 1,346,123
Investments in Securities 184,311 171,377
------------ ------------
Total Current Assets 1,600,822 1,517,500
Investments in Securities 1,321,375 1,407,706
Investments in Project Partnerships, Net 12,264,022 14,968,519
------------ ------------
Total Assets $15,186,219 $17,893,725
============ ============
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 183,714 $ 175,244
----------- -----------
Total Current Liabilities 183,714 175,244
----------- -----------
Long-Term Liabilities:
Payable to General Partners 968,547 840,549
----------- -----------
Partners' Equity (deficit):
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 March 31, 2000 and 1999) 14,217,528 17,033,063
General Partners (183,570) (155,131)
------------ ------------
Total Partners' Equity 14,033,958 16,877,932
------------ ------------
Total Liabilities and Partners' Equity $15,186,219 $17,893,725
============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,
SERIES 7 2000 1999 1998
---- ---- ----
Revenues:
Interest Income $ 43,650 $ 43,550 $ 44,592
Other Income 7,586 0 0
----------- ----------- -----------
Total Revenues 51,236 43,550 44,592
----------- ----------- -----------
Expenses:
Asset Management Fee-General
Partner 87,952 88,207 88,433
General and Administrative:
General Partner 14,609 13,177 14,380
Other 18,494 16,673 21,005
Amortization 14,196 19,200 21,646
----------- ----------- ------------
Total Expenses 135,251 137,257 145,464
----------- ----------- ------------
Loss Before Equity in Losses
of Project Partnerships (84,015) (93,707) (100,872)
Equity in Losses of Project
Partnerships (471,721) (718,721) (909,991)
------------ ------------ ------------
Net Loss $ (555,736) $ (812,428) $(1,010,863)
============ ============ ============
Allocation of Net Loss:
Assignees $ (550,179) $ (804,304) $(1,000,754)
General Partners (5,557) (8,124) (10,109)
------------ ------------ ------------
$ (555,736) $ (812,428) $(1,010,863)
============ ============ ============
Net Loss Per Beneficial
Assignee Certificate $ (52.93) $ (77.37) $ (96.27)
Number of Beneficial Assignee ============ ============ ============
Certificates Outstanding 10,395 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 YEARS ENDED MARCH 31,
SERIES 8 2000 1999 1998
---- ---- ----
Revenues:
Interest Income $ 45,674 $ 45,764 $ 46,987
Other Income 2,760 0 0
----------- ---------- -----------
Total Revenues 48,434 45,764 46,987
----------- ---------- -----------
Expenses:
Asset Management Fee-General
Partner 91,655 91,933 92,191
General and Administrative:
General Partner 16,108 14,528 15,855
Other 19,976 18,371 21,722
Amortization 9,055 16,066 14,702
----------- ----------- ------------
Total Expenses 136,794 140,898 144,470
----------- ----------- ------------
Loss Before Equity in Losses
of Project Partnerships (88,360) (95,134) (97,483)
Equity in Losses of Project
Partnerships (1,158,932) (960,106) (963,455)
----------- ----------- ------------
Net Loss $(1,247,292) $(1,055,240) $(1,060,938)
=========== =========== ============
Allocation of Net Loss:
Assignees $(1,234,819) $(1,044,688) $(1,050,329)
General Partners (12,473) (10,552) (10,609)
----------- ----------- ------------
$(1,247,292) $(1,055,240) $(1,060,938)
=========== =========== ============
Net Loss Per Beneficial
Assignee Certificate $ (124.10) $ (104.99) $ (105.56)
Number of Beneficial Assignee =========== =========== ============
Certificates Outstanding 9,950 9,950 9,950
=========== =========== ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31,
SERIES 9 2000 1999 1998
---- ---- ----
Revenues:
Interest Income $ 25,243 $ 24,872 $ 25,209
Other Income 0 0 0
----------- ---------- -----------
Total Revenues 25,243 24,872 25,209
----------- ---------- -----------
Expenses:
Asset Management Fee-General
Partner 50,319 50,458 50,592
General and Administrative:
General Partner 8,991 8,109 8,849
Other 11,373 10,618 12,575
Amortization 5,719 8,602 6,070
----------- ---------- ------------
Total Expenses 76,402 77,787 78,086
----------- ---------- ------------
Loss Before Equity in Losses
of Project Partnerships (51,159) (52,915) (52,877)
Equity in Losses of Project
Partnerships (496,765) (517,316) (459,629)
---------- ---------- -----------
Net Loss $ (547,924) $(570,231) $ (512,506)
=========== ========== ===========
Allocation of Net Loss:
Assignees $ (542,445) $(564,529) $ (507,381)
General Partners (5,479) (5,702) (5,125)
----------- ---------- -----------
$ (547,924) $(570,231) $ (512,506)
=========== ========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (86.74) $ (90.27) $ (81.13)
Number of Beneficial Assignee ============ ========== ===========
Certificates Outstanding 6,254 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 YEARS ENDED MARCH 31,
SERIES 10 2000 1999 1998
---- ---- ----
Revenues:
Interest Income $ 24,705 $ 24,421 $ 24,885
Other Income 0 0 0
----------- ---------- -----------
Total Revenues 24,705 24,421 24,885
----------- ---------- -----------
Expenses:
Asset Management Fee-General
Partner 34,309 34,427 34,101
General and Administrative:
General Partner 5,619 5,068 5,531
Other 8,382 7,500 9,031
Amortization 5,622 4,931 5,818
---------- ---------- -----------
Total Expenses 53,932 51,926 54,481
---------- ---------- -----------
Loss Before Equity in Losses
of Project Partnerships (29,227) (27,505) (29,596)
Equity in Losses of Project
Partnerships (299,182) (237,276) (195,183)
---------- ---------- -----------
Net Loss $(328,409) $(264,781) $ (224,779)
========== ========== ===========
Allocation of Net Loss:
Assignees $(325,125) $(262,133) $ (222,531)
General Partners (3,284) (2,648) (2,248)
---------- ---------- -----------
$(328,409) $(264,781) $ (224,779)
========== ========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (64.47) $ (51.98) $ (44.13)
Number of Beneficial Assignee ========== ========== ===========
Certificates Outstanding 5,043 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 YEARS ENDED MARCH 31,
SERIES 11 2000 1999 1998
---- ---- ----
Revenues:
Interest Income $ 27,431 $ 27,001 $ 26,502
Other Income 0 0 0
----------- ----------- -----------
Total Revenues 27,431 27,001 26,502
----------- ----------- -----------
Expenses:
Asset Management Fee-General
Partner 28,465 27,721 27,281
General and Administrative:
General Partner 4,495 4,054 4,424
Other 7,609 7,007 8,124
Amortization 8,294 11,962 6,492
----------- ----------- -----------
Total Expenses 48,863 50,744 46,321
----------- ----------- -----------
Loss Before Equity in Losses
of Project Partnerships (21,432) (23,743) (19,819)
Equity in Losses of Project
Partnerships (143,181) (128,802) (163,364)
---------- ---------- -----------
Net Loss $(164,613) $(152,545) $ (183,183)
========== ========== ===========
Allocation of Net Loss:
Assignees $(162,967) $(151,020) $ (181,351)
General Partners (1,646) (1,525) (1,832)
---------- ---------- -----------
$(164,613) $(152,545) $ (183,183)
========== ========== ===========
Net Loss Per Beneficial
Assignee Certificate $ (31.79) $ (29.46) $ (35.37)
Number of Beneficial Assignee ========== ========== ===========
Certificates Outstanding 5,127 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 YEARS ENDED MARCH 31,
TOTAL SERIES 7 - 11 2000 1999 1998
---- ---- ----
Revenues:
Interest Income $ 166,703 $ 165,608 $ 168,175
Other Income 10,346 0 0
----------- ----------- -----------
Total Revenues 177,049 165,608 168,175
----------- ----------- -----------
Expenses:
Asset Management Fee-General
Partner 292,700 292,746 292,598
General and Administrative:
General Partner 49,822 44,936 49,039
Other 65,834 60,169 72,457
Amortization 42,886 60,761 54,728
------------ ------------ -----------
Total Expenses 451,242 458,612 468,822
------------ ------------ -----------
Loss Before Equity in Losses
of Project Partnerships (274,193) (293,004) (300,647)
Equity in Losses of Project
Partnerships (2,569,781) (2,562,221) (2,691,622)
------------- ------------- ------------
Net Loss $ (2,843,974) $ (2,855,225) $(2,992,269)
============= ============= ============
Allocation of Net Loss:
Assignees $ (2,815,535) $ (2,826,674) $(2,962,346)
General Partners (28,439) (28,551) (29,923)
------------- ------------- ------------
$ (2,843,974) $ (2,855,225) $(2,992,269)
============= ============= ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
Limited General
SERIES 7 Partners Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 5,025,507 $ (41,437) $ 4,984,070
Net Loss (1,000,754) (10,109) (1,010,863)
------------ ------------ ------------
Balance at March 31, 1998 4,024,753 (51,546) 3,973,207
Net Loss (804,304) (8,124) (812,428)
------------ ------------ ------------
Balance at March 31, 1999 3,220,449 (59,670) 3,160,779
Net Loss (550,179) (5,557) (555,736)
------------ ------------ ------------
Balance at March 31, 2000 $ 2,670,270 $ (65,227) $ 2,605,043
============= ============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
Limited General
SERIES 8 Partners Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 5,227,849 $ (35,704) $ 5,192,145
Net Loss (1,050,329) (10,609) (1,060,938)
------------ ------------ ------------
Balance at March 31, 1998 4,177,520 (46,313) 4,131,207
Net Loss (1,044,688) (10,552) (1,055,240)
------------ ------------ ------------
Balance at March 31, 1999 3,132,832 (56,865) 3,075,967
Net Loss (1,234,819) (12,473) (1,247,292)
------------ ------------ -----------
Balance at March 31, 2000 $ 1,898,013 $ (69,338) $ 1,828,675
============ ============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
Limited General
SERIES 9 Partners Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 4,177,521 $ (13,194) $ 4,164,327
Net Loss (507,381) (5,125) (512,506)
------------ ------------ ------------
Balance at March 31, 1998 3,670,140 (18,319) 3,651,821
Net Loss (564,529) (5,702) (570,231)
------------ ------------ ------------
Balance at March 31, 1999 3,105,611 (24,021) 3,081,590
Net Loss (542,445) (5,479) (547,924)
------------ ------------- ------------
Balance at March 31, 2000 $ 2,563,166 $ (29,500) $ 2,533,666
============ ============= ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
Limited General
SERIES 10 Partners Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 3,938,729 $ (4,841) $ 3,933,888
Net Loss (222,531) (2,248) (224,779)
------------ ------------ ------------
Balance at March 31, 1998 3,716,198 (7,089) 3,709,109
Net Loss (262,133) (2,648) (264,781)
------------ ------------ ------------
Balance at March 31, 1999 3,454,065 (9,737) 3,444,328
Net Loss (325,125) (3,284) (328,409)
------------ ------------ ------------
Balance at March 31, 2000 $ 3,128,940 $ (13,021) $ 3,115,919
============ ============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
Limited General
SERIES 11 Partners Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 4,452,477 $ (1,481) $ 4,450,996
Net Loss (181,351) (1,832) (183,183)
------------ ------------ ------------
Balance at March 31, 1998 4,271,126 (3,313) 4,267,813
Net Loss (151,020) (1,525) (152,545)
------------ ------------ ------------
Balance at March 31, 1999 4,120,106 (4,838) 4,115,268
Net Loss (162,967) (1,646) (164,613)
------------ ------------ ------------
Balance at March 31, 2000 $ 3,957,139 $ (6,484) $ 3,950,655
============ ============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
Limited General
TOTAL SERIES 7 - 11 Partners Partners Total
--------- -------- -----
Balance at March 31, 1997 $ 22,822,083 $ (96,657) $ 22,725,426
Net Loss (2,962,346) (29,923) (2,992,269)
------------ ------------ ------------
Balance at March 31, 1998 19,859,737 (126,580) 19,733,157
Net Loss (2,826,674) (28,551) (2,855,225)
------------ ------------ ------------
Balance at March 31, 1999 17,033,063 (155,131) 16,877,932
Net Loss (2,815,535) (28,439) (2,843,974)
------------ ------------ ------------
Balance at March 31, 2000 $ 14,217,528 $ (183,570) $ 14,033,958
============ ============ ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
SERIES 7 2000 1999 1998
- -------- ---- ---- ----
Cash Flows from Operating
Activities:
Net Loss $ (555,736) $ (812,428) $(1,010,863)
Adjustments to Reconcile Net
Loss to Net Cash Used in
Operating Activities:
Amortization 14,196 19,200 21,646
Accreted Interest Income on
Investments in Securities (30,291) (31,130) (32,118)
Equity in Losses of Project
Partnerships 471,721 718,721 909,991
Interest Income from
Redemption of Securities 19,227 15,558 11,911
Distributions Included in
Other Income (7,586) 0 0
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 46,093 38,417 48,413
---------- ---------- -----------
Net Cash Used in Operating
Activities (42,376) (51,662) (51,020)
---------- ---------- -----------
Cash Flows from Investing
Activities:
Distributions Received from
Project Partnerships 33,446 30,427 34,057
Redemption of Investment in
Securities 33,773 34,442 35,089
----------- ----------- -----------
Net Cash Provided by
Investing Activities 67,219 64,869 69,146
----------- ----------- -----------
Increase in Cash and
Cash Equivalents 24,843 13,207 18,126
Cash and Cash Equivalents at
Beginning of Year 299,313 286,106 267,980
----------- ----------- -----------
Cash and Cash Equivalents at
End of Year $ 324,156 $ 299,313 $ 286,106
========== =========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
SERIES 8 2000 1999 1998
- -------- ---- ---- ----
Cash Flows from Operating
Activities:
Net Loss $(1,247,292) $(1,055,240) $(1,060,938)
Adjustments to Reconcile Net
Loss to Net Cash Used in
Operating Activities:
Amortization 9,055 16,066 14,702
Accreted Interest Income on
Investments in Securities (27,199) (27,959) (28,861)
Equity in Losses of Project
Partnerships 1,158,932 960,106 963,455
Interest Income from
Redemption of Securities 15,938 12,705 9,582
Distributions Included in
Other Income (2,760) 0 0
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 50,950 43,419 56,142
---------- ---------- -----------
Net Cash Used in Operating
Activities (42,376) (50,903) (45,918)
---------- ---------- -----------
Cash Flows from Investing
Activities:
Decrease in Receivable
from Project Partnerships 0 0 453
Distributions Received from
Project Partnerships 24,159 19,483 27,736
Redemption of Investment in
Securities 32,062 32,295 32,418
----------- ----------- -----------
Net Cash Provided by
Investing Activities 56,221 51,778 60,607
----------- ----------- -----------
Increase in Cash and
Cash Equivalents 13,845 875 14,689
Cash and Cash Equivalents at
Beginning of Year 411,602 410,727 396,038
----------- ----------- -----------
Cash and Cash Equivalents at
End of Year $ 425,447 $ 411,602 $ 410,727
=========== =========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
SERIES 9 2000 1999 1998
- -------- ---- ---- ----
Cash Flows from Operating
Activities:
Net Loss $ (547,924) $ (570,231) $ (512,506)
Adjustments to Reconcile Net
Loss to Net Cash Used in
Operating Activities:
Amortization 5,719 8,602 6,070
Accreted Interest Income on
Investments in Securities (16,413) (16,924) (17,585)
Equity in Losses of Project
Partnerships 496,765 517,316 459,629
Interest Income from
Redemption of Securities 8,693 6,769 5,203
Distributions Include in
Other Income 0 0 0
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 32,902 28,946 35,392
----------- ----------- -----------
Net Cash Used in Operating
Activities (20,258) (25,522) (23,797)
----------- ----------- -----------
Cash Flows from Investing
Activities:
Distributions Received from
Project Partnerships 12,297 18,805 19,291
Redemption of Investment in
Securities 22,307 22,231 22,797
----------- ----------- -----------
Net Cash Provided by
Investing Activities 34,604 41,036 42,088
----------- ---------- -----------
Increase in Cash and
Cash Equivalents 14,346 15,514 18,291
Cash and Cash Equivalents at
Beginning of Year 195,618 180,104 161,813
----------- ----------- -----------
Cash and Cash Equivalents at
End of Year $ 209,964 $ 195,618 $ 180,104
=========== =========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
SERIES 10 2000 1999 1998
- -------- ---- ---- ----
Cash Flows from Operating
Activities:
Net Loss $ (328,409) $ (264,781) $ (224,779)
Adjustments to Reconcile Net
Loss to Net Cash Used in
Operating Activities:
Amortization 5,622 4,931 5,818
Accreted Interest Income on
Investments in Securities (15,114) (15,540) (15,796)
Equity in Losses of Project
Partnerships 299,182 237,276 195,183
Interest Income from
Redemption of Securities 7,223 6,057 4,355
Distributions Included in
Other Income 0 0 0
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 6,932 4,273 10,130
----------- ----------- -----------
Net Cash Used in Operating
Activities (24,564) (27,784) (25,089)
----------- ----------- -----------
Cash Flows from Investing
Activities:
Distributions Received from
Project Partnerships 17,291 23,972 17,848
Decrease in Payable -
Project Partnerships 0 0 (7,712)
Redemption of Investment in
Securities 16,777 17,943 17,645
---------- ---------- -----------
Net Cash Provided by
Investing Activities 34,068 41,915 27,781
---------- ---------- -----------
Increase in Cash and
Cash Equivalents 9,504 14,131 2,692
Cash and Cash Equivalents at
Beginning of Year 216,566 202,435 199,743
---------- ---------- -----------
Cash and Cash Equivalents at
End of Year $ 226,070 $ 216,566 $ 202,435
========== ========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
SERIES 11 2000 1999 1998
- -------- ---- ---- ----
Cash Flows from Operating
Activities:
Net Loss $(164,613) $ (152,545) $ (183,183)
Adjustments to Reconcile Net
Loss to Net Cash Used in
Operating Activities:
Amortization 8,294 11,962 6,492
Accreted Interest Income on
Investments in Securities (17,584) (17,832) (18,209)
Equity in Losses of Project
Partnerships 143,181 128,802 163,364
Interest Income from
Redemption of Securities 7,629 6,127 4,426
Distributions Include in
Other Income 0 0 0
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners (411) 1,765 10,635
----------- ----------- -----------
Net Cash Used in Operating
Activities (23,504) (21,721) (16,475)
------------ ------------ -----------
Cash Flows from Investing
Activities:
Distributions Received from
Project Partnerships 14,983 19,674 38,714
Redemption of Investment in
Securities 16,371 16,873 16,574
----------- ----------- -----------
Net Cash Provided by
Investing Activities 31,354 36,547 55,288
----------- ----------- -----------
Increase in Cash and
Cash Equivalents 7,850 14,826 38,813
Cash and Cash Equivalents at
Beginning of Year 223,024 208,198 169,385
----------- ----------- -----------
Cash and Cash Equivalents at
End of Year $ 230,874 $ 223,024 $ 208,198
=========== =========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998:
TOTAL SERIES 7 - 11 2000 1999 1998
- -------- ---- ---- ----
Cash Flows from Operating
Activities:
Net Loss $(2,843,974) $(2,855,225) $(2,992,269)
Adjustments to Reconcile Net
Loss to Net Cash Used in
Operating Activities:
Amortization 42,886 60,761 54,728
Accreted Interest Income on
Investments in Securities (106,601) (109,385) (112,569)
Equity in Losses of Project
Partnerships 2,569,781 2,562,221 2,691,622
Interest Income from
Redemption of Securities 58,710 47,216 35,477
Distributions Included in
Other Income (10,346) 0 0
Changes in Operating Assets
and Liabilities:
Increase in Payable to
General Partners 136,466 116,820 160,712
----------- ----------- -----------
Net Cash Used in Operating
Activities (153,078) (177,592) (162,299)
----------- ----------- -----------
Cash Flows from Investing
Activities:
Decrease in Receivable from
Project Partnerships 0 0 453
Distributions Received from
Project Partnerships 102,176 112,361 137,646
Increase (Decrease) in Payable
Project Partnerships 0 0 (7,712)
Redemption of Investment in
Securities 121,290 123,784 124,523
----------- ----------- -----------
Net Cash Provided by
Investing Activities 223,466 236,145 254,910
----------- ----------- -----------
Increase in Cash and 70,388 58,553 92,611
Cash Equivalents
Cash and Cash Equivalents at 1,346,123 1,287,570 1,194,959
Beginning of Year ----------- ----------- -----------
Cash and Cash Equivalents at $1,416,511 $1,346,123 $1,287,570
End of Year =========== =========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000, 1999 AND 1998
NOTE 1 - ORGANIZATION:
Gateway Tax Credit Fund III Ltd. ("Gateway"), a Florida Limited
Partnership, was formed October 17, 1991 under the laws of Florida.
Gateway offered its limited partnership interests in Series. The first
Series for Gateway is Series 7. Operations commenced on July 16, 1992 for
Series 7, January 4, 1993 for Series 8, September 30, 1993 for Series 9,
January 21, 1994 for Series 10 and April 29, 1994 for Series 11. Each
Series invests, as a limited partner, in other limited partnerships
("Project Partnerships"), each of which owns and operates apartment
complexes eligible for Low-Income Housing Tax Credits ("Tax Credits"),
provided for in Section 42 of the Internal Revenue Code of 1986. Gateway
will terminate on December 31, 2040 or sooner, in accordance with the terms
of the Limited Partnership Agreement. As of March 31, 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 Statements 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 expense is shown 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.
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.
Change in Accounting Principles
Four of the Project Partnerships changed their method of accounting for
depreciating their buildings from the straight line to the declining
balance method. The effect of this change was reported as a cumulative
effect of a Change in Accounting Principle. The change increased the net
losses reported by the Project Partnerships by $492,138.
Reclassifications
For comparability, the 1998 and 1999 figures have been reclassified,
where appropriate, to conform with the financial statement presentation
used in 2000.
NOTE 3 - INVESTMENT IN SECURITIES:
The March 31, 2000 Balance Sheet includes Investment in Securities
consisting of U.S. Treasury Security Strips which represents their cost,
plus accreted interest income of $168,743 for Series 7, $145,919 for Series
8, $82,562 for Series 9, $71,651 for Series 10 and $81,026 for Series 11.
Gross Unrealized
Estimated Market Cost Plus Gains and
Value Accreted Interest (Losses)
----------------- ----------------- ----------------
Series 7 $ 425,796 $ 410,315 $ 15,481
Series 8 398,214 390,031 8,183
Series 9 258,400 260,321 (1,921)
Series 10 218,032 212,043 5,989
Series 11 246,717 232,976 13,741
As of March 31, 2000, the cost and accreted interest of debt securities by
contractual maturities is as follows:
Series 7 Series 8 Series 9
-------- -------- --------
Due with 1 year $ 54,067 $ 51,329 $ 30,560
After 1 year through 5 years 208,954 195,438 118,882
After 5 years through 10 years 147,294 143,264 110,879
After 10 years 0 0 0
--------- --------- ---------
Total Amount Carried on
Balance Sheet $ 410,315 $ 390,031 $ 260,321
========= ========= =========
Series 10 Series 11 Total
-------- -------- --------
Due with 1 year $ 23,784 $ 24,571 $ 184,311
After 1 year through 5 years 88,377 97,396 709,047
After 5 years through 10 years 99,882 111,009 612,328
After 10 years 0 0 0
--------- --------- ---------
Total Amount Carried on
Balance Sheet $ 212,043 $ 232,976 $1,505,686
========= ========= =========
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 periods ended March 31, 2000, 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, as adjusted by the Consumer
Price Index, 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.
2000 1999 1998
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