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, 2007, 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 were 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, 2007, Gateway had invested in 133 Project Partnerships in total. Project Partnership investments by Series are as follows: 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 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, contained in the Registration Statement, File No. 33-44238 ("Prospectus"), 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 of each Series.
The investment objectives and policies of Gateway are described in detail on pages 39 through 47 of the Prospectus 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, 2007 each 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.
Exit Strategy Upon expiration of the Project Partnership Tax Credit Compliance Period
The IRS compliance period for low-income housing tax credit properties is generally 15 years from occupancy following construction or rehabilitation completion.
As of December 31, 2006, only one of the Project Partnerships had reached the end of its tax credit compliance period. However, all of the other 132 Project Partnerships will reach the end of the tax credit compliance period during one of the years ending December 31, 2007 through December 31, 2010.
When Project Partnerships reach the end of their tax credit compliance period, Gateway initiates a process of disposing of its investment in the Project Partnership. The objective of the process is to sell Gateway's interest in the properties for fair market value and ultimately, when Gateway's last Project Partnership investment is sold, liquidate Gateway.
Item 1A.
Item 1A. Risk Factors
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. No such contributions have been made in fiscal year 2007, 2006 or 2005.
Investors eventually may be allocated profits for tax purposes which exceed any cash Gateway distributes to them. Under these circumstances, unless an investor has passive losses or credits to reduce such tax liability, the investor will have to pay federal income tax without a corresponding cash distribution from Gateway. Similarly, in the event of a sale or foreclosure of an apartment complex, an investor may be allocated taxable income, resulting in tax liability, in excess of any cash distributed to the investor as a result of such event.
There is no assurance that investors will receive any cash distributions from the sale or refinancing of a Project Partnership. The price at which a Project Partnership is sold may not be large enough to pay the mortgage and other expenses which must be paid at such time.
Item 1B.
Item 1B. Unresolved Staff Comments.
None.
Item 2.
Item 2. Properties
Gateway owns a majority interest in properties through its limited partnership investments in Project Partnerships. The largest single net investment as of March 31, 2007 in a Project Partnership for each respective Series is: Series 7 is 21.6% of the Series' total assets and 3.5% of Gateway's total assets, Series 8 is 19.4% of the Series' total assets and 2.6% of Gateway's total assets, Series 9 is 15.4% of the Series' total assets and 1.9% of Gateway's total assets, Series 10 is 28.5% of the Series' total assets and 7.2% of Gateway's total assets, and Series 11 is 26.8% of the Series' total assets and 8.8% of Gateway's total assets.
The following tables provides certain summary information regarding the Project Partnerships in which Gateway had an interest as of December 31, 2006:
SERIES 7
PARTNERSHIP
-----------
LOCATION OF.PROPERTY
-----------
# OF
UNIT
----
DATE
ACQUIRED
--------
PROPERTY
COST
--------
OCCU-PANCY
RATE
-----
Nottingham
Cedar Hollow
Sunrise
Mountain City
Burbank
Washington
Brookstone
Tazewell
N. Irvine
Horton
Manchester
Waynesboro
Lakeland II
Mt. Vernon
Meadow Run
Spring Creek II
Warm Springs
Blue Ridge
Walnut
Pioneer
Dilley
Elsa
Clinch View
Jamestown
Leander
Louisa Sr.
Orchard Commons
Vardaman
Heritage Park
BrooksHollow
Cavalry Crossing
Carson City
Matteson
Pembroke
Robynwood
Atoka
Coalgate
Hill Creek
Cardinal
Pisgah, AL
Waterloo, NE
Mission, SD
Mountain City, TN
Falls City, NE
Bloomfield, NE
McCaysville, GA
New Tazewell, TN
Irvine, KY
Horton, KS
Manchester, GA
Waynesboro, GA
Lakeland, GA
Mt. Vernon, GA
Dawson, GA
Quitman, GA
Warm Springs, GA
Blue Ridge, GA
Elk Point, SD
Mountain View, AR
Dilley, TX
Elsa, TX
Gate City, VA
Jamestown, TN
Leander, TX
Louisa, KY
Crab Orchard, KY
Vardaman, MS
Paze, AZ
Jasper, GA
Ft. Scott, KS
Carson City, KS
Capa, KS
Pembroke, KY
Cynthiana, KY
Atoka, OK
Coalgate, OK
West Blocton, AL
Mountain Home, AR
6/92
7/92
7/92
8/92
8/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
9/92
11/92
11/92
12/92
12/92
1/93
1/93
11/93
11/93
729,584
1,013,443
2,675,686
1,658,014
1,043,231
989,726 1,461,449
1,780,260
1,029,993
932,540
1,474,901
819,325
1,009,647
900,526
1,744,840
808,475
822,934
1,339,144
1,059,696
1,490,047
890,402
1,342,015
1,854,523
1,584,306
1,166,234
1,518,537
479,661
925,239
1,646,234
1,437,907
1,853,889
970,707
960,793
623,304
1,011,684
835,334
828,505
991,547
785,240
100%
100%
100%
100%
88%
46%
100%
100%
100%
83%
98%
100%
93%
100%
92%
100%
95%
98%
96%
100%
90%
95%
98%
98%
100%
100%
100%
100%
94%
100%
85%
88%
88%
88%
96%
96%
100%
100%
100%
----
-----------
1,195
46,489,522
====
===========
The average effective rental income per unit for the year ended December 31, 2006 is $4,262 per year
($355 per month).
Item 2 - Properties (continued):
SERIES 8
PARTNERSHIP
-----------
LOCATION OF
PROPERTY
-----------
# OF
UNIT
-----
DATE
ACQUIRED
--------
PROPERTY
COST
--------
OCCU-
PANCY
RATE
------
Purdy
Galena
Antlers 2
Holdenville
Wetumka
Mariners Cove
Mariners Cove Sr.
Antlers
Bentonville
Deerpoint
Aurora
Baxter
Arbor Gate
Timber Ridge
Concordia Sr.
Mountainburg
Lincoln
Fox Ridge
Meadow View
Sheridan
Morningside
Grand Isle
Meadowview
Taylor
Brookwood
Pleasant Valley
Reelfoot
River Rest
Kirskville
Cimmaron
Kenton
Lovingston
Pontotoc
So. Brenchley
Hustonville
Northpoint
Brooks Field
Brooks Lane
Brooks Point
Brooks Run
Logan Heights
Lakeshore 2
Cottondale
Purdy, MO
Galena, KS
Antlers, OK
Holdenville, OK
Wetumka, OK
Marine City, MI
Marine City, MI
Antlers, OK
Bentonville, AR
Elgin, AL
Aurora, MO
Baxter Springs, KS
Bridgeport, AL
Collinsville, AL
Concordia, KS
Mountainburg, AR
Pierre, SD
Russellville, AL
Bridgeport, NE
Auburn, NE
Kenton, OH
Grand Isle, ME
Van Buren, AR
Taylor, TX
Gainesboro, TN
Lynchburg, TN
Ridgely, TN
Newport, TN
Kirksville, MO
Arco, ID
Kenton, OH
Lovingston, VA
Pontotoc, MS
Rexburg, ID
Hustonville, KY
Jackson, KY
Louisville, GA
Clayton, GA
Dahlonega, GA
Jasper, GA
Russellville, KY
Tuskegee, AL
Cottondale, FL
12/92
12/92
1/93
1/93
1/93
1/93
1/93
3/93
3/93
3/93
3/93
4/93
5/93
5/93
5/93
6/93
5/93
6/93
6/93
6/93
6/93
6/93
8/93
9/93
9/93
9/93
9/93
9/93
9/93
9/93
9/93
9/93
10/93
10/93
10/93
10/93
10/93
10/93
10/93
10/93
11/93
12/93
1/94
613,537
809,692
787,859
892,598
812,853
1,318,319
1,026,699
1,321,039
758,489
948,824
936,677
576,162
943,390
929,109
826,389
883,990
1,141,490
902,785
737,918
784,810
1,189,817
1,200,210
994,717
1,529,792
1,817,225
1,359,733
829,848
1,442,986
831,492
1,182,386
1,781,759
2,778,712
1,342,794
1,585,546
709,635
1,103,271
1,177,691
1,358,623
1,659,514
924,701
954,580
1,437,725
948,319
94%
100%
100%
100%
96%
94%
96%
78%
100%
96%
100%
100%
88%
88%
92%
100%
100%
92%
100%
100%
94%
88%
96%
100%
100%
97%
95%
97%
100%
83%
83%
100%
100%
100%
88%
96%
100%
97%
100%
96%
83%
92%
100%
-----
----------
1,207
48,093,705
=====
==========
The average effective rental income per unit for the year ended December 31, 2006 is $4,217 per year
($351 per month).
Item 2 - Properties (continued):
SERIES 9
PARTNERSHIP
-----------
LOCATION OF
PROPERTY
-----------
# OF
UNIT
-----
DATE
ACQUIRED
--------
PROPERTY
COST
--------
OCCU-PANCY
RATE
------
Jay
Boxwood
Stilwell 3
Arbor Trace
Arbor Trace 2
Omega
Cornell 2
Elm Creek
Marionville
Lamar
Mt. Glen
Centreville
Skyview
Sycamore
Bradford
Cedar Lane
Stanton
Abernathy
Pembroke
Meadowview
Town Branch
Fox Run
Maple Street
Manchester
Jay, OK
Lexington, TX
Stilwell, OK
Lake Park, GA
Lake Park, GA
Omega, GA
Watertown, SD
Pierre, SD
Marionville, MO
Lamar, AR
Heppner, OR
Centreville, AL
Troy, AL
Coffeyville, KS
Cumberland, KY
London, KY
Stanton, KY
Abernathy, TX
Pembroke, KY
Greenville, AL
Mt. Vernon, KY
Ragland, AL
Emporium, PA
Manchester, GA
9/93
9/93
9/93
11/93
11/93
11/93
11/93
11/93
11/93
12/93
12/93
12/93
12/93
12/93
12/93
12/93
12/93
1/94
1/94
2/94
12/93
3/94
3/94
5/94
810,597
770,939
587,132
918,358
1,806,434
1,407,304
1,239,494
1,250,635
774,019
904,325
1,083,535
986,163
1,423,402
1,849,005
1,055,632
1,008,022
1,001,158
781,898
1,006,295
1,137,336
984,410
978,195
1,715,881
735,614
100%
96%
100%
100%
98%
100%
96%
83%
95%
92%
88%
96%
97%
85%
96%
100%
100%
100%
88%
96%
100%
96%
100%
98%
-----
-----------
26,215,783
=====
===========
The average effective rental income per unit for the year ended December 31, 2006 is $4,142 per year
($345 per month).
SERIES 10
PARTNERSHIP
-----------
LOCATION OF
PROPERTY
-----------
# OF
UNIT
-----
DATE
ACQUIRED
--------
PROPERTY
COST
--------
OCCU-PANCY
RATE
------
Redstone
Albany
Oak Terrace
Wellshill
Applegate
Heatherwood
Peachtree
Donna
Wellsville
Tecumseh
Clay City
Irvine West
New Castle
Stigler
Courtyard
Challis, ID
Albany, KY
Bonifay, FL
West Liberty, KY
Florence, AL
Alexander, AL
Gaffney, SC
Donna, TX
Wellsville, NY
Tecumseh, NE
Clay City, KY
Irvine, KY
New Castle, KY
Stigler, OK
Huron, SD
11/93
1/94
1/94
1/94
2/94
2/94
3/94
1/94
2/94
4/94
5/94
5/94
5/94
7/94
8/94
1,167,910
1,042,529
664,731
1,350,944
1,864,817
1,642,814
1,100,996
1,778,667
1,438,809
1,142,972
1,043,798
1,113,664
1,025,932
754,056
786,217
100%
100%
100%
100%
97%
97%
93%
98%
100%
83%
100%
96%
96%
100%
100%
----
----------
17,918,856
====
==========
The average effective rental income per unit for the year ended December 31, 2006 is $4,149 per year
($346 per month).
Item 2 - Properties (continued):
SERIES 11
The average effective rental income per unit for the year ended December 31, 2006 is $4,496 per year
($375 per month).
A summary of the book value of the fixed assets of the properties at December 31, 2006, 2005 and
2004 is as follows:
12/31/06
SERIES 7
SERIES 8
SERIES 9
Land
Land Improvements
Buildings
Furniture and Fixtures
Construction in Progress
Properties, at Cost
Less: Accum. Depreciation
Properties, Net
$ 1,628,119
416,701
42,317,581
2,127,121
-----------
46,489,522
20,491,955
-----------
$25,997,567
===========
$ 1,978,809
446,554
43,601,388
2,066,954
-----------
48,093,705
20,807,872
-----------
$27,285,833
==========
$ 1,099,659
214,171
23,734,613
1,167,340
-----------
26,215,783
10,415,334
-----------
$15,800,449
===========
SERIES 10
SERIES 11
TOTAL
Land
Land Improvements
Buildings
Furniture and Fixtures
Construction in Progress
Properties, at Cost
Less: Accum. Depreciation
Properties, Net
$ 648,625
111,805
16,457,363
701,063
-----------
17,918,856
6,027,529
-----------
$11,891,327
===========
$ 599,197
47,002
14,647,240
577,819
-----------
15,871,258
5,562,727
-----------
$10,308,531
===========
$ 5,954,409
1,236,233
140,758,185
6,640,297
------------
154,589,124
63,305,417
------------
$ 91,283,707
============
Item 2 - Properties (continued):
12/31/05
SERIES 7
SERIES 8
SERIES 9
Land
Land Improvements
Buildings
Furniture and Fixtures
Construction in Progress
Properties, at Cost
Less: Accum. Depreciation
Properties, Net
$ 1,635,366
391,926
42,278,279
1,985,906
-----------
46,291,477
19,022,427
-----------
$27,269,050
===========
$ 1,978,809
424,067
43,481,828
1,976,324
-----------
47,861,028
19,218,334
-----------
$28,642,694
==========
$ 1,099,659
207,602
23,676,553
1,126,301
-----------
26,110,115
9,640,414
-----------
$16,469,701
===========
SERIES 10
SERIES 11
TOTAL
Land
Land Improvements
Buildings
Furniture and Fixtures
Construction in Progress
Properties, at Cost
Less: Accum. Depreciation
Properties, Net
$ 648,625
94,649
16,425,612
663,802
-----------
17,832,688
5,569,061
-----------
$12,263,627
===========
$ 599,197
22,242
14,415,086
626,431
-----------
15,662,956
5,314,654
-----------
$10,348,302
===========
$ 5,961,656
1,140,486
140,277,358
6,378,764
------------
153,758,264
58,764,890
------------
$ 94,993,374
============
12/31/04
SERIES 7
SERIES 8
SERIES 9
Land
Land Improvements
Buildings
Furniture and Fixtures
Construction in Progress
Properties, at Cost
Less: Accum. Depreciation
Properties, Net
$ 1,632,366
387,220
42,243,157
1,920,573
-----------
46,183,316
17,552,593
-----------
$28,630,723
===========
$ 1,978,809
416,985
43,408,843
1,915,791
-----------
47,720,428
17,821,451
-----------
$29,898,977
===========
$ 1,099,659
191,080
23,642,433
1,096,825
6,866
-----------
26,036,863
8,872,295
-----------
$17,164,568
===========
SERIES 10
SERIES 11
TOTAL
Land
Land Improvements
Buildings
Furniture and Fixtures
Construction in Progress
Properties, at Cost
Less: Accum. Depreciation
Properties, Net
$ 648,625
94,649
16,376,552
636,585
-----------
17,756,411
5,103,348
-----------
$12,653,063
===========
$ 599,197
18,163
14,401,963
584,385
-----------
15,603,708
4,809,337
-----------
$10,794,371
===========
$ 5,958,656
1,108,097
140,072,948
6,154,159
6,866
------------
153,300,726
54,159,024
------------
$ 99,141,702
============
Item 3.
Item 3. Legal Proceedings
Gateway is not a party to any material pending legal proceedings.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
As of March 31, 2007, no matters were submitted to a vote of security holders, through the solicitation of proxies or otherwise.
PART II
Item 5.
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 numerous 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, 2007
Limited Partner Interest 2,559
General Partner Interest 2
Item 6.
Item 6. Selected Financial Data
FOR THE YEARS ENDED MARCH 31,
SERIES 7
----
----
----
----
----
Total Revenues
$ 27,050
$ 21,470
$ 24,233
$ 14,725
$ 23,088
Net Loss
(366,648)
(467,796)
(261,487)
(261,362)
(233,056)
Equity in Losses of Project Partnerships
(78,519)
(92,380)
(139,599)
(130,277)
(137,118)
Total Assets
906,324
1,186,879
1,561,768
1,737,330
1,979,828
Investments In Project Partnerships
442,787
641,745
965,655
1,127,941
1,278,834
Per Weighted Average Limited Partnership Unit: (A)
Tax Credits
Portfolio Income
Passive Loss
.96
8.15
(98.00)
8.05
6.16
(100.77)
21.36
4.56
(109.79)
92.87
5.38
(121.02)
163.08
6.94
(113.17)
Net Loss
(34.92)
(44.55)
(24.90)
(24.89)
(22.20)
FOR THE YEARS ENDED MARCH 31,
SERIES 8
----
----
----
----
----
Total Revenues
$ 15,890
$ 16,963
$ 16,447
$ 20,098
$ 19,195
Net Loss
(240,629)
(216,489)
(179,166)
(176,442)
(193,325)
Equity in Losses of Project
Partnerships
(15,683)
(29,928)
(41,395)
(39,434)
(82,830)
Total Assets
741,918
893,391
1,013,718
1,163,295
1,305,623
Investments In Project Partnerships
377,733
415,344
461,161
512,795
560,231
Per Weighted Average Limited Partnership Unit: (A)
Tax Credits
Portfolio Income
Passive Loss
1.55
10.68
(110.42)
16.92
7.30
(110.88)
56.12
5.23
(121.46)
140.61
5.04
(127.45)
162.03
7.29
(125.60)
Net Loss
(23.87)
(21.48)
(17.77)
(17.50)
(19.18)
FOR THE YEARS ENDED MARCH 31,
SERIES 9
----
----
----
----
----
Total Revenues
$ 6,166
$ 4,437
$ 7,752
$ 4,246
$ 4,433
Net Loss
(248,128)
(341,082)
(234,846)
(311,941)
(346,402)
Equity in Losses of Project Partnerships
(117,893)
(101,726)
(157,684)
(230,291)
(279,770)
Total Assets
694,273
893,314
1,180,228
1,395,878
1,676,155
Investments In Project Partnerships
412,287
550,442
798,862
967,040
1,211,933
Per Weighted Average Limited Partnership Unit: (A)
Tax Credits
Portfolio Income
Passive Loss
.00
7.40
(103.96)
6.34
5.41
(90.51)
102.00
3.98
(105.86)
153.39
4.44
(112.92)
154.93
6.10
(127.50)
Net Loss
(39.28)
(53.99)
(37.18)
(49.38)
(54.84)
FOR THE YEARS ENDED MARCH 31,
SERIES 10
----
----
----
----
----
Total Revenues
$ 2,563
$ 2,561
$ 2,511
$ 1,932
$ 750
Net Loss
(261,712)
(355,932)
(186,236)
(228,743)
(246,694)
Equity in Losses of Project Partnerships
(113,347)
(111,553)
(133,597)
(175,628)
(201,773)
Total Assets
1,398,676
1,626,672
1,945,888
2,223,393
2,442,508
Investments In Project Partnerships
1,159,544
1,360,959
1,661,049
1,815,475
2,014,742
Per Weighted Average Limited Partnership Unit: (A)
Tax Credits
Portfolio Income
Passive Loss
.00
8.75
(91.68)
9.58
7.55
(90.73)
106.09
6.36
(111.19)
151.14
6.94
(89.01)
151.14
8.34
(93.89)
Net Loss
(51.38)
(69.87)
(36.58)
(44.91)
(48.43)
FOR THE YEARS ENDED MARCH 31,
SERIES 11
----
----
----
----
----
Total Revenues
$ 3,382
$ 3,382
$ 2,783
$ 2,182
$ 0
Net Loss
(470,714)
(776,165)
(153,967)
(143,577)
(207,311)
Equity in Losses of Project Partnerships
(32,981)
(96,562)
(112,606)
(101,608)
(169,857)
Total Assets
1,821,412
2,271,082
3,034,176
3,228,629
3,377,050
Investments In Project Partnerships
1,505,978
1,926,349
2,664,780
2,799,412
2,914,130
Per Weighted Average Limited Partnership Unit: (A)
Tax Credits
Portfolio Income
Passive Loss
8.57
6.61
(56.12)
110.21
5.75
(52.47)
145.72
4.33
(99.03)
147.19
4.71
(75.39)
147.20
6.21
(61.45)
Net Loss
(90.89)
(149.87)
(29.73)
(27.72)
(40.03)
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.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
This item should be read in conjunction with the financial statements and other items contained elsewhere in this report.
The Managing General Partner monitors developments in the area of legal and regulatory compliance. For example, the Sarbanes-Oxley Act of 2002 (the "Act") mandates or suggests additional compliance measures with regard to governance, disclosure, audit and other areas and certain provisions of the Act will require implementation by Gateway in subsequent years. In light of these additional requirements of the Act, Gateway has and expects to continue to incur increased expenses related to compliance with the Act.
Results of Operations, Liquidity and Capital Resources
Operations commenced on July 16, 1992 with the admission of the first Limited Partners in Series 7. The proceeds from Limited Partner investors' capital contributions available for investment were used to acquire interests in Project Partnerships.
Gateway - All Series - The following discusses the overall results of operations, liquidity and capital resources for Gateway as a whole. A summary of the activity within each specific Series of Gateway then follows.
Distribution income arises from any cash distributions received from Project Partnerships which have a zero investment balance for financial reporting purposes. Distribution income increased 13% in fiscal year 2007 to $55,051, an increase of $6,238 from the fiscal year 2006 distribution income of $48,813, which represented a $4,913 or 9% decrease as compared to distribution income of $53,726 in fiscal year 2005.
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).
Total expenses of Gateway are $1,385,068 for the fiscal year ended March 31, 2007, a decrease of $485,465 as compared to the fiscal year 2006 total expenses of $1,870,533, which represented a $1,302,066 increase in total expenses over the fiscal year 2005 amount of $568,467. Impairment expense represents a significant component of total expenses in fiscal year 2007 and 2006. Impairment expense is a non-cash element of expense that arises whenever events or changes in circumstances indicate that the recorded carrying value of a respective Investment in Project Partnership may not be recoverable. During fiscal year 2007, impairment expense was recorded in the aggregate amount of $467,646. In fiscal year 2006, the impairment expense recorded was $1,078,223. Net of this impairment expense, expenses of Gateway increased $125,112, or 16% in fiscal year 2007 versus fiscal year 2006. The increase in fiscal year 2007 results from increases in the expense of the General Partner in administering the business of Gateway as well as increases in the cost of third-parties who provide services such as audit services to Gateway. The fiscal year 2006 expense represented a $223,843, or 39%, increase over the fiscal year 2005 amount of $568,467.
The sources of funds to pay the expenses of Gateway are cash and cash equivalents and short-term investments which are comprised of U.S. Treasury Security Strips ("Zero Coupon Treasuries") and U.S. Treasury Notes along with the interest earnings thereon, which were purchased with funds set aside for this purpose, and cash distributed to the Series from the operations of the Project Partnerships. Due to the rent limitations applicable to the Project Partnerships projects as a result of their qualifying for Low-Income Housing Tax Credits, Gateway does not expect there to be a significant increase in future rental income of the Project Partnerships. Therefore, cash distributions from the operations of the Project Partnerships are not expected to increase in the near future. Management believes these 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.
The financial performance of each respective Series is summarized as follows:
Series 7 - Gateway closed this series on October 16, 1992 after receiving $10,395,000 from 635 Limited Partner investors. As of March 31, 2007, 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 95% at December 31, 2006.
Equity in losses of Project Partnerships for the year ended March 31, 2007 of $78,519 were $13,861 less than the Equity in Losses of Project Partnerships for the year ended March 31, 2006 which amounted to $92,380. 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 $1,494,903, $1,472,897, and $1,475,207 for the periods ended December 31, 2004, 2005 and 2006, 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. Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. For the fiscal years ended March 31, 2007 and 2006, impairment expenses of $76,196 and $193,195 were recognized in Series 7, respectively. There was no impairment expense in fiscal year 2005. Overall management believes the Project Partnerships are operating as expected and generated Tax Credits which met projections.
At March 31, 2007, the Series had $179,018 of Cash and Cash Equivalents. Series 7 also had $80,760 in Zero Coupon Treasuries with annual maturities providing $81,000 in the current fiscal year and $86,000 in fiscal year 2008. In addition, the Series had $203,759 in U.S. Treasury Notes with a maturity value of $203,000 at June 30, 2007.
As disclosed on the statement of cash flows, the Series had a net loss of $366,648 for the year ending March 31, 2007. However, after considering the Equity in Losses of Project Partnerships of $78,519 and the changes in operating assets and liabilities, net cash used in operating activities was $135,812. Cash used in investing activities totaled $79,200 consisting of $39,620 in cash distributions from the Project Partnerships and $81,000 from matured Zero Coupon Treasuries, offset by $199,820 used to purchase U.S. Treasury Notes in July 2006.
Series 8 - Gateway closed this Series on June 28, 1993 after receiving $9,980,000 from 664 Limited Partner investors. As of March 31, 2007, 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 94% at December 31, 2006.
Equity in losses of Project Partnerships for the year ended March 31, 2007 of $15,683 were $14,245 less than the Equity in Losses of Project Partnerships for the year ended March 31, 2006 which amounted to $29,928. 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 $1,512,305, $1,485,669, and $1,514,946 for the periods ended December 31, 2004, 2005 and 2006, respectively). Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. There were no impairment expenses in fiscal years 2007, 2006, and 2005. Overall management believes the Project Partnerships are operating as expected and generated Tax Credits which met projections.
At March 31, 2007, the Series had $135,130 of Cash and Cash Equivalents. Series 8 also had $77,196 in Zero Coupon Treasuries with annual maturities providing $77,000 in the current fiscal year and $82,000 in fiscal year 2008. In addition, the Series had $127,639 in U.S. Treasury Notes with a maturity value of $127,000 at June 30, 2007. Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.
As disclosed on the statement of cash flows, the Series had a net loss of $240,629 for the year ending March 31, 2007. However, after adjusting for Equity in Losses of Project Partnerships of $15,683 and the changes in operating assets and liabilities, net cash used in operating activities was $151,172. Cash used in investing activities totaled $23,016 consisting of $24,995 in cash distributions from the Project Partnerships and $77,000 from matured Zero Coupon Treasuries, offset by $125,011 used to purchase U.S. Treasury Notes in July 2006.
Series 9 - Gateway closed this Series on September 30, 1993 after receiving $6,254,000 from 406 Limited Partner investors. As of March 31, 2007, 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 96% at December 31, 2006.
Equity in Losses of Project Partnerships for the year ended March 31, 2007 of $117,893 were $16,167 higher than the Equity in Losses of Project Partnerships for the year ended March 31, 2006 which amounted to $101,726. 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 $786,226, $767,851, and $774,921 for the years ended December 31, 2004, 2005 and 2006, respectively). Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. There was no impairment expense in fiscal year 2007. For the fiscal year ended March 31,
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
2006 impairment expense of $127,532 was recognized. There was no impairment expense in fiscal year 2005. Overall management believes the Project Partnerships are operating as expected and generated Tax Credits which met projections.
At March 31, 2007 the Series had $70,044 of Cash and Cash Equivalents. Series 9 also had $84,303 in Zero Coupon Treasuries with annual maturities providing $42,999 in fiscal year 2007 increasing to $47,000 in fiscal year 2009. In addition, the Series had $127,639 in U.S. Treasury Notes with a maturity value of $127,000 at June 30, 2007. 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 $248,128 for the year ending March 31, 2007. However, after considering the Equity in Losses of Project Partnerships of $117,893 and the changes in operating assets and liabilities, net cash used in operating activities was $85,312. Cash used in investing activities totaled $67,637 consisting of $14,375 in cash distributions from the Project Partnerships and $42,999 from matured Zero Coupon Treasuries, offset by $125,011 used to purchase U.S. Treasury Notes in July 2006.
Series 10 - Gateway closed this Series on January 21, 1994 after receiving $5,043,000 from 325 Limited Partner investors. As of March 31, 2007, 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 97% at December 31, 2006.
Equity in losses of Project Partnerships for the year ended March 31, 2007 of $113,347 were $1,794 higher than the Equity in Losses of Project Partnerships for the year ended March 31, 2006 which amounted to $111,553. 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 $469,719, $466,542, and $465,986 for the periods ended December 31, 2004, 2005, and 2006, respectively). Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. For the fiscal years ended March 31, 2007 and 2006, impairment expenses of $46,129 and $156,694 were recognized, respectively. There was no impairment expense in fiscal year 2005. Overall, management believes the Project Partnerships are operating as expected and generated Tax Credits which met projections.
At March 31, 2006, the Series had $40,351 of Cash and Cash Equivalents. Series 10 also had $97,272 in Zero Coupon Treasuries with annual maturities providing $32,000 in fiscal year 2007 increasing to $40,000 in fiscal year 2010. In addition, the Series had $101,509 in U.S. Treasury Notes with a maturity value of $101,000 at June 30, 2007. 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 $261,712 for the year ending March 31, 2007. However, after considering the Equity in Losses of Project Partnerships of $113,347 and the changes in operating assets and liabilities, net cash used in operating activities was $57,324. Cash used in investing activities totaled $47,022 consisting of $20,396 in cash distributions from the Project Partnerships and $32,000 from matured Zero Coupon Treasuries, offset by $99,418 used to purchase U.S. Treasury Notes in July 2006.
Series 11 - Gateway closed this Series on April 29, 1994 after receiving $5,127,000 from 330 Limited investors. As of March 31, 2007 the series had invested $4,128,042 in 12 Project Partnerships located in 7 states containing 361 apartment units. Average occupancy of the Project Partnerships was 87% at December 31, 2006.
Equity in losses of Project Partnerships for the year ended March 31, 2007 of $32,981 were $63,581 lower than Equity in Losses of Project Partnerships for the year ended March 31, 2006 which amounted to $96,562. 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 $511,998, $506,550, and $498,431 for the periods ended December 31, 2004, 2005, and 2006, respectively). Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. For the fiscal years ended March 31, 2007 and 2006, impairment expenses of $345,321 and $600,802 were recognized, respectively. There was no impairment expense in fiscal year 2005. Overall, management believes the Project Partnerships are operating as expected and generated Tax Credits which met projections.
At March 31, 2006, the Series had $53,170 of Cash and Cash Equivalents. Series 11 also had $109,498 in Zero Coupon Treasuries with annual maturities providing $38,000 in fiscal year 2007 increasing to $44,000 in fiscal year 2010. In addition, the Series had $152,766 in U.S. Treasury Notes with a maturity value of $152,000 at June 30, 2007. 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 $470,714 for the year ending March 31, 2007. However, after considering the Equity in Losses of Project Partnerships of $32,981 and the changes in operating assets and liabilities, net cash used in operating activities was $54,653. Cash used in investing activities totaled $99,667, consisting of $11,954 in cash distributions from Project Partnerships and $37,998 from matured Zero Coupon Treasuries, offset by $149,619 used to purchase U.S. Treasury Notes in July 2006.
Exit Strategy Upon expiration of the Project Partnership Tax Credit Compliance Period
The IRS compliance period for low-income housing tax credit properties is generally 15 years from occupancy following construction or rehabilitation completion.
As of December 31, 2006, only one of the Project Partnerships had reached the end of its tax credit compliance period. However, all of the other 132 Project Partnerships will reach the end of the tax credit compliance period during one of the years ending December 31, 2007 through December 31, 2010.
When Project Partnerships reach the end of their tax credit compliance period, Gateway initiates a process of disposing of its investment in the Project Partnership, the objective of the process is to sell Gateway's interest in the properties for fair market value and ultimately, when Gateway's last Project Partnership investment is sold, liquidate Gateway.
Disclosure of Contractual Obligations
(1) The Other Liabilities represent the asset management fees and other general and administrative expense reimbursements owed to the General Partners as of March 31, 2007. It is unsecured, due on demand and, in accordance with the limited partnership agreement, non-interest bearing. As referred to in Note 4, the Managing General Partner does not intend to demand payment of the portion of this balance reflected as due later than one year within the next 12 months.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
As a small business issuer, no information is required.
Item 8.
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Partners of Gateway Tax Credit Fund III Ltd.
We have audited the accompanying balance sheets of Gateway Tax Credit Fund III Ltd. (a Florida Limited Partnership) as of March 31, 2007 and 2006 and the related statements of operations, partners' equity (deficit), and cash flows for each of the years in the two year period ended March 31, 2007. These financial statements are the responsibility of Gateway'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 Project Partnerships for which $1,075,284 of net investment is included in these financial statements as of March 31, 2006, and for which net losses of $64,475 are included in these financial statements for the year ended March 31, 2006. Those financial 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. The financial statements of Gateway Tax Credit Fund III, Ltd. as of March 31, 2005, were audited by other auditors whose report dated September 8, 2005, expressed an unqualified opinion on those statements.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Gateway is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Gateway's internal control over financial reporting. Accordingly we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Gateway Tax Credit Fund III Ltd. at March 31, 2007 and 2006, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
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 15(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.
/s/ Reznick Group, P.C.
REZNICK GROUP, P.C.
Atlanta, Georgia
July 13, 2007
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Partners of Gateway Tax Credit Fund III Ltd.
We have audited the accompanying statements of operations, partners' equity (deficit), and cash flows of each of the five Series (Series 7 through 11) constituting Gateway Tax Credit Fund III Ltd. (a Florida Limited Partnership) for the year ended March 31, 2005. These financial statements are the responsibility of Gateway's management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements of certain Project Partnerships for which net losses included on the statements of operations for the year ended March 31, 2005 are:
Partnership Loss
Year ended March 31, 2005
Series 7
$ 0
Series 8
19,399
Series 9
55,286
Series 10
42,327
Series 11
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 audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statements of operations, partners' equity (deficit), and cash flows are free of material misstatement. Gateway is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Gateway's internal control over financial reporting. Accordingly we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the statements of operations, partners' equity (deficit), and cash flows, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the statements of operations, partners' equity (deficit), and cash flows. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audit and the reports of other auditors, the statements of operations, partners' equity (deficit), and cash flows present fairly, in all material respects, the results of operations and cash flows of each of the five Series (Series 7 through 11) constituting Gateway Tax Credit Fund III Ltd. for the year ended March 31, 2005, in conformity with accounting principles generally accepted in the United States of America.
SPENCE, MARSTON, BUNCH, MORRIS & CO.
Certified Public Accountants
Clearwater, Florida
September 8, 2005
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEET
MARCH 31, 2007 AND 2006
SERIES 7
----
----
ASSETS
Current Assets:
Cash and Cash Equivalents
Investments in Securities
Total Current Assets
Investments in Securities
Investments in Project Partnerships, Net
Total Assets
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners
Total Current Liabilities
Long Term Liabilities:
Payable to General Partners
Partners' Equity (Deficit):
Limited Partners (10,395 units for Series 7
at March 31, 2007 and 2006)
General Partners
Total Partners' Equity
Total Liabilities and Partners' Equity
$ 179,018
284,519
-----------
463,537
442,787
-----------
$ 906,324
===========
$ 60,257
-----------
60,257
-----------
730,352
-----------
205,836
(90,121)
-----------
115,715
-----------
$ 906,324
===========
$ 394,030
76,135
-----------
470,165
74,969
641,745
-----------
$1,186,879
===========
$ 60,090
-----------
60,090
-----------
644,426
-----------
568,818
(86,455)
-----------
482,363
-----------
$1,186,879
===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEET
MARCH 31, 2007 AND 2006
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEET
MARCH 31, 2007 AND 2006
SERIES 9
----
----
ASSETS
Current Assets:
Cash and Cash Equivalents
Investments in Securities
Total Current Assets
Investments in Securities
Investments in Project Partnerships, Net
Total Assets
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners
Total Current Liabilities
Long Term Liabilities:
Payable to General Partners
Partners' Equity (Deficit):
Limited Partners (6,254 units for Series 9
at March 31, 2007 and 2006)
General Partners
Total Partners' Equity
Total Liabilities and Partners' Equity
$ 70,044
170,233
-----------
240,277
41,709
412,287
-----------
$ 694,273
===========
$ 29,911
-----------
29,911
-----------
477,891
-----------
239,442
(52,971)
-----------
186,471
-----------
$ 694,273
===========
$ 222,993
40,745
-----------
263,738
79,134
550,442
-----------
$ 893,314
===========
$ 30,066
-----------
30,066
-----------
428,649
-----------
485,089
(50,490)
-----------
434,599
-----------
$ 893,314
===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEET
MARCH 31, 2007 AND 2006
SERIES 10
----
----
ASSETS
Current Assets:
Cash and Cash Equivalents
Investments in Securities
Total Current Assets
Investments in Securities
Investments in Project Partnerships, Net
Total Assets
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners
Total Current Liabilities
Long Term Liabilities:
Payable to General Partners
Partners' Equity (Deficit):
Limited Partners (5,043 units for Series 10
at March 31, 2007 and 2006)
General Partners
Total Partners' Equity
Total Liabilities and Partners' Equity
$ 40,351
133,864
-----------
174,215
64,917
1,159,544
-----------
$1,398,676
===========
$ 31,747
-----------
31,747
-----------
78,767
-----------
1,319,459
(31,297)
-----------
1,288,162
-----------
$1,398,676
===========
$ 144,697
30,440
-----------
175,137
90,576
1,360,959
-----------
$1,626,672
===========
$ 31,675
-----------
31,675
-----------
45,123
-----------
1,578,554
(28,680)
-----------
1,549,874
-----------
$1,626,672
===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEET
MARCH 31, 2007 AND 2006
SERIES 11
----
----
ASSETS
Current Assets:
Cash and Cash Equivalents
Investments in Securities
Total Current Assets
Investments in Securities
Investments in Project Partnerships, Net
Total Assets
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners
Total Current Liabilities
Partners' Equity (Deficit):
Limited Partners (5,127 units for Series 11
at March 31, 2007 and 2006)
General Partners
Total Partners' Equity
Total Liabilities and Partners' Equity
$ 53,170
190,291
-----------
243,461
71,973
1,505,978
-----------
$1,821,412
===========
$ 34,115
-----------
34,115
-----------
1,815,414
(28,117)
-----------
1,787,297
-----------
$1,821,412
===========
$ 207,490
35,682
-----------
243,172
101,561
1,926,349
-----------
$2,271,082
===========
$ 13,071
-----------
13,071
-----------
2,281,421
(23,410)
-----------
2,258,011
-----------
$2,271,082
===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
BALANCE SHEET
MARCH 31, 2007 AND 2006
TOTAL SERIES 7 -11
----
----
ASSETS
Current Assets:
Cash and Cash Equivalents
Investments in Securities
Receivable - Other
Total Current Assets
Investments in Securities
Investments in Project Partnerships, Net
Total Assets
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners
Total Current Liabilities
Long Term Liabilities:
Payable to General Partners
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, 2007 and 2006)
General Partners
Total Partners' Equity
Total Liabilities and Partners' Equity
$ 477,713
983,742
24,220
------------
1,485,675
178,599
3,898,329
------------
$ 5,562,603
============
$ 207,179
-----------
207,179
-----------
2,060,686
-----------
3,585,698
(290,960)
-----------
3,294,738
-----------
$ 5,562,603
============
$ 1,278,528
255,555
24,220
------------
1,558,303
418,196
4,894,839
------------
$ 6,871,338
============
$ 186,265
-----------
186,265
-----------
1,802,504
-----------
5,157,652
(275,083)
-----------
4,882,569
-----------
$ 6,871,338
============
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
----
----
----
Revenues:
Distribution Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Impairment of Investment in Project Partnerships
Total Expenses
Loss Before Equity in Losses of Project Partnerships and Other Income
Equity in Losses of Project Partnerships
Interest Income
Net Loss
Allocation of Net Loss:
Limited Partners
General Partners
Net Loss Per Limited Partnership Unit
Number of Limited Partnership Units Outstanding
$ 27,050
----------
27,050
----------
85,926
109,100
39,852
31,673
76,196
----------
342,747
----------
(315,697)
(78,519)
27,568
----------
$ (366,648)
===========
$ (362,982)
(3,666)
----------
$ (366,648)
===========
$ (34.92)
===========
10,395
===========
$ 21,470
----------
21,470
----------
86,447
84,526
28,296
30,603
193,195
----------
423,067
----------
(401,597)
(92,380)
26,181
----------
$ (467,796)
===========
$ (463,118)
(4,678)
----------
$ (467,796)
===========
$ (44.55)
===========
10,395
===========
$ 24,233
----------
24,233
----------
86,447
56,857
18,197
7,089
----------
168,590
----------
(144,357)
(139,599)
22,469
----------
$ (261,487)
===========
$ (258,872)
(2,615)
----------
$ (261,487)
===========
$ (24.90)
===========
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
----
----
----
Revenues:
Distribution Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Impairment of Investment in Project Partnerships
Total Expenses
Loss Before Equity in Losses of Project Partnerships and Other Income
Equity in Losses of Project Partnerships
Interest Income
Net Loss
Allocation of Net Loss:
Limited Partners
General Partners
Net Loss Per Limited Partnership Unit
Number of Limited Partnership Units Outstanding
$ 15,890
----------
15,890
----------
89,370
120,278
40,354
12,823
----------
262,825
----------
(246,935)
(15,683)
21,989
----------
$(240,629)
==========
$(238,223)
(2,406)
----------
$(240,629)
==========
$ (23.87)
==========
9,980
==========
$ 16,963
----------
16,963
----------
89,908
93,195
30,409
12,823
----------
226,335
----------
(209,372)
(29,928)
22,811
----------
$(216,489)
==========
$(214,324)
(2,165)
----------
$(216,489)
==========
$ (21.48)
==========
9,980
==========
$ 16,447
----------
16,447
----------
89,908
62,689
19,352
2,553
----------
174,502
----------
(158,055)
(41,395)
20,284
----------
$(179,166)
==========
$(177,374)
(1,792)
----------
$(179,166)
==========
$ (17.77)
==========
9,980
==========
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
----
----
----
Revenues:
Distribution Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Impairment of Investment in Project Partnerships
Total Expenses
Loss Before Equity in Losses of Project Partnerships and Other Income
Equity in Losses of Project Partnerships
Interest Income
Net Loss
Allocation of Net Loss:
Limited Partners
General Partners
Net Loss Per Limited Partnership Unit
Number of Limited Partnership Units Outstanding
$ 6,166
----------
6,166
----------
49,242
67,132
24,841
12,053
----------
153,268
----------
(147,102)
(117,893)
16,867
----------
$(248,128)
==========
$(245,647)
(2,481)
----------
$(248,128)
==========
$ (39.28)
==========
6,254
==========
$ 4,437
----------
4,437
----------
49,509
52,016
18,273
12,194
127,532
----------
259,524
----------
(255,087)
(101,726)
15,731
----------
$(341,082)
==========
$(337,671)
(3,411)
----------
$(341,082)
==========
$ (53.99)
==========
6,254
==========
$ 7,752
----------
7,752
----------
49,509
34,990
11,260
2,377
----------
98,136
----------
(90,384)
(157,684)
13,222
----------
$(234,846)
==========
$(232,498)
(2,348)
----------
$(234,846)
==========
$ (37.18)
==========
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
----
----
----
Revenues:
Distribution Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Impairment of Investment in Project Partnerships
Total Expenses
Loss Before Equity in Losses of Project Partnerships and Other Income
Equity in Losses of Project Partnerships
Interest Income
Net Loss
Allocation of Net Loss:
Limited Partners
General Partners
Net Loss Per Limited Partnership Unit
Number of Limited Partnership Units Outstanding
$ 2,563
----------
2,563
----------
33,643
41,958
19,835
24,106
46,129
---------
165,671
---------
(163,108)
(113,347)
14,743
----------
$(261,712)
==========
$(259,095)
(2,617)
----------
$(261,712)
==========
$ (51.38)
==========
5,043
==========
$ 2,561
----------
2,561
----------
33,819
32,510
13,039
24,700
156,694
---------
260,762
---------
(258,201)
(111,553)
13,822
----------
$(355,932)
==========
$(352,373)
(3,559)
----------
$(355,932)
==========
$ (69.87)
==========
5,043
==========
$ 2,511
----------
2,511
----------
33,819
21,868
8,149
4,141
----------
67,977
----------
(65,466)
(133,597)
12,737
----------
$(186,326)
==========
$(184,463)
(1,863)
----------
$(186,326)
==========
$ (36.58)
==========
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
----
----
----
Revenues:
Distribution Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Impairment of Investment in Project Partnerships
Total Expenses
Loss Before Equity in Losses of Project Partnerships and Other Income
Equity in Losses of Project Partnerships
Interest Income
Net Loss
Allocation of Net Loss:
Limited Partners
General Partners
Net Loss Per Limited Partnership Unit
Number of Limited Partnership Units Outstanding
$ 3,382
----------
3,382
----------
27,989
33,565
20,185
33,497
345,321
----------
460,557
----------
(457,175)
(32,981)
19,442
----------
$(470,714)
==========
$(466,007)
(4,707)
----------
$(470,714)
==========
$ (90.89)
==========
5,127
==========
$ 3,382
----------
3,382
----------
28,021
26,008
12,519
33,495
600,802
----------
700,845
----------
(697,463)
(96,562)
17,860
----------
$(776,165)
==========
$(768,404)
(7,761)
----------
$(776,165)
==========
$ (149.87)
==========
5,127
==========
$ 2,783
----------
2,783
----------
28,021
17,494
7,404
6,343
----------
59,262
----------
(56,479)
(112,606)
15,118
----------
$(153,967)
==========
$(152,427)
(1,540)
----------
$(153,967)
==========
$ (29.73)
==========
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
----
----
----
Revenues:
Distribution Income
Total Revenues
Expenses:
Asset Management Fee-General Partner
General and Administrative:
General Partner
Other
Amortization
Impairment of Investment in Project Partnerships
Total Expenses
Loss Before Equity in Losses of Project Partnerships and Other Income
Equity in Losses of Project Partnerships
Interest Income
Net Loss
Allocation of Net Loss:
Limited Partners
General Partners
$ 55,051
-----------
55,051
-----------
286,170
372,033
145,067
114,152
467,646
-----------
1,385,068
-----------
(1,330,017)
(358,423)
100,609
-----------
$(1,587,831)
============
$(1,571,954)
(15,877)
------------
$(1,587,831)
============
$ 48,813
-----------
48,813
-----------
287,704
288,255
102,536
113,815
1,078,223
-----------
1,870,533
-----------
(1,821,720)
(432,149)
96,405
-----------
$(2,157,464)
============
$(2,135,890)
(21,574)
------------
$(2,157,464)
============
$ 53,726
-----------
53,726
-----------
287,704
193,898
64,362
22,503
-----------
568,467
-----------
(514,741)
(584,881)
83,830
-----------
$(1,015,792)
============
$(1,005,634)
(10,158)
------------
$(1,015,792)
============
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, 2007, 2006 AND 2005:
SERIES 7
Limited
Partners
---------
General
Partners
--------
Total
-----
Balance at March 31, 2004
Net Loss
Balance at March 31, 2005
Net Loss
Balance at March 31, 2006
Net Loss
Balance at March 31, 2007
$1,290,808
(258,872)
-----------
1,031,936
(463,118)
-----------
568,818
(362,982)
-----------
$ 205,836
===========
$ (79,162)
(2,615)
-----------
(81,777)
(4,678)
-----------
(86,455)
(3,666)
-----------
$ (90,121)
===========
$1,211,646
(261,487)
-----------
950,159
(467,796)
-----------
482,363
(366,648)
-----------
$ 115,715
===========
STATEMENTS OF PARTNERS' EQUITY (deficit)
FOR THE YEARS ENDED MARCH 31, 2007, 2006 AND 2005:
SERIES 8
Limited
Partners
---------
General
Partners
--------
Total
-----
Balance at March 31, 2004
Net Loss
Balance at March 31, 2005
Net Loss
Balance at March 31, 2006
Net Loss
Balance at March 31, 2007
$ 635,468
(177,374)
-----------
458,094
(214,324)
-----------
243,770
(238,223)
-----------
$ 5,547
===========
$ (82,091)
(1,792)
----------
(83,883)
(2,165)
----------
(86,048)
(2,406)
----------
$ (88,454)
==========
$ 553,377
(179,166)
-----------
374,211
(216,489)
-----------
157,722
(240,629)
-----------
$ (82,907)
===========
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, 2007, 2006 AND 2005:
SERIES 9
Limited
Partners
---------
General
Partners
--------
Total
-----
Balance at March 31, 2004
Net Loss
Balance at March 31, 2005
Net Loss
Balance at March 31, 2006
Net Loss
Balance at March 31, 2007
$1,055,258
(232,498)
-----------
822,760
(337,671)
-----------
485,089
(245,647)
-----------
$ 239,442
===========
$ (44,731)
(2,348)
----------
(47,079)
(3,411)
----------
(50,490)
(2,481)
----------
$ (52,971)
==========
$1,010,527
(234,846)
-----------
775,681
(341,082)
-----------
434,599
(248,128)
----------
$ 186,471
===========
STATEMENTS OF PARTNERS' EQUITY (deficit)
FOR THE YEARS ENDED MARCH 31, 2007, 2006 AND 2005:
SERIES 10
Limited
Partners
---------
General
Partners
--------
Total
-----
Balance at March 31, 2004
Net Loss
Balance at March 31, 2005
Net Loss
Balance at March 31, 2006
Net Loss
Balance at March 31, 2007
$2,115,390
(184,463)
-----------
1,930,927
(352,373)
-----------
1,578,554
(259,095)
-----------
$1,319,459
===========
$ (23,258)
(1,863)
----------
(25,121)
(3,559)
----------
(28,680)
(2,617)
----------
$ (31,297)
==========
$2,092,132
(186,326)
-----------
1,905,806
(355,932)
-----------
1,549,874
(261,712)
-----------
$1,288,162
===========
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, 2007, 2006 AND 2005:
SERIES 11
Limited
Partners
---------
General
Partners
--------
Total
-----
Balance at March 31, 2004
Net Loss
Balance at March 31, 2005
Net Loss
Balance at March 31, 2006
Net Loss
Balance at March 31, 2007
$3,202,252
(152,427)
-----------
3,049,825
(768,404)
-----------
2,281,421
(466,007)
-----------
$1,815,414
===========
$ (14,109)
(1,540)
----------
(15,649)
(7,761)
----------
(23,410)
(4,707)
----------
$ (28,117)
==========
$3,188,143
(153,967)
-----------
3,034,176
(776,165)
-----------
2,258,011
(470,714)
-----------
$1,787,297
===========
STATEMENTS OF PARTNERS' EQUITY (deficit)
FOR THE YEARS ENDED MARCH 31, 2007, 2006 AND 2005:
TOTAL SERIES 7 - 11
Limited
Partners
---------
General
Partners
--------
Total
-----
Balance at March 31, 2004
Net Loss
Balance at March 31, 2005
Net Loss
Balance at March 31, 2006
Net Loss
Balance at March 31, 2007
$ 8,299,176
(1,005,634)
------------
7,293,542
(2,135,890)
------------
5,157,652
(1,571,954)
------------
$ 3,585,698
============
$(243,351)
(10,158)
----------
(253,509)
(21,574)
----------
(275,083)
(15,877)
----------
$(290,960)
==========
$8,055,825
(1,015,792)
-----------
7,040,033
(2,157,464)
-----------
4,882,569
(1,587,831)
-----------
$3,294,738
===========
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, 2007, 2006 AND 2005:
SERIES 7
--------
----
----
----
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Amortization
Impairment of Investment in Project Partnerships
Accreted Interest Income on Investments in Securities
Accreted Discount on Investments in Securities
Equity in Losses of Project Partnerships
Distributions Included in Other Income
Changes in Operating Assets and Liabilities:
Increase in Interest Receivable
Increase in Payable to General Partners
Net Cash Used in Operating Activities
Cash Flows from Investing Activities:
Distributions Received from Project Partnerships
Investment in Securities
Redemption of Investment in Securities
Net Cash (Used in) Provided by Investing Activities
(Decrease) Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year
$(366,648)
31,673
76,196
(10,656)
(813)
78,519
(27,050)
(3,126)
86,093
----------
(135,812)
----------
39,620
(199,820)
81,000
----------
(79,200)
----------
(215,012)
394,030
----------
$ 179,018
==========
$(467,796)
30,603
193,195
(15,333)
92,380
(21,470)
92,907
----------
(95,514)
----------
29,202
77,000
----------
106,202
----------
10,688
383,342
----------
$ 394,030
==========
$(261,487)
7,089
(19,255)
139,599
(23,983)
85,925
----------
(72,112)
----------
39,581
72,000
----------
111,581
----------
39,469
343,873
----------
$ 383,342
==========
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, 2007, 2006 AND 2005:
SERIES 8
--------
----
----
----
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Amortization
Impairment of Investment in Project Partnerships
Accreted Interest Income on Investments
in Securities
Accreted Discount on Investments in Securities
Equity in Losses of Project Partnerships
Distributions Included in Other Income
Changes in Operating Assets and Liabilities:
Increase in Interest Receivable
Increase in Payable to General Partners
Net Cash Used in Operating Activities
Cash Flows from Investing Activities:
Distributions Received from Project Partnerships
Investment in Securities
Redemption of Investment in Securities
Net Cash (Used In) Provided by Investing Activities
Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year
$(240,629)
12,823
(9,687)
(509)
15,683
(15,890)
(2,119)
89,156
----------
(151,172)
----------
24,995
(125,011)
77,000
----------
(23,016)
----------
(174,188)
309,318
----------
$ 135,130
==========
$(216,489)
12,823
(13,833)
29,928
(16,963)
96,162
----------
(108,372)
----------
20,029
71,999
----------
92,028
----------
(16,344)
325,662
----------
$ 309,318
==========
$(179,166)
2,553
(17,293)
41,395
(16,447)
29,589
----------
(139,369)
----------
24,132
67,000
----------
91,132
----------
(48,237)
373,899
----------
$ 325,662
==========
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, 2007, 2006 AND 2005:
SERIES 9
--------
----
----
----
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Amortization
Impairment of Investment in Project Partnerships
Accreted Interest Income on Investments in Securities
Accreted Discount on Investments in Securities
Equity in Losses of Project Partnerships
Distributions Included in Other Income
Changes in Operating Assets and Liabilities:
Increase in Interest Receivable
Decrease in Receivable - Other
Increase in Payable to General Partners
Net Cash Used in Operating Activities
Cash Flows from Investing Activities:
Distributions Received from Project Partnerships
Investment in Securities
Redemption of Investment in Securities
Net Cash (Used in) Provided by Investing Activities
Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year
$(248,128)
12,053
(7,423)
(509)
117,893
(6,166)
(2,119)
49,087
----------
(85,312)
----------
14,375
(125,011)
42,999
----------
(67,637)
----------
(152,949)
222,993
----------
$ 70,044
==========
$(341,082)
12,194
127,532
(9,410)
101,726
(4,437)
54,168
----------
(59,309)
----------
11,405
41,000
----------
52,405
----------
(6,904)
229,897
----------
$ 222,993
==========
$(234,846)
2,377
(11,133)
157,684
(7,752)
19,196
----------
(73,874)
----------
15,869
39,000
----------
54,869
----------
(19,005)
248,902
----------
$ 229,897
==========
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, 2007, 2006 AND 2005:
SERIES 10
--------
----
----
----
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Amortization
Impairment of Investment in Project Partnerships
Accreted Interest Income on Investments in Securities
Accreted Discount on Investments in Securities
Equity in Losses of Project Partnerships
Distributions Included in Other Income
Changes in Operating Assets and Liabilities:
Increase in Interest Receivable
Increase (Decrease) in Payable to General Partners
Net Cash Used in Operating Activities
Cash Flows from Investing Activities:
Distributions Received from Project Partnerships
Investment in Securities
Redemption of Investment in Securities
Net Cash (Used in) Provided by Investing Activities
Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year
$(261,712)
24,106
46,129
(8,256)
(405)
113,347
(2,563)
(1,686)
33,716
----------
(57,324)
----------
20,396
(99,418)
32,000
----------
(47,022)
----------
(104,346)
144,697
----------
$ 40,351
==========
$(355,932)
24,700
156,694
(9,816)
111,553
(2,561)
36,716
----------
(38,646)
----------
9,703
31,002
----------
40,705
----------
2,059
142,638
----------
$ 144,697
==========
$(186,326)
4,141
(11,128)
133,597
(2,511)
(91,179)
----------
(153,406)
----------
19,197
29,000
----------
48,197
----------
(105,209)
247,847
----------
$ 142,638
==========
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, 2007, 2006 AND 2005:
SERIES 11
--------
----
----
----
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Amortization
Impairment of Investment in Project Partnerships
Accreted Interest Income on Investments in Securities
Accreted Discount on Investments in Securities
Equity in Losses of Project Partnerships
Distributions Included in Other Income
Changes in Operating Assets and Liabilities:
Increase in Interest Receivable
Increase (Decrease) in Receivable - Other
Increase (Decrease) in Payable to General Partners
Net Cash Used in Operating Activities
Cash Flows from Investing Activities:
Distributions Received from Project Partnerships
Investment in Securities
Redemption of Investment in Securities
Net Cash (Used in) Provided by Investing Activities
Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year
$(470,714)
33,497
345,321
(10,253)
(609)
32,981
(3,382)
(2,538)
21,044
----------
(54,653)
----------
11,954
(149,619)
37,998
---------
(99,667)
---------
(154,320)
207,490
---------
$ 53,170
==========
$(776,165)
33,495
600,802
(12,070)
96,562
(3,382)
8,291
13,071
----------
(39,396)
----------
10,954
36,001
---------
46,955
---------
7,559
199,931
---------
$ 207,490
==========
$(153,967)
6,343
(13,595)
112,606
(2,783)
(8,291)
(40,486)
----------
(100,173)
----------
18,466
34,000
---------
52,466
---------
(47,707)
247,638
---------
$ 199,931
==========
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, 2007, 2006 AND 2005:
TOTAL SERIES 7 - 11
--------
----
----
----
Cash Flows from Operating Activities:
Net Loss
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Amortization
Impairment of Investment in Project Partnerships
Accreted Interest Income on Investments in Securities
Accreted Discount on Investments in Securities
Equity in Losses of Project Partnerships
Distributions Included in Other Income
Changes in Operating Assets and Liabilities:
Increase in Interest Receivable
Decrease (Increase) in Receivable - Other
Increase in Payable to General Partners
Net Cash Used in Operating Activities
Cash Flows from Investing Activities:
Distributions Received from Project Partnerships
Investment in Securities
Redemption of Investment in Securities
Net Cash (Used in) Provided by Investing Activities
Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year
$ (1,587,831)
114,152
467,646
(46,275)
(2,845)
358,423
(55,051)
(11,588)
279,096
-----------
(484,273)
-----------
111,340
(698,879)
270,997
-----------
(316,542)
-----------
(800,815)
1,278,528
-----------
$ 477,713
===========
$ (2,157,464)
113,815
1,078,223
(60,462)
432,149
(48,813)
8,291
293,024
-----------
(341,237)
-----------
81,293
257,002
-----------
338,295
-----------
(2,942)
1,281,470
-----------
$1,278,528
===========
$(1,015,792)
22,503
(72,404)
584,881
(53,476)
(7,691)
3,045
-----------
(538,934)
-----------
117,245
241,000
-----------
358,245
-----------
(180,689)
1,462,159
-----------
$1,281,470
===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND III LTD.
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2007, 2006 AND 2005
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 (the "Agreement"). As of March 31, 2007, 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.
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 Agreement.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounting
Gateway utilizes an accrual basis of accounting whereby revenues are recognized as earned and expenses are recognized as obligations are incurred.
Gateway accounts for its investments as the limited partner in Project Partnerships ("Investments in Project Partnerships"), using the equity method of accounting, 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.
For the fiscal year ended March 31, 2006, Gateway changed the period over which the intangible acquisition fees and expenses are amortized. In all prior years, the period in which such intangible assets had been amortized was 35 years. In the fiscal year ended March 31, 2006, this amortization period was changed to 15 years to better approximate the period over which the benefits of these investments are realized. As a result of this change in estimate, an additional amortization expense of $24,835 for Series 7, $10,553 for Series 8, $9,817 for Series 9, $19,964 for Series 10 and $27,587 for Series 11, or $92,756 for all Series of Gateway, was recognized during the year-ended March 31, 2006, as compared to the amortization expense amount which would have been realized had the estimated amortization period not changed during the year. 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. Any cash distributions received from Project Partnerships which have a zero investment balance are accounted for as distribution income in the period the cash distribution is received by Gateway.
Gateway reviews its investments in Project Partnerships to determine if there has been any permanent impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. If the sum of the expected future cash flows is less than the carrying amount of the investment, Gateway recognizes an impairment loss. For the fiscal year ended March 31, 2007, impairment expense was recognized in the Statement of Operations in the following Series and in the following amounts: Series 7 - $76,196, Series 10 - $46,129, Series 11 - $345,321. The total impairment expense for all Series in Gateway for fiscal year 2007 was $467,646. For the fiscal year ended March 31, 2006, impairment expense was recognized in the State of Operations in the following Series and in the following amounts: Series 7 - $193,195, Series 9 - $127,533, Series 10 - $156,694, Series 11 - $600,802. The total impairment expense for all Series in Gateway for fiscal year 2006 was $1,078,223. Refer to Note 5 - Investment in Project Partnerships for further details regarding the components of the Investment in Project Partnership balance.
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 for 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. However, Gateway does not guarantee any of the mortgages or other debt of the Project Partnerships. No such funding to Project Partnerships occurred during fiscal year 2007, 2006, or 2005.
Variable Interest Entities
In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN46"), "Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51" which was subsequently revised in December, 2003. Gateway has adopted FIN 46 and applied its requirements to all Project Partnerships in which Gateway holds an interest. Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics, (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group the holders of the equity investment at risk lack (i) the ability to make decisions about an entity's activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity's activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. FIN 46 requires a VIE to be consolidated in the financial statements of the entity that is determined to be the primary beneficiary of the VIE. The primary beneficiary, as is applicable to Gateway's circumstances, is the party in the Project Partnership equity group that is most closely associated with the Project Partnership.
Gateway holds variable interests in 128 VIEs, which consist of Project Partnerships, of which Gateway is not the primary beneficiary. Five of Gateways Project Partnership investments were determined not to be VIEs. Gateway's maximum exposure to loss as a result of its involvement with unconsolidated VIEs is limited to Gateway's recorded investments in and receivables from those VIEs, which is approximately $3,898,329 at March 31, 2007. Gateway may be subject to additional losses to the extent of any financial support that Gateway voluntarily provides to those Project Partnerships in the future.
Cash and Cash Equivalents
Gateway's policy is 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 whose investment advisor is a wholly-owned subsidiary of Raymond James Financial, Inc.
Investment in Securities
Gateway applies Statement of Financial Accounting Standards No. 115, Accounting for Certain Investments in Debt and Equity Securities ("FAS 115")(refer to Note 3 below). 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 which are comprised of U.S. Government Security Strips and U.S. Treasury Notes (collectively the "Gateway Securities"), until maturity and to use these investments to fund Gateway's ongoing operations. Interest income is recognized ratably on the Gateway Securities using the effective yield to maturity. The Gateway Securities are carried at amortized cost, which approximates market value, and are adjusted for amortization of premiums and accretion of discounts to maturity. Such adjustments are included in interest income.
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.
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.
NOTE 3 - INVESTMENT IN SECURITIES:
The March 31, 2007 Balance Sheet includes Gateway Securities at cost, plus accreted interest income or accreted discounts in the case of U.S. Treasury Notes, as applicable, of $57,413 for Series 7, $51,165 for Series 8, $50,807 for Series 9, $61,021 for Series 10 and $71,139 for Series 11. The Gateway Securities are commonly held in a brokerage account maintained at Raymond James and Associates, Inc., an affiliate of the General Partners. A separate accounting is maintained for each series' share of the investments
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.
Value Partners, Inc., an affiliate of Gateway, acquired the general partner interest in Logan Heights, one of the Project Partnerships in Series 8, in 2003.
For the periods ended March 31, 2007, 2006, and 2005 the General Partners and affiliates are entitled to compensation and reimbursement for costs and expenses incurred by Gateway as follows:
Asset Management Fee - The Managing General Partner is entitled to receive an annual asset management fee equal to the greater of (i) $2,000 for each limited partnership in which Gateway invests, or (ii) 0.275% of Gateway's gross proceeds from the sale of limited partnership interests. In either event (i) or (ii), the maximum amount may not exceed 0.2% of the aggregate cost (Gateway's capital contribution plus Gateway's share of the Properties' mortgage) of Gateway's interest in properties owned by the Project Partnerships. The asset management fee will be paid only after all other expenses of Gateway have been paid. These fees are included in the Statement of Operations.
----
----
----
Series 7
$ 85,926
$ 86,447
$ 86,447
Series 8
89,370
89,908
89,908
Series 9
49,242
49,509
49,509
Series 10
33,643
33,819
33,819
Series 11
27,989
---------
28,021
---------
28,021
---------
Total
$ 286,170
=========
$ 287,704
=========
$ 287,704
=========
General and Administrative Expenses - The Managing General Partner is reimbursed for general and administrative expenses of Gateway on an accountable basis. This expense is included in the Statement of Operations.
----
----
----
Series 7
$109,100
$ 84,526
$ 56,857
Series 8
120,278
93,195
62,689
Series 9
67,132
52,016
34,990
Series 10
41,958
32,510
21,868
Series 11
33,565
---------
26,008
---------
17,494
---------
Total
$372,033
=========
$288,255
=========
$193,898
=========
Total unpaid asset management fees and administrative expenses payable to the General Partners, which are included on the Balance Sheet as of March 31, 2007 and 2006 are as follows.
March 31, 2007
--------------
March 31, 2006
--------------
Series 7
$ 790,609
$ 704,516
Series 8
824,825
735,669
Series 9
507,802
458,715
Series 10
110,514
76,798
Series 11
34,115
-----------
13,071
-----------
Total
$2,267,865
===========
$1,988,769
===========
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:
SERIES 7
As of March 31, 2007, Gateway had acquired a 99% interest in the profits, losses and Tax Credits as a limited partner in 39 Project Partnerships which own and operate government assisted multi-family housing complexes. Cash flows from operations are allocated according to each Partnership agreement. Upon dissolution, proceeds will be distributed according to each Partnership agreement.
The following is a summary of Investments in the 39 Project Partnerships as of:
MARCH 31, 2007
--------------
MARCH 31, 2006
--------------
Capital Contributions to Project Partnerships and purchase price paid for limited partner interests in Project Partnerships
Cumulative equity in losses of Project Partnerships (1)
Cumulative distributions received from Project Partnerships
Investment in Project Partnerships before Adjustment
Excess of investment cost over the underlying assets acquired:
Acquisition fees and expenses
Accumulated amortization of acquisition fees and expenses
Impairment of Investment in Project Partnerships
Investments in Project Partnerships
$ 7,732,089
(7,303,018)
(254,317)
-----------
174,754
793,335
(255,911)
(269,391)
-----------
$ 442,787
============
$ 7,732,089
(7,224,499)
(241,747)
-----------
265,843
793,335
(224,238)
(193,195)
-----------
$ 641,745
============
(1) In accordance with Gateway's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $5,388,453 for the year ended March 31, 2007 and cumulative suspended losses of $4,825,178 for the year ended March 31, 2006 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
SERIES 8
As of March 31, 2007, Gateway had acquired a 99% interest in the profits, losses and Tax Credits as a limited partner in 43 Project Partnerships which own and operate government assisted multi-family housing complexes. Cash flows from operations are allocated according to each Partnership agreement. Upon dissolution, proceeds will be distributed according to each Partnership agreement.
The following is a summary of Investments in the 43 Project Partnerships as of:
MARCH 31, 2007
--------------
MARCH 31, 2006
--------------
Capital Contributions to Project Partnerships and purchase price paid for limited partner interests in Project Partnerships
Cumulative equity in losses of Project Partnerships (1)
Cumulative distributions received from Project Partnerships
Investment in Project Partnerships before Adjustment
Excess of investment cost over the underlying assets acquired:
Acquisition fees and expenses
Accumulated amortization of acquisition fees and expenses
Impairment of Investment in Project Partnerships
Investments in Project Partnerships
$ 7,586,105
(7,430,366)
(183,684)
-----------
(27,945)
549,773
(144,095)
-----------
$ 377,733
===========
$ 7,586,105
(7,414,683)
(174,579)
-----------
(3,157)
549,773
(131,272)
-----------
$ 415,344
===========
(1) In accordance with Gateway's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $6,190,831 for the year ended March 31, 2007 and cumulative suspended losses of $5,547,391 for the year ended March 31, 2006 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
SERIES 9
As of March 31, 2007, Gateway had acquired a 99% interest in the profits, losses and Tax Credits as a limited partner in 24 Project Partnerships which own and operate government assisted multi-family housing complexes. Cash flows from operations are allocated according to each Partnership agreement. Upon dissolution, proceeds will be distributed according to each Partnership agreement.
The following is a summary of Investments in the 24 Project Partnerships as of:
MARCH 31, 2007
--------------
MARCH 31, 2006
--------------
Capital Contributions to Project Partnerships and purchase price paid for limited partner interests in Project Partnerships
Cumulative equity in losses of Project Partnerships (1)
Cumulative distributions received from Project Partnerships
Investment in Project Partnerships before Adjustment
Excess of investment cost over the underlying assets acquired:
Acquisition fees and expenses
Accumulated amortization of acquisition fees and expenses
Impairment of Investment in Project Partnerships
Investments in Project Partnerships
$ 4,914,116
(4,377,991)
(156,970)
-----------
379,155
244,087
(83,423)
(127,532)
-----------
$ 412,287
===========
$ 4,914,116
(4,260,098)
(148,761)
-----------
505,257
244,087
(71,370)
(127,532)
-----------
$ 550,442
===========
(1) In accordance with Gateway's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $2,054,048 for the year ended March 31, 2007 and cumulative suspended losses of $1,792,373 for the year ended March 31, 2006 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
SERIES 10
As of March 31, 2007, Gateway had acquired a 99% interest in the profits, losses and Tax Credits as a limited partner in 15 Project Partnerships which own and operate government assisted multi-family housing complexes. Cash flows from operations are allocated according to each Partnership agreement. Upon dissolution, proceeds will be distributed according to each Partnership agreement.
The following is a summary of Investments in the 15 Project Partnerships as of:
MARCH 31, 2007
--------------
MARCH 31, 2006
--------------
Capital Contributions to Project Partnerships and purchase price paid for limited partner interests in Project Partnerships
Cumulative equity in losses of Project Partnerships (1)
Cumulative distributions received from Project Partnerships
Investment in Project Partnerships before Adjustment
Excess of investment cost over the underlying assets acquired:
Acquisition fees and expenses
Accumulated amortization of acquisition fees and expenses
Impairment of Investment in Project Partnerships
Investments in Project Partnerships
$ 3,914,672
(2,432,267)
(209,368)
-----------
1,273,037
196,738
(107,408)
(202,823)
-----------
$ 1,159,544
===========
$ 3,914,672
(2,318,920)
(191,535)
-----------
1,404,217
196,738
(83,302)
(156,694)
-----------
$ 1,360,959
===========
(1) In accordance with Gateway's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $421,709 for the year ended March 31, 2007 and cumulative suspended losses of $346,072 for the year ended March 31, 2006 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
SERIES 11
As of March 31, 2007, Gateway had acquired a 99% interest in the profits, losses and Tax Credits as a limited partner in 12 Project Partnerships which own and operate government assisted multi-family housing complexes. Cash flows from operations are allocated according to each Partnership agreement. Upon dissolution, proceeds will be distributed according to each Partnership agreement.
The following is a summary of Investments in the 12 Project Partnerships as of:
MARCH 31, 2007
--------------
MARCH 31, 2006
--------------
Capital Contributions to Project Partnerships and purchase price paid for limited partner interests in Project Partnerships
Cumulative equity in losses of Project Partnerships
Cumulative distributions received from Project Partnerships
Investment in Project Partnerships before Adjustment
Excess of investment cost over the underlying assets acquired:
Acquisition fees and expenses
Accumulated amortization of acquisition fees and expenses
Impairment of Investment in Project Partnerships
Investments in Project Partnerships
$ 4,128,042
(1,637,144)
(181,137)
-----------
2,309,761
290,335
(147,995)
(946,123)
-----------
$ 1,505,978
===========
$ 4,128,042
(1,604,163)
(172,565)
-----------
2,351,314
290,335
(114,498)
(600,802)
-----------
$ 1,926,349
===========
(1) In accordance with Gateway's accounting policy to not carry Investments in Project Partnerships below zero, cumulative suspended losses of $941,227 for the year ended March 31, 2007 and cumulative suspended losses of $546,725 for the year ended March 31, 2006 are not included.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
The following is a summary of Investments in Project Partnerships:
TOTAL SERIES 7 - 11
MARCH 31, 2007
--------------
MARCH 31, 2006
--------------
Capital Contributions to Project Partnerships and purchase price paid for limited partner interests in Project Partnerships
Cumulative equity in losses of Project Partnerships
Cumulative distributions received from Project Partnerships
Investment in Project Partnerships before Adjustment
Excess of investment cost over the underlying assets acquired:
Acquisition fees and expenses
Accumulated amortization of acquisition fees and expenses
Impairment of Investment in Project Partnerships
Investments in Project Partnerships
$28,275,024
(23,180,786)
(985,476)
-----------
4,108,762
2,074,268
(738,832)
(1,545,869)
-----------
$ 3,898,329
===========
$28,275,024
(22,822,363)
(929,187)
-----------
4,523,474
2,074,268
(624,680)
(1,078,223)
-----------
$ 4,894,839
===========
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with Gateway's policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series' Project Partnerships as of December 31 of each year:
(1) As of December 31, 2006, the largest Project Partnership constituted 4.9% and 5.3%, and as of December 31, 2005 the largest Project Partnership constituted 5.0% and 5.4% of the combined total assets by series and combined total revenues by series, respectively.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with Gateway's policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series' Project Partnerships as of December 31 of each year:
(1) As discussed in Note 4, an affiliate of the General Partner (Value Partners, Inc.) is the operating general partner in one of the Project Partnerships included above (Logan Heights). The Logan Heights Project Partnership is not consolidated in Gateway's financial statements as Gateway's investment in Logan Heights is accounted for under the equity method. The information below is included for related party disclosure purposes. The Project Partnership's financial information for the years ending December 2006 and December 2005 is as follows:
		 December 2006 		December 2005
Total Assets 		$ 527,248 		$ 583,925
Total Liabilities 		812,492 		826,484
Gateway Equity (Deficit) 		(168,563) 		(126,305)
Other Partner's Equity (Deficit) 		(116,681) 		(116,254)
Total Revenue 		105,272 		118,006
Net Income (Loss) 		$ (42,685) 		$ (2,359)
As of December 31, 2006, the largest Project Partnership constituted 5.1% and 5.6%, and as of December 31, 2005 the largest Project Partnership constituted 5.1% and 5.5% of the combined total assets by series and combined total revenues by series, respectively.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with Gateway's policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series' Project Partnerships as of December 31 of each year:
(1) As of December 31, 2006, the largest Project Partnership constituted 8.0% and 8.2%, and as of December 31, 2005 the largest Project Partnership constituted 7.9% and 8.3% of the combined total assets by series and combined total revenues by series, respectively.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with Gateway's policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series' Project Partnerships as of December 31 of each year:
(1) As of December 31, 2006, the largest Project Partnership constituted 11.6% and 12.6%, and as of December 31, 2005 the largest Project Partnership constituted 11.4% and 12.8% of the combined total assets by series and combined total revenues by series, respectively.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with Gateway's policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series' Project Partnerships as of December 31 of each year:
(1) As of December 31, 2006, the largest Project Partnership constituted 19.1% and 21.7%, and as of December 31, 2005 the largest Project Partnership constituted 19.7% and 19.8% of the combined total assets by series and combined total revenues by series, respectively.
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with Gateway's policy of presenting the financial information of the Project Partnerships on a three month lag, below is the summarized financial information for the Series' Project Partnerships as of December 31 of each year:
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
Gateway's equity by series as reflected by the Project Partnerships differs from Gateway's Investments in Project Partnerships before acquisition fees and expenses and amortization by series primarily because of suspended losses on Gateway's books.
Equity Per Project Partnership
-----------------
Equity Per
Gateway
-----------
Series 7
Series 8
Series 9
Series 10
Series 11
$(5,418,259)
(6,102,740)
(1,733,811)
843,845
1,375,171
$ 174,752
(27,944)
379,153
1,273,039
2,309,761
NOTE 6 - TAXABLE INCOME (LOSS):
The following is a reconciliation between Net Loss as described in the financial statements and Gateway's loss for tax purposes:
SERIES 7
----
----
----
Net Loss per Financial Statements
$(366,648)
$(467,796)
$(261,487)
Equity in Losses of Project Partnerships for tax purposes in excess of losses for financial statement purposes
(744,619)
(827,640)
(917,936)
Adjustments to convert March 31, fiscal year end to December 31, taxable year end
(139,599)
232,618
(17,690)
Items Expensed for Financial Statement purposes not expensed for Tax purposes:
Asset Management Fee
Amortization Expense
Impairment Expense
Other Adjustments
86,138
50,301
193,195
(22,042)
-----------
86,222
6,431
(24,185)
-----------
91,474
6,643
(5,914)
-----------
Gateway loss for tax purposes as of December 31
$ (943,274)
============
$ (994,350)
============
$(1,104,910)
============
December 31,
------------
December 31,
------------
December 31,
------------
Federal Low Income Housing Tax Credits (Unaudited)
$ 9,934
===========
$ 84,568
===========
$ 975,096
===========
The differences in the assets and liabilities of the Series for financial reporting purposes and tax reporting purposes for the year ended March 31, 2007 are as follows:
	Financial 	Tax
	Reporting 		Reporting
	Purposes	#9; 	Purposes 		Differences
Investments in Local
Limited Partnerships $ 442,787 $(6,984,364) $ 7,427,151
Other Assets $ 463,537 $ 1,673,746 $(1,210,209)
Liabilities $ 790,609 $ 12,861 $ 777,748
NOTE 6 - TAXABLE INCOME (LOSS)(Continued):
The following is a reconciliation between Net Loss as described in the financial statements and Gateway's loss for tax purposes:
SERIES 8
----
----
----
Net Loss per Financial Statements
$ (240,629)
$ (216,489)
$ (179,166)
Equity in Losses of Project Partnerships for tax purposes in excess of losses for financial statement purposes
(852,613)
(928,195)
(1,010,034)
Adjustments to convert March 31, fiscal year end to December 31, taxable year end
(8,485)
22,154
(8,575)
Items Expensed for Financial Statement purposes not expensed for Tax purposes:
Asset Management Fee
Amortization Expense
Other Adjustments
89,592
20,740
(13,876)
-----------
89,605
1,950
(14,323)
-----------
31,002
3,072
(8,025)
-----------
Gateway loss for tax purposes as of December 31
$(1,005,271)
============
$(1,045,298)
============
$(1,171,726)
============
December 31,
------------
December 31,
------------
December 31,
------------
Federal Low Income Housing Tax Credits (Unaudited)
$ 15,422
===========
$ 170,591
===========
$ 565,711
===========
The differences in the assets and liabilities of the Series for financial reporting purposes and tax reporting purposes for the year ended March 31, 2007 are as follows:
Financial Tax
Reporting Reporting
Purposes Purposes Differences
Investments in Local
Limited Partnerships $ 377,733 $(7,504,979) $ 7,882,712
Other Assets $ 364,185 $ 1,573,901 $(1,209,716)
Liabilities $ 824,825 $ 13,840 $ 810,985
NOTE 6 - TAXABLE INCOME (LOSS)(Continued):
The following is a reconciliation between Net Loss as described in the financial statements and Gateway's loss for tax purposes:
SERIES 9
----
----
----
Net Loss per Financial Statements
$ (248,128)
$ (341,082)
$ (234,846)
Equity in Losses of Project Partnerships for tax purposes in excess of losses for financial statement purposes
(417,301)
(389,575)
(420,083)
Adjustments to convert March 31, fiscal year end to December 31, taxable year end
(135,479)
148,091
(7,265)
Items Expensed for Financial Statement purposes not expensed for Tax purposes:
Asset Management Fee
Amortization Expense
Impairment Expense
Other Adjustments
49,353
19,451
127,532
(5,409)
-----------
49,357
1,846
(6,176)
-----------
16,737
3,082
(1,208)
-----------
Gateway loss for tax purposes as of December 31
$ (609,981)
============
$ (537,539)
============
$ (643,583)
============
December 31,
------------
December 31,
------------
December 31,
------------
Federal Low Income Housing Tax Credits (Unaudited)
$ 0
============
$ 40,080
============
$ 644,340
============
The differences in the assets and liabilities of the Series for financial reporting purposes and tax reporting purposes for the year ended March 31, 2007 are as follows:
Financial Tax
Reporting Reporting
Purposes Purposes Differences
Investments in Local
Limited Partnerships $ 412,287 $(3,009,879) $ 3,422,166
Other Assets $ 281,986 $ 1,042,892 $ (760,906)
Liabilities $ 507,802 $ 7,691 $ 500,111
NOTE 6 - TAXABLE INCOME (LOSS)(Continued):
The following is a reconciliation between Net Loss as described in the financial statements and Gateway's loss for tax purposes:
SERIES 10
----
----
----
Net Loss per Financial Statements
$ (261,712)
$ (355,932)
$ (186,326)
Equity in Losses of Project Partnerships for tax purposes in excess of losses for financial statement purposes
(262,403)
(285,809)
(259,879)
Adjustments to convert March 31, fiscal year end to December 31, taxable year end
(125,267)
181,059
(2,089)
Items Expensed for Financial Statement purposes not expensed for Tax purposes:
Asset Management Fee
Amortization Expense
Impairment Expense
Other Adjustments
33,713
39,206
156,694
(2,562)
-----------
33,768
4,281
(1,062)
-----------
(89,867)
4,578
(432)
-----------
Gateway loss for tax purposes as of December 31
$ (422,331)
============
$ (423,695)
============
$ (534,015)
============
December 31,
------------
December 31,
------------
December 31,
------------
Federal Low Income Housing Tax Credits (Unaudited)
$ 0
============
$ 48,806
============
$ 540,394
============
The differences in the assets and liabilities of the Series for financial reporting purposes and tax reporting purposes for the year ended March 31, 2007 are as follows:
Financial Tax
Reporting Reporting
Purposes Purposes Differences
Investments in Local
Limited Partnerships $ 1,159,544 $ (997,098) $ 2,156,642
Other Assets $ 239,132 $ 846,143 $ (607,011)
Liabilities $ 110,514 $ 5,209 $ 105,305
NOTE 6 - TAXABLE INCOME (LOSS)(Continued):
The following is a reconciliation between Net Loss as described in the financial statements and Gateway's loss for tax purposes:
SERIES 11
----
----
----
Net Loss per Financial Statements
$ (470,714)
$ (776,165)
$ (153,967)
Equity in Losses of Project Partnerships for tax purposes in excess of losses for financial statement purposes
(172,636)
(216,021)
(208,933)
Adjustments to convert March 31, fiscal year end to December 31, taxable year end
(276,160)
632,332
(3,760)
Items Expensed for Financial Statement purposes not expensed for Tax purposes:
Asset Management Fee
Amortization Expense
Impairment Expense
Other Adjustments
11,508
54,186
600,802
(3,382)
-----------
114,970
5,725
(2,785)
-----------
(131,503)
6,726
-----------
Gateway loss for tax purposes as of December 31
$ (256,396)
============
$ (241,944)
============
$ (490,452)
============
December 31,
------------
December 31,
------------
December 31,
------------
Federal Low Income Housing Tax Credits (Unaudited)
$ 43,946
============
$ 570,762
============
$ 754,678
============
The differences in the assets and liabilities of the Series for financial reporting purposes and tax reporting purposes for the year ended March 31, 2006 are as follows:
Financial Tax
Reporting Reporting
Purposes Purposes Differences
Investments in Local
Limited Partnerships $ 1,505,978 $ 1,282,528 $ 223,450
Other Assets $ 315,434 $ 777,448 $ (462,014)
Liabilities $ 34,115 $ 4,509 $ 29,606
NOTE 6 - TAXABLE INCOME (LOSS)(Continued):
The following is a reconciliation between Net Loss as described in the financial statements and Gateway's loss for tax purposes:
TOTAL SERIES 7 -11
----
----
----
Net Loss per Financial Statements
$ (1,587,831)
$ (2,157,464)
$(1,015,792)
Equity in Losses of Project Partnerships for tax purposes in excess of losses for financial statement purposes
(2,449,572)
(2,647,240)
(2,816,865)
Adjustments to convert March 31, fiscal year end to December 31, taxable year end
(684,990)
1,216,254
(39,379)
Items Expensed for Financial Statement purposes not expensed for Tax purposes:
Asset Management Fee
Amortization Expense
Impairment Expense
Other Adjustments
270,304
183,884
1,078,223
(47,271)
-----------
373,921
20,233
(48,531)
-----------
(82,157)
24,101
(14,594)
-----------
Gateway loss for tax purposes as of December 31
$(3,237,253)
============
$(3,242,827)
============
$(3,944,686)
============
The difference in the total value of Gateway's Investment in Project Partnerships is approximately $7,427,151 higher for Series 7, $7,882,712 higher for Series 8, $3,422,166 higher for Series 9, $2,156,642 higher for Series 10 and $223,450 higher for Series 11 for financial reporting purposes than for tax purposes because (i) there were depreciation differences between financial reporting purposes and tax return purposes and (ii) certain expenses are not deductible for tax return purposes.
The differences in the assets and liabilities of Gateway for financial reporting purposes and tax reporting purposes for the year ended March 31, 2007 are as follows:
Financial Tax
Reporting Reporting
Purposes Purposes Differences
Investments in Local
Limited Partnerships $ 3,898,329 $(17,213,791) $21,112,120
Other Assets $ 1,664,274 $ 5,914,130 $(4,249,856)
Liabilities $ 2,267,865 $ 44,110 $ 2,223,755
NOTE 7 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED):
Series 7
Year 2007 Quarter 1	 Quarter 2 Quarter 3 Quarter 4
6/30/2006 9/30/2006 12/31/2006 3/31/2007
Total Revenues $ 4,626 $ 11,320 $ 1,560 $ 9,544
Net Income (Loss) $ (54,316) $ (76,666) $ (59,253) $ (176,413)
Earnings (Loss) Per
Weighted Average
Limited Partnership
Units Outstanding $ (5.17) $ (7.30) $ (5.64) $ (16.81)
Series 8
Year 2007 Quarter 1 Quarter 2 Quarter 3 Quarter 4
6/30/2006 9/30/2006 12/31/2006 3/31/2007
Total Revenues $ 7,529 $ 800 $ 0 $ 7,561
Net Income (Loss) $ (34,116) $ (81,988) $ (73,632) $ (50,893)
Earnings (Loss) Per
Weighted Average
Limited Partnership
Units Outstanding $ (3.38) $ (8.13) $ (7.30) $ (5.06)
Series 9
Year 2007 Quarter 1 Quarter 2	 Quarter 3 Quarter 4
6/30/2006 9/30/2006 12/31/2006 3/31/2007
Total Revenues $ 4,809 $ 0 $ 0 $ 1,357
Net Income (Loss) $ (33,887) $ (76,479) $ (34,871) $ (102,891)
Earnings (Loss) Per
Weighted Average
Limited Partnership
Units Outstanding $ (5.36) $ (12.11) $ (5.52) $ (16.29)
NOTE 7 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)(Continued):
Series 10
Year 2007 Quarter 1 Quarter 2 Quarter 3 Quarter 4
6/30/2006 9/30/2006 12/31/2006 3/31/2007
Total Revenues $ 1,381 $ 0 $ 0 $ 1,182
Net Income (Loss) $ (29,540) $ (71,547) $ (32,580) $(128,045)
Earnings (Loss) Per
Weighted Average
Limited Partnership
Units Outstanding $ (5.80) $ (14.05) $ (6.40) $ (25.13)
Series 11
Year 2007 Quarter 1	 Quarter 2	 Quarter 3 Quarter 4
6/30/2006 9/30/2006 12/31/2006 3/31/2007
Total Revenues $ 0 $ 2,182 $ 600 $ 600
Net Income (Loss) $ (3,750) $ (43,444) $ (18,523) $(404,997)
Earnings (Loss) Per
Weighted Average
Limited Partnership
Units Outstanding $ (0.72) $ (8.39) $ (3.58) $ (78.20)
Series 7 - 11
Year 2007	 Quarter 1 Quarter 2 Quarter 3 Quarter 4
6/30/2006 9/30/2006 12/31/2006 3/31/2007
Total Revenues $ 18,345 $ 14,302 $ 2,160 $ 20,244
Net Income (Loss) $(155,609) $(350,124) $(218,859) $ (863,239)
NOTE 7 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Continued):
Series 7
Year 2006 Quarter 1	 Quarter 2 Quarter 3 Quarter 4
6/30/2005 9/30/2005 12/31/2005 3/31/2006
Total Revenues $ 10,434 $ 15,550 $ 10,586 $ 11,081
Net Income (Loss) $ (63,480) $ (54,304) $ (49,060) $(300,952)
Earnings (Loss) Per
Weighted Average
Limited Partnership
Units Outstanding $ (6.05) $ (5.17) $ (4.67) $ (28.66)
Series 8
Year 2006 Quarter 1 Quarter 2 Quarter 3 Quarter 4
6/30/2005 9/30/2005 12/31/2005 3/31/2006
Total Revenues $ 14,880 $ 5,808 $ 7,765 $ 11,321
Net Income (Loss) $ (29,217) $ (48,636) $ (39,117) $ (99,519)
Earnings (Loss) Per
Weighted Average
Limited Partnership
Units Outstanding $ (2.90) $ (4.82) $ (3.88) $ (9.87)
Series 9
Year 2006 Quarter 1 Quarter 2	 Quarter 3 Quarter 4
6/30/2005 9/30/2005 12/31/2005 3/31/2006
Total Revenues $ 6,693 $ 3,981 $ 4,867 $ 4,627
Net Income (Loss) $ (44,724) $ (50,604) $ (51,742) $ (194,012)
Earnings (Loss) Per
Weighted Average
Limited Partnership
Units Outstanding $ (7.08) $ (8.01) $ (8.19) $ (30.71)
NOTE 7 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)(Continued):
Series 10
Year 2006 Quarter 1 Quarter 2 Quarter 3 Quarter 4
6/30/2005 9/30/2005 12/31/2005 3/31/2006
Total Revenues $ 4,695 $ 3,580 $ 3,663 $ 4,445
Net Income (Loss) $ (34,070) $ (52,849) $ (42,389) $(226,624)
Earnings (Loss) Per
Weighted Average
Limited Partnership
Units Outstanding $ (6.69) $ (10.37) $ (8.32) $ (44.49)
Series 11
Year 2006 Quarter 1	 Quarter 2 	 Quarter 3 Quarter 4
6/30/2005 9/30/2005 12/31/2005 3/31/2006
Total Revenues $ 5,134 $ 5,698 $ 5,255 5,155
Net Income (Loss) $ (35,090) $ (45,980) $ (46,096) $ (648,999)
Earnings (Loss) Per
Weighted Average
Limited Partnership
Units Outstanding $ (6.78) $ (8.88) $ (8.90) $ (125.32)
Series 7 - 11
Year 2006	 Quarter 1 Quarter 2 Quarter 3 Quarter 4
6/30/2005 9/30/2005 12/31/2005 3/31/2006
Total Revenues $ 41,836 $ 34,617 $ 32,136 $ 36,629
Net Income (Loss) $(206,581) $(252,373) $(228,404) $(1,470,106)
Donald W. Causey & Associates, P.C.
516 Walnut Street-P.O. Box 775
Gadsden, AL 35902
PHONE: 256-543-3707
FAX: 256-543-9800
	 INDEPENDENT AUDITORS' REPORT
-------------------------------
To the Partners
Lakeshore II, Ltd.
Tuskegee, Alabama
We have audited the accompanying balance sheets of Lakeshore II, Ltd., a limited partnership, RHS Project No: 01-044-631056927 as of December 31, 2005 and 2004, and the related statements of operations, partners' capital and cash flows for the years then ended. 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 conducted the audits in accordance with standards generally accepted in the United States of America and Government Auditing Standards issued by the Comptroller General of the United States, the U.S. Department of Agriculture, Farmers Home Administration Audit Program, and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits 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 the audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lakeshore II, Ltd., RHS Project No: 01-044-631056927 as of December 31, 2005 and 2004, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.
The audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 11 through 14 is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplemental information presented in the Multiple Family Housing Borrower Balance Sheet (Form FmHA 1930-8) Parts I and II for the years ended December 31, 2005 and 2004, is presented for purposes of complying with the requirements of the Rural Housing Services and is also not a required part of the basic financial statements. Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report dated February 21, 2006 on our consideration of Lakeshore II, Ltd.'s, internal control over financial reporting and on our tests of its compliance with certain provisions of laws and regulations. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. However, the partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included only the consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership's internal control over financial reporting. Accordingly, we express no such opinion.
/s/ Donald W. Causey & Associates, P.C.
Certified Public Accountants
Gadsden, Alabama
February 21, 2006
Donald W. Causey & Associates, P.C.
516 Walnut Street-P.O. Box 775
Gadsden, AL 35902
PHONE: 256-543-3707
FAX: 256-543-9800
	 INDEPENDENT AUDITORS' REPORT
-----------------------------------
To the Partners
Skyview Apartments, Ltd.
Troy, Alabama
We have audited the accompanying balance sheets of Skyview Apartments, Ltd., a limited partnership, as of December 31, 2005 and 2004, and the related statements of operations, partners' capital and cash flows for the years then ended. 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 conducted the audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership's internal control over financial reporting. Accordingly, we express no such opinion. 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 the audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Skyview Apartments, Ltd., as of December 31, 2005 and 2004, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.
The audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 10 and 11 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Donald W. Causey & Associates, P.C.
Certified Public Accountants
Gadsden, Alabama
February 6, 2006
Donald W. Causey & Associates, P.C.
516 Walnut Street-P.O. Box 775
Gadsden, AL 35902
PHONE: 256-543-3707
FAX: 256-543-9800
INDEPENDENT AUDITORS' REPORT
--------------------------------
To the Partners
Meadowview Apartments, Ltd.
Greenville, Alabama
We have audited the accompanying balance sheets of Meadowview Apartments, Ltd., a limited partnership, as of December 31, 2005 and 2004, and the related statements of operations, partners' capital and cash flows for the years then ended. 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 conducted the audits in accordance with the auditing standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership's internal control over financial reporting. Accordingly, we express no such opinion. 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 the audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Meadowview Apartments, Ltd., a limited partnership, as of December 31, 2005 and 2004, and the results of its operations, changes in partners capital and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.
/s/ Donald W. Causey and Associates, P.C.
Certified Public Accountant
Gadsden, Alabama
February 23, 2006
Donald W. Causey & Associates, P.C.
516 Walnut Street-P.O. Box 775
Gadsden, AL 35902
PHONE: 256-543-3707
FAX: 256-543-9800
	 INDEPENDENT AUDITORS' REPORT
--------------------------------
To the Partners
Applegate Apartments, Ltd.
Florence, Alabama
We have audited the accompanying balance sheets of Applegate Apartments, Ltd., a limited partnership, as of December 31, 2005 and 2004, and the related statements of operations, partners' capital and cash flows for the years then ended. 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 conducted the audits in accordance with standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership's internal control over financial reporting. Accordingly, we express no such opinion. 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 the audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Applegate Apartments, Ltd., as of December 31, 2005 and 2004, and the results of its operations, changes in partners' capital and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.
The audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 10 and 11 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Donald W. Causey & Associates, P.C.
Certified Public Accountants
Gadsden, Alabama
February 20, 2006
Donald W. Causey & Associates, P.C.
516 Walnut Street-P.O. Box 775
Gadsden, AL 35902
PHONE: 256-543-3707
FAX: 256-543-9800
	INDEPENDENT AUDITORS' REPORT
	 -----------------------------------
To the Partners
Heatherwood Apartments, Ltd.
Alexander City, Alabama
We have audited the accompanying balance sheets of Heatherwood Apartments, Ltd., a limited partnership, as of December 31, 2005 and 2004, and the related statements of operations, partners' capital and cash flows for the years then ended. 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 conducted the audits in accordance with standards generally accepted in the United States of America and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership's internal control over financial reporting. Accordingly, we express no such opinion. 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 the audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Heatherwood Apartments, Ltd., as of December 31, 2005 and 2004, and the results of its operations, changes in partners' capital and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.
Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 9 and 10 is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Donald W. Causey & Associates, P.C.
Certified Public Accountants
Gadsden, Alabama
February 28, 2006
Item 9.
Item 9. Changes in and disagreements with Accountants on Accounting and Financial
Disclosures
None
Item 9A.
Item 9A. Controls and Procedures
Within 90 days prior to the filing of this report, under the supervision and with the participation of Gateway's management, including the chief executive and chief financial officers of Gateway's Managing General Partner, an evaluation of the effectiveness of the Gateway's disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities and Exchange Act of 1934) was performed. Based on this evaluation, such officers have concluded that Gateway's disclosure controls and procedures were effective as of the date of that evaluation in alerting them in a timely manner to material information relating to Gateway required to be included in this report and Gateway's other reports that it files or submits under the Securities Exchange Act of 1934. There were no significant changes in Gateway's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.
Item 9B.
Item 9B. Other Information
None.
PART III
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance
Gateway has no directors or executive officers. Gateway's affairs are managed and controlled by the Managing General Partner. Certain information concerning the directors and certain officers of the Managing General Partner are set forth below.
Raymond James Tax Credit Funds, Inc. - Managing General Partner
Raymond James Tax Credit Funds, Inc. is the Managing General Partner and is responsible for decisions pertaining to the acquisition and sale of Gateway's interests in the Project Partnerships and other matters related to the business operations of Gateway. Certain officers and the directors of the Managing General Partner are as follows:
Ronald M. Diner, age 63, is President and a Director. He is a Senior Vice President of Raymond James & Associates, Inc., with whom he has been employed since June 1983. Mr. Diner received an MBA degree from Columbia University (1968) and a BS degree from Trinity College (1966). Prior to joining Raymond James & Associates, Inc., he managed the broker-dealer activities of Pittway Real Estate, Inc., a real estate development firm. He was previously a loan officer at Marine Midland Realty Credit Corp., and spent three years with Common, Dann & Co., a New York regional investment firm. He has served as a member of the Board of Directors of the Council for Rural Housing and Development, a national organization of developers, managers and syndicators of properties developed under the RECD Section 515 program, and is a member of the Board of Directors of the Florida Council for Rural Housing and Development. Mr. Diner has been a speaker and panel member at state and national seminars relating to the low-income housing credit.
	J. Davenport Mosby III, age 51, is a Vice President and a Director. He is a Senior Managing Director of Raymond James & Associates, Inc. which he joined in 1982. Mr. Mosby received an MBA from the Harvard Business School (1982). He graduated magna cum laude with a BA from Vanderbilt University where he was elected to Phi Beta Kappa.
Raymond James Tax Credit Funds, Inc. is a wholly owned subsidiary of Raymond James Financial, Inc. ("RJF"). RJF has adopted a Business Ethics and Corporate Policy that is applicable to the officers and employees of Raymond James Tax Credit Funds, Inc., the Managing General Partner of the of Gateway. That policy is posted on RJF's Internet website at www.raymondjames.com www.raymondjames.com under "About Our Company" --- Investor Relations --- Corporate Governance --- Employee Code of Ethics.
Raymond James Partners, Inc. -
	 Raymond James Partners, Inc. was formed to act as the general partner, with affiliated corporations, in limited partnerships sponsored by Raymond James Financial, Inc.
	Information regarding the officers and directors of Raymond James Partners, Inc. is included on page 68 of the Prospectus under the section captioned "Management" (consisting of pages 66 through 69 of the Prospectus) which is incorporated herein by reference.
Item 11.
Item 11. Executive Compensation
	Gateway has no directors or officers.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
	Neither of the General Partners own any units of the outstanding securities of Gateway as of March 31, 2007. Ronald M. Diner, President of Raymond James Tax Credit Funds, Inc. owns 5 units of Series 7. None of the other directors and officers own any units of the outstanding securities of Gateway as of March 31, 2007.
	Gateway is a Limited Partnership and therefore does not have voting shares of stock. To the knowledge of Gateway, no person owns of record or beneficially, more than 5% of Gateway's outstanding units.
Item 13.
Item 13. Certain Relationships and Related Transactions and Director Independence
	Gateway has no officers or directors. However, under the terms of the public offering, various kinds of compensation and fees are payable to the General Partners and its affiliates during the organization and operations of Gateway. Additionally, the General Partners will receive distributions from Gateway if there is cash available for distribution or residual proceeds as defined in the Partnership Agreement. The amounts and kinds of compensation and fees are described on pages 24 to 26 of the Prospectus under the caption "Management Compensation", which is incorporated herein by reference.
	The Payable to General Partners primarily represents the asset management fees owed to the General Partners at the end of the year. 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.
	 For the years ended March 31, 2007, 2006, and 2005 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.
----
----
----
Series 7
$ 85,926
$ 86,447
$ 86,447
Series 8
89,370
89,908
89,908
Series 9
49,242
49,509
49,509
Series 10
33,643
33,819
33,819
Series 11
27,989
--------
28,021
--------
28,021
--------
Total
$286,170
========
$287,704
========
$287,704
========
General and Administrative Expenses - The Managing General Partner is reimbursed for general and administrative expenses of Gateway on an accountable basis. This expense is included in the Statement of Operations.
----
----
----
Series 7
$109,100
$ 84,526
$ 56,857
Series 8
120,278
93,195
62,689
Series 9
67,132
52,016
34,990
Series 10
41,958
32,510
21,868
Series 11
33,565
--------
26,008
--------
17,494
--------
Total
$372,033
========
$288,255
========
$193,898
========
Total unpaid asset management fees and administrative expenses payable to the General Partners, which are included on the Balance Sheet as of March 31, 2007 and 2006 are as follows:
March 31, 2007
--------------
March 31, 2006
--------------
Series 7
$ 790,609
$ 704,516
Series 8
824,825
735,669
Series 9
507,802
458,715
Series 10
110,514
76,798
Series 11
34,115
-----------
13,071
-----------
Total
$2,267,865
===========
$1,988,769
===========
Item 14.
Item 14. Principal Accounting Fees & Services
Audit Fees
The aggregate fees incurred by Gateway's principal accounting firm, Reznick Group, P.C., for professional services rendered for the audit of the annual financial statements and review of financial statements included in Gateway's quarterly report on Form 10-Q was $82,000 and $70,000 for the years ended March 31, 2007 and 2006, respectively. The aggregate fees incurred by Gateway's former principal accounting firm, Spence, Marston, Bunch, Morris and Co., totaled $2,000 for the year ended March 31, 2007 for services pertaining to prior years audit reports and $1,575 for the year ended March 31, 2006 for review of certain quarterly reports on Form 10-Q.
Tax Fees
During fiscal 2007 and 2006, Spence, Marston, Bunch, Morris & Co. was engaged to prepare Gateway's federal tax return, for which they billed $9,000 and $7,000 for years ended March 31, 2007 and 2006, respectively.
Other Fees
The two members of Raymond James Tax Credit Funds, Inc. Board of Directors, Ronald M. Diner and J. Davenport Mosby III also serve as the members of the Audit Committee on behalf of Gateway. The audit committee charter requires that the committee approve the engagement of the principal accounting firm prior to the rendering of any audit or non-audit services. During fiscal 2007, 100% of the audit related and other services and 100% of the tax services were pre-approved by the Audit Committee.
PART IV
Item 15.
Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K
a.(1) Financial Statements
(2) Financial Statement Schedules -
Schedule III - Real Estate and Accumulated Depreciation of Property Owned by Project Partnerships
Schedule IV - Mortgage loans on real estate
All other schedules are omitted because they are not applicable or not required, or because the required information is shown either in the financial statements or the notes thereto.
Exhibit Listing
Exhibit
Number Description
3.1 Amended Certificate of Limited Partnership of Gateway Tax Credit Fund III, Ltd. (Filed as an Exhibit to Registration Statement on Form S-11, File No. 33-44238,
and incorporated by reference.)
4.1 The Form of Partnership Agreement of the Partnership (included as Exhibit "A" to
the Prospectus, File No. 33-44238, and incorporated herein by reference.)
23 The consent of Reznick Group, P.C. (Filed herewith.)
23 The consent of Spence, Marston, Bunch, Morris & Co. (Filed herewith.)
31.1 Certification required by Rule 15d-14(a). (Filed herewith.)
31.2 Certification required by Rule 15d-14(a). (Filed herewith.)
32 Certification required by Rule 15d-14(b). (Filed herewith.)
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
SERIES 7
Apartment Properties
Partnership
-----------
Location
--------
# of Units
----------
Mortgage
Loan Balance
-------------
Nottingham
Cedar Hollow
Sunrise
Mountain City
Burbank
Washington
BrookStone
Tazewell
N. Irvine
Horton
Manchester
Waynesboro
Lakeland II
Mt. Vernon
Meadow Run
Spring Creek II
Warm Springs
Blue Ridge
Walnut
Pioneer
Dilley
Elsa
Clinch View
Jamestown
Leander
Louisa Sr.
Orchard Commons
Vardaman
Heritage Park
BrooksHollow
Cavalry Crossing
Carson City
Matteson
Pembroke
Robynwood
Atoka
Coalgate
Hill Creek
Cardinal
Pisgah, AL
Waterloo, NE
Mission, SD
Mountain City, TN
Falls City, NE
Bloomfield, NE
McCaysville, GA
New Tazewell, TN
Irvine, KY
Horton, KS
Manchester, GA
Waynesboro, GA
Lakeland, GA
Mt. Vernon, GA
Dawson, GA
Quitman, GA
Warm Springs, GA
Blue Ridge, GA
Elk Point, SD
Mountain View, AR
Dilley, TX
Elsa, TX
Gate City, VA
Jamestown, TN
Leander, TX
Louisa, KY
Crab Orchard, KY
Vardaman, MS
Paze, AZ
Jasper, GA
Ft. Scott, KS
Carson City, KS
Capa, KS
Pembroke, KY
Cynthiana, KY
Atoka, OK
Coalgate, OK
West Blocton, AL
Mountain Home. AR
$ 560,076
742,603
1,972,950
1,284,215
787,047
781,286
1,164,196
1,366,000
772,394
750,019
1,171,595
654,016
812,541
720,277
1,389,160
649,724
658,954
1,068,590
802,488
1,182,344
708,493
1,011,834
1,419,838
1,190,819
893,901
1,161,050
324,382
713,560
1,214,647
1,149,121
1,386,082
769,610
744,283
496,889
753,370
656,802
656,830
755,037
122,471
-----------
$35,419,494
============
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
SERIES 7
Apartment Properties
Partnership
-----------
Accumulated
Depreciation
------------
Depreciable
Life
-----------
Nottingham
Cedar Hollow
Sunrise
Mountain City
Burbank
Washington
BrookStone
Tazewell
N. Irvine
Horton
Manchester
Waynesboro
Lakeland II
Mt. Vernon
Meadow Run
Spring Creek II
Warm Springs
Blue Ridge
Walnut
Pioneer
Dilley
Elsa
Clinch View
Jamestown
Leander
Louisa Sr.
Orchard Commons
Vardaman
Heritage Park
BrooksHollow
Cavalry Crossing
Carson City
Matteson
Pembroke
Robynwood
Atoka
Coalgate
Hill Creek
Cardinal
$ 270,130
394,109
1,321,888
861,067
438,180
489,333
677,039
892,072
364,810
520,599
641,697
361,421
461,085
400,680
805,102
359,010
379,660
657,887
415,160
540,221
250,938
437,182
914,601
786,520
585,496
537,813
175,630
327,354
774,693
642,217
648,831
481,582
491,880
225,854
360,166
457,316
455,831
443,531
243,370
5.0-40.0
7.0-40.0
5.0-27.5
7.0-27.5
5.0-30.0
5.0-30.0
5.0-27.5
7.0-27.5
5.0-40.0
5.0-25.0
5.0-25.0
10.0-30.0
10.0-30.0
5.0-30.0
7.0-27.5
10.0-30.0
5.0-40.0
5.0-25.0
5.0-40.0
12.0-40.0
5.0-50.0
7.0-50.0
7.0-27.5
7.0-27.5
7.0-30.0
5.0-40.0
5.0-40.0
5.0-40.0
7.0-27.5
5.0-27.5
12.0-40.0
7.0-27.5
7.0-27.5
5.0-40.0
5.0-40.0
5.0-25.0
5.0-25.0
7.0-27.5
7.0-27.5
-----------
$20,491,955
===========
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
SERIES 8
Apartment Properties
Partnership
-----------
Location
--------
# of Units
----------
Mortgage
Loan Balance
------------
Purdy
Galena
Antlers 2
Holdenville
Wetumka
Mariners Cove
Mariners Cove Sr.
Antlers
Bentonville
Deerpoint
Aurora
Baxter
Arbor Gate
Timber Ridge
Concordia Sr.
Mountainburg
Lincoln
Fox Ridge
Meadow View
Sheridan
Morningside
Grand Isle
Meadowview
Taylor
Brookwood
Pleasant Valley
Reelfoot
River Rest
Kirskville
Cimmaron
Kenton
Lovingston
Pontotoc
So. Brenchley
Hustonville
Northpoint
Brooks Field
Brooks Lane
Brooks Point
Brooks Run
Logan Heights
Lakeshore 2
Cottondale
Purdy, MO
Galena, KS
Antlers, OK
Holdenville, OK
Wetumka, OK
Marine City, MI
Marine City, MI
Antlers, OK
Bentonville, AR
Elgin, AL
Aurora, MO
Baxter Springs, KS
Bridgeport, AL
Collinsville, AL
Concordia, KS
Mountainburg, AR
Pierre, SD
Russellville, AL
Bridgeiport, NE
Auburn, NE
Kenton, OH
Grand Isle, ME
Van Buren, AR
Taylor, TX
Gainesboro, TN
Lynchburg, TN
Ridgely, TN
Newport, TN
Kirksville, MO
Arco, ID
Kenton, OH
Lovingston, VA
Pontotoc, MS
Rexburg, ID
Hustonville, KY
Jackson, KY
Louisville, GA
Clayton, GA
Dahlonega, GA
Jasper, GA
Russellville, KY
Tuskegee, AL
Cottondale, FL
$ 447,676
593,776
616,872
701,799
636,354
1,011,809
783,641
1,064,675
494,073
720,188
709,806
415,221
734,292
717,301
665,173
692,444
870,356
725,397
577,409
592,600
950,629
921,238
730,311
1,213,020
1,425,697
1,073,463
635,847
1,121,140
668,339
808,345
1,396,888
2,169,188
1,078,641
1,209,736
507,633
875,282
934,286
1,079,764
1,339,529
742,886
766,265
1,129,681
748,598
-----------
$37,297,268
============
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
SERIES 8
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
SERIES 8
Apartment Properties
Partnership
-----------
Accumulated
Depreciation
------------
Depreciable
Life
-----------
Purdy
Galena
Antlers 2
Holdenville
Wetumka
Mariners Cove
Mariners Cove Sr.
Antlers
Bentonville
Deerpoint
Aurora
Baxter
Arbor Gate
Timber Ridge
Concordia Sr.
Mountainburg
Lincoln
Fox Ridge
Meadow View
Sheridan
Morningside
Grand Isle
Meadowview
Taylor
Brookwood
Pleasant Valley
Reelfoot
River Rest
Kirskville
Cimmaron
Kenton
Lovingston
Pontotoc
So. Brenchley
Hustonville
Northpoint
Brooks Field
Brooks Lane
Brooks Point
Brooks Run
Logan Heights
Lakeshore 2
Cottondale
$ 350,409
426,465
425,544
476,223
432,384
651,005
504,081
697,867
428,432
277,964
508,534
296,188
317,697
324,636
409,576
468,283
508,232
254,626
311,238
292,530
488,893
608,946
515,547
383,484
819,833
609,828
364,766
602,554
399,646
562,234
696,217
1,269,507
403,289
723,829
236,476
337,380
500,169
573,159
673,782
391,788
451,520
431,267
401,844
7.0-27.5
7.0-27.5
5.0-25.0
5.0-25.0
5.0-25.0
7.0-27.5
7.0-27.5
10.0-25.0
5.0-25.0
5.0-50.0
7.0-27.5
7.0-27.5
5.0-40.0
5.0-40.0
5.0-25.0
5.0-25.0
7.0-27.5
5.0-50.0
5.0-30.0
5.0-50.0
5.0-33.0
7.0-27.5
5.0-25.0
5.0-50.0
5.0-50.0
5.0-50.0
7.0-27.5
7.0-50.0
5.0-27.5
7.0-27.5
5.0-33.0
7.0-27.5
5.0-40.0
7.0-27.5
5.0-40.0
5.0-40.0
5.0-40.0
5.0-40.0
5.0-40.0
5.0-40.0
7.0-40.0
5.0-40.0
5.0-27.5
-----------
$20,807,872
===========
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
SERIES 9
Apartment Properties
Partnership
-----------
Location
--------
# of Units
----------
Mortgage
Loan Balance
-------------
Jay
Boxwood
Stilwell 3
Arbor Trace
Arbor Trace 2
Omega
Cornell 2
Elm Creek
Marionville
Lamar
Mt. Glen
Centreville
Skyview
Sycamore
Bradford
Cedar Lane
Stanton
Abernathy
Pembroke
Meadowview
Town Branch
Fox Run
Maple Street
Manchester
Jay, OK
Lexington, TX
Stilwell, OK
Lake Park, GA
Lake Park, GA
Omega, GA
Watertown, SD
Pierre, SD
Marionville, MO
Lamar, AR
Heppner, OR
Centreville, AL
Troy, AL
Coffeyville, KS
Cumberland, KY
London, KY
Stanton, KY
Abernathy, TX
Pembroke, KY
Greenville, AL
Mt. Vernon, KY
Ragland, AL
Emporium, PA
Manchester, GA
$ 636,124
599,487
452,220
724,419
1,426,495
1,109,650
901,665
932,993
549,556
695,889
805,078
771,843
1,109,790
1,384,512
773,985
710,457
783,343
604,708
780,566
643,045
751,302
757,241
1,336,359
578,133
-----------
$19,818,860
============
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
SCHEDULE III -REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
SERIES 9
Apartment Properties
Partnership
-----------
Accumulated
Depreciation
-------------
Depreciable
Life
-----------
Jay
Boxwood
Stilwell 3
Arbor Trace
Arbor Trace 2
Omega
Cornell 2
Elm Creek
Marionville
Lamar
Mt. Glen
Centreville
Skyview
Sycamore
Bradford
Cedar Lane
Stanton
Abernathy
Pembroke
Meadowview
Town Branch
Fox Run
Maple Street
Manchester
$ 406,257
404,090
300,479
354,553
705,962
575,953
581,210
550,951
382,516
465,735
529,118
485,066
412,146
578,323
341,524
352,495
349,776
399,050
339,223
335,285
317,583
422,518
528,207
297,314
5.0-25.0
5.0-25.0
5.0-25.0
10.0-30.0
10.0-30.0
5.0-50.0
5.0-30.0
5.0-27.5
7.0-27.5
5.0-25.0
7.0-27.5
5.0-40.0
5.0-40.0
12.0-40.0
5.0-40.0
5.0-40.0
5.0-40.0
5.0-25.0
7.0-40.0
5.0-40.0
7.0-40.0
7.0-27.5
7.0-40.0
5.0-27.5
-----------
$10,415,334
===========
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
SERIES 11
Apartment Properties
Partnership
-----------
Location
--------
# of Units
----------
Mortgage
Loan Balance
-------------
Homestead
Mountain Oak
Eloy
Gila Bend
Creekstone
Tifton
Cass Towne
Warsaw
Royston
Red Bud
Cardinal
Parsons
Pinetop, AZ
Collinsville, AL
Eloy, AZ
Gila Bend, AZ
Dallas, GA
Tifton, GA
Cartersville, GA
Warsaw, VA
Royston, GA
Mokane, MO
Mountain Home, AR
Parsons, KS
$ 1,280,603
661,436
635,583
1,626,636
631,737
779,837
2,595,203
728,009
234,051
79,900
1,071,808
------------
$10,324,803
============
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
GATEWAY TAX CREDIT FUND III LTD.
NOTES TO SCHEDULE III
SERIES 7
Balance at beginning of period - December 31, 2005
Additions during period:
Acquisitions through foreclosure
Other acquisitions
Improvements, etc.
Other
Deductions during period:
Cost of real estate sold
$ 205,292
---------
7,247
---------
$46,291,477
205,292
(7,247)
-----------
Balance at end of period - December 31, 2006
$46,489,522
============
Reconciliation of Accumulated Depreciation current year changes:
Balance at beginning of period - December 31, 2005
Current year expense
Less Accumulated Depreciation of real estate sold
$19,022,427
1,475,208
(5,679)
-----------
Balance at end of period - December 31, 2006
$20,491,956
============
SCHEDULE III -REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
NOTES TO SCHEDULE III
Series 8
Balance at beginning of period - December 31, 2005
Additions during period:
Acquisitions through foreclosure
Other acquisitions
Improvements, etc.
Other
Deductions during period:
Cost of real estate sold
Other
$ 232,677
-------
-------
$47,861,028
232,677
-----------
Balance at end of period - December 31, 2006
$48,093,705
============
Reconciliation of Accumulated Depreciation current year changes:
Balance at beginning of period - December 31, 2005
Current year expense
Less Accumulated Depreciation of real estate sold
Other
$19,218,334
1,514,499
75,039
-----------
Balance at end of period - December 31, 2006
$20,807,872
============
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
GATEWAY TAX CREDIT FUND III LTD.
NOTES TO SCHEDULE III
Series 9
Balance at beginning of period - December 31, 2005
Additions during period:
Acquisitions through foreclosure
Other acquisitions
Improvements, etc.
Other
Deductions during period:
Cost of real estate sold
Other
$ 105,668
--------
--------
$26,110,115
105,668
-----------
Balance at end of period - December 31, 2006
$26,215,783
============
Reconciliation of Accumulated Depreciation current year changes:
Balance at beginning of period - December 31, 2005
Current year expense
Less Accumulated Depreciation of real estate sold
Other
9,640,414
774,921
(1)
-----------
Balance at end of period - December 31, 2006
$10,415,334
============
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
NOTES TO SCHEDULE III
Series 10
Balance at beginning of period - December 31, 2005
Additions during period:
Acquisitions through foreclosure
Other acquisitions
Improvements, etc.
Other
Deductions during period:
Cost of real estate sold
Other
$ 86,168
--------
--------
$17,832,688
86,168
-----------
Balance at end of period - December 31, 2006
$17,918,856
============
Reconciliation of Accumulated Depreciation current year changes:
Balance at beginning of period - December 31, 2005
Current year expense
Less Accumulated Depreciation of real estate sold
Other
$ 5,569,061
465,794
(7,326)
-----------
Balance at end of period - December 31, 2006
$ 6,027,529
============
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY OWNED BY PROJECT PARTNERSHIPS INVESTED IN
AS OF DECEMBER 31, 2006
GATEWAY TAX CREDIT FUND III LTD.
NOTES TO SCHEDULE III
Series 11
Balance at beginning of period - December 31, 2005
Additions during period:
Acquisitions through foreclosure
Other acquisitions
Improvements, etc.
Other
Deductions during period:
Cost of real estate sold
Other
$ 208,302
--------
--------
$15,662,956
208,302
-----------
Balance at end of period - December 31, 2006
$15,871,258
===========
Reconciliation of Accumulated Depreciation current year changes:
Balance at beginning of period - December 31, 2005
Current year expense
Less Accumulated Depreciation of real estate sold
Other
$ 5,314,654
497,357
(249,285)
-----------
Balance at end of period - December 31, 2006
$ 5,562,726
===========
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
AS OF DECEMBER 31, 2006
SERIES 7
PARTNERSHIP
-----------
# OF
UNITS
-----
BALANCE
-------
INTEREST
RATE
--------
MONTHLY
DEBT
SERVICE
-------
TERM
(YEARS)
------
Nottingham
Cedar Hollow
Sunrise
Mountain City
Burbank
Washington
BrookStone
Tazewell
N. Irvine
Horton
Manchester
Waynesboro
Lakeland II
Mt. Vernon
Meadow Run
Spring Creek II
Warm Springs
Blue Ridge
Walnut
Pioneer
Dilley
Elsa
Clinch View
Jamestown
Leander
Louisa Sr.
Orchard Commons
Vardaman
Heritage Park
BrooksHollow
Cavalry Crossing
Carson City
Matteson
Pembroke
Robynwood
Atoka
Coalgate
Hill Creek
Cardinal
560,076
742,603
1,972,950
1,284,215
787,047
781,286
1,164,196
1,366,000
772,394
750,019
1,171,595
654,016
812,541
720,277
1,389,160
649,724
658,954
1,068,590
802,488
1,182,344
708,493
1,011,834
1,419,838
1,190,819
893,901
1,161,050
324,382
713,560
1,214,647
1,149,121
1,386,082
769,610
744,283
496,889
753,370
656,802
656,830
755,037
122,471
----------
7.75%
7.75%
7.25%
7.75%
8.25%
8.25%
6.50%
7.25%
7.75%
7.75%
6.50%
6.50%
7.25%
6.50%
6.50%
6.50%
7.25%
7.25%
7.75%
8.25%
8.25%
7.75%
8.75%
7.25%
7.75%
7.25%
7.75%
7.25%
7.75%
6.50%
7.75%
7.25%
7.25%
7.25%
7.25%
7.25%
7.25%
6.50%
6.50%
4,182
3,128
9,226
5,399
2,990
2,923
6,491
6,463
3,164
2,845
6,417
3,398
3,800
3,899
7,564
3,623
2,775
4,869
3,401
4,524
2,650
4,347
7,509
5,565
3,506
6,061
5,732
3,006
5,077
6,294
5,676
3,500
3,500
2,951
5,251
3,917
3,793
3,830
5,200
$35,419,494
===========
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
AS OF DECEMBER 31, 2006
SERIES 8
PARTNERSHIP
-----------
# OF
UNITS
-----
BALANCE
-------
INTEREST
RATE
--------
MONTHLY
DEBT
SERVICE
-------
TERM
(YEARS)
------
Purdy
Galena
Antlers 2
Holdenville
Wetumka
Mariners Cove
Mariners Cove Sr.
Antlers
Bentonville
Deerpoint
Aurora
Baxter
Arbor Gate
Timber Ridge
Concordia Sr.
Mountainburg
Lincoln
Fox Ridge
Meadow View
Sheridan
Morningside
Grand Isle
Meadowview
Taylor
Brookwood
Pleasant Valley
Reelfoot
River Rest
Kirskville
Cimmaron
Kenton
Lovingston
Pontotoc
So. Brenchley
Hustonville
Northpoint
Brooks Field
Brooks Lane
Brooks Point
Brooks Run
Logan Heights
Lakeshore 2
Cottondale
$ 447,676
593,776
616,872
701,799
636,354
1,011,809
783,641
1,064,675
494,073
720,188
709,806
415,221
734,292
717,301
665,173
692,444
870,356
725,397
577,409
592,600
950,629
921,238
730,311
1,213,020
1,425,697
1,073,463
635,847
1,121,140
668,339
808,345
1,396,888
2,169,188
1,078,641
1,209,736
507,633
875,282
934,286
1,079,764
1,339,529
742,886
766,265
1,129,681
748,598
----------
7.75%
7.25%
7.25%
6.50%
6.50%
7.25%
7.25%
7.25%
7.75%
7.75%
7.25%
6.50%
6.50%
7.25%
6.50%
6.50%
8.25%
7.25%
7.25%
8.25%
7.25%
8.25%
7.25%
7.50%
6.50%
7.25%
7.25%
7.25%
7.25%
10.75%
7.25%
7.00%
7.25%
7.25%
6.50%
7.25%
7.25%
7.25%
7.25%
7.25%
7.25%
7.75%
7.75%
2,285
2,776
4,085
4,330
4,314
4,600
3,500
4,619
14,430
6,238
3,236
2,720
4,099
3,446
3,350
3,824
3,351
3,398
2,683
3,211
4,331
8,875
7,575
6,644
7,860
4,893
3,892
4,791
2,591
4,428
6,044
10,920
4,490
5,200
3,187
4,112
4,004
4,297
4,833
2,975
3,072
4,147
2,711
$37,297,268
===========
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
AS OF DECEMBER 31, 2006
SERIES 9
PARTNERSHIP
-----------
# OF
UNITS
-----
BALANCE
-------
INTEREST
RATE
--------
MONTHLY
DEBT
SERVICE
-------
TERM
(YEARS)
------
Jay
Boxwood
Stilwell 3
Arbor Trace
Arbor Trace 2
Omega
Cornell 2
Elm Creek
Marionville
Lamar
Mt. Glen
Centreville
Skyview
Sycamore
Bradford
Cedar Lane
Stanton
Abernathy
Pembroke
Meadowview
Town Branch
Fox Run
Maple Street
Manchester
$ 636,124
599,487
452,220
724,419
1,426,495
1,109,650
901,665
932,993
549,556
695,889
805,078
771,843
1,109,790
1,384,512
773,985
710,457
783,343
604,708
780,566
643,045
751,302
757,241
1,336,359
578,133
----------
7.25%
6.50%
7.25%
7.25%
7.25%
7.25%
7.25%
7.25%
6.50%
7.25%
6.50%
7.25%
7.25%
7.25%
7.03%
6.50%
7.25%
6.50%
7.25%
0.50%
7.25%
6.50%
7.25%
7.25%
2,851
3,894
2,728
3,309
6,157
4,679
4,135
4,223
2,974
11,480
4,344
3,340
4,771
5,914
3,205
5,465
3,892
3,737
3,495
2,162
4,347
3,685
5,421
2,438
$19,818,860
===========
GATEWAY TAX CREDIT FUND III LTD.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
AS OF DECEMBER 31, 2006
SERIES 10
PARTNERSHIP
-----------
# OF
UNITS
-----
BALANCE
-------
INTEREST
RATE
--------
MONTHLY
DEBT
SERVICE
-------
TERM
(YEARS)
------
Redstone
Albany
Oak Terrace
Wellshill
Applegate
Heatherwood
Peachtree
Donna
Wellsville
Tecumseh
Clay City
Irvine West
New Castle
Stigler
Courtyard
$ 822,454
753,455
528,684
1,059,520
1,114,105
869,600
979,393
1,387,265
1,016,709
871,877
793,679
792,056
786,142
579,767
627,501
----------
6.50%
6.50%
6.50%
7.25%
0.50%
0.50%
7.25%
6.50%
6.50%
7.25%
7.25%
7.25%
7.25%
7.25%
6.50%
4,505
4,992
2,861
4,437
4,608
7,509
8,231
3,531
3,619
3,361
5,131
3,813
2,386
$12,982,207
===========
SERIES 11
PARTNERSHIP
-----------
# OF
UNITS
-----
BALANCE
-------
INTEREST
RATE
--------
MONTHLY
DEBT
SERVICE
-------
TERM
(YEARS)
------
Homestead
Mountain Oak
Eloy
Gila Bend
Creekstone
Tifton
Cass Towne
Warsaw
Royston
Red Bud
Cardinal
Parsons
$ 1,280,603
661,436
635,583
1,626,636
631,737
779,837
2,595,203
728,009
234,051
79,900
1,071,808
----------
6.50%
8.00%
6.00%
8.00%
11.00%
0.00%
3.00%
6.50%
6.75%
7.25%
6.50%
8.00%
6,408
4,666
2,109
3,070
56,427
24,929
17,000
12,984
3,009
3,392
3,943
$ 10,324,803
===========
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
GATEWAY TAX CREDIT FUND III, LTD.
(A Florida Limited Partnership)
By: Raymond James Tax Credit Funds, Inc.
Date: July 13, 2007 By:/s/ Ronald M. Diner
Ronald M. Diner
President, Director
Date: July 13, 2007 By:/s/ J. Davenport Mosby III
J. Davenport Mosby III
Director
Date: July 13, 2007 By:/s/ Jonathan Oorlog
Jonathan Oorlog
Vice President and Chief Financial Officer
Date: July 13, 2007 By:/s/ Sandra C. Humphreys
Sandra C. Humphreys
Secretary and Treasurer
EXHIBIT 31.1
CERTIFICATIONS*
I, Ron Diner, certify that:
1. I have reviewed this annual report on Form 10-K of Gateway Tax Credit Fund III, Ltd.;
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: July 13, 2007 By:/s/ Ronald M. Diner
Ronald M. Diner
President
Raymond James Tax Credit Funds, Inc.
(the Managing General Partner)
EXHIBIT 31.2
CERTIFICATIONS*
I, Jonathan Oorlog, certify that:
1. I have reviewed this annual report on Form 10-K of Gateway Tax Credit Fund III, Ltd.;
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: July 13, 2007 By:/s/ Jonathan Oorlog
Jonathan Oorlog
Vice President and Chief Financial Officer
Raymond James Tax Credit Funds, Inc.
(the Managing General Partner)
EXHIBIT 32
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
We, each hereby certify to the best of our knowledge that the Annual Report of Form 10-K of Gateway Tax Credit Fund III Ltd. for the year ended March 31, 2007 containing the financial statements fully complies with the requirements of Section 13(a) or 15(d)of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and that information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Ronald M. Diner
President
Raymond James Tax Credit Funds, Inc.
(the Managing General Partner)
July 13, 2007
/s/ Jonathan Oorlog
Vice President and Chief Financial Officer
Raymond James Tax Credit Funds, Inc.
(the Managing General Partner)
July 13, 2007