SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ----- EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2004
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ----- EXCHANGE ACT OF 1934
Commission File Number 0-24656
LIBERTY TAX CREDIT PLUS III L.P.
--------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3491408
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
- ---------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212)421-5333
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes No X
----- -----
PART I - Financial Information
Item 1. Financial Statements
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
============ ============
June 30, March 31,
2004 2004
------------ ------------
ASSETS
Property and equipment at cost,
net of accumulated depreciation
of $125,567,573 and $123,219,520,
respectively $161,622,254 $163,934,774
Cash and cash equivalents 3,463,797 3,656,322
Cash held in escrow 13,942,756 13,258,260
Deferred costs, net of accumulated
amortization of $2,210,133
and $2,172,729, respectively 2,633,071 2,670,475
Other assets 2,818,528 2,776,525
------------ ------------
Total assets $184,480,406 $186,296,356
============ ============
2
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
(continued)
============= =============
June 30, March 31,
2004 2004
------------- -------------
LIABILITIES AND PARTNERS' DEFICIT
Liabilities:
Mortgage notes payable $ 171,961,712 $ 172,456,295
Due to debt guarantor 50,752,317 49,958,612
Accounts payable and other
liabilities 25,392,188 24,044,416
Due to local general partners and
affiliates 11,299,449 11,682,238
Due to general partners and
affiliates 12,266,177 11,905,206
------------- -------------
Total liabilities 271,671,843 270,046,767
------------- -------------
Minority interest (1,766,647) (1,481,127)
------------- -------------
Commitments and contingencies
(Note 3)
Partners' deficit:
Limited partners (139,101.5 BACs
issued and outstanding) (83,335,085) (80,211,134)
General Partners (2,089,705) (2,058,150)
------------- -------------
Total partners' deficit (85,424,790) (82,269,284)
------------- -------------
Total liabilities and partners'
deficit $ 184,480,406 $ 186,296,356
============= =============
See accompanying notes to consolidated financial statements
3
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
================================
Three Months Ended
June 30,
--------------------------------
2004 2003
--------------------------------
Revenues
Rental income $ 8,308,477 $ 8,866,211
Other 338,444 366,497
------------ ------------
Total revenue 8,646,921 9,232,708
------------ ------------
Expenses
General and administrative 1,900,000 2,021,852
General and administrative-
related parties (Note 2) 882,235 912,913
Operating 1,101,780 1,153,524
Repairs and maintenance 1,280,219 1,396,952
Real estate taxes 543,781 558,174
Insurance 522,316 520,829
Interest 3,248,917 3,631,078
Depreciation and amortization 2,385,457 2,597,334
------------ ------------
Total expenses 11,864,705 12,792,656
------------ ------------
Loss before minority interest (3,217,784) (3,559,948)
Minority interest in losses of
subsidiary partnerships 62,278 63,464
------------ ------------
Net loss $ (3,155,506) $ (3,496,484)
============ ============
Net loss - limited partners $ (3,123,951) $ (3,461,519)
============ ============
Number of BACs outstanding 139,101.5 139,101.5
============ ============
Net loss per BAC $ (22.46) $ (24.89)
============ ============
See accompanying notes to consolidated financial statements.
4
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
Consolidated Statement of Changes in Partners' Deficit
(Unaudited)
================================================
Limited General
Total Partners Partners
------------------------------------------------
Partners' deficit -
April 1, 2004 $(82,269,284) $(80,211,134) $ (2,058,150)
Net loss - three
months ended
June 30, 2004 (3,155,506) (3,123,951) (31,555)
------------ ------------ ------------
Partners' deficit -
June 30, 2004 $(85,424,790) $(83,335,085) $ (2,089,705)
============ ============ ============
See accompanying notes to consolidated financial statements.
5
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
============================
Three Months Ended
June 30,
----------------------------
2004 2003
----------------------------
Cash flows from operating activities:
Net loss $(3,155,506) $(3,496,484)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation and amortization 2,385,457 2,597,334
Minority interest in loss of
subsidiaries (62,278) (63,464)
Increase in accounts
payable and other liabilities 1,347,772 853,796
Increase in cash held in escrow (673,034) (380,862)
Increase in other assets (42,003) (278,412)
Increase in due to general partners
and affiliates 360,971 512,155
Increase in due to local
general partners and affiliates 85,318 166,198
Decrease in due to local general
partners and affiliates (467,787) (488,144)
Increase in due to debt guarantor 793,705 778,818
----------- -----------
Net cash provided by operating
activities 572,615 200,935
----------- -----------
Cash flows from investing activities:
Acquisitions of property
and equipment (35,533) (32,255)
Increase in cash held in escrow (11,462) (106,432)
Increase in due to local general partners
and affiliates 2,118 106,927
----------- -----------
Net cash used in investing activities (44,877) (31,760)
----------- -----------
6
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(continued)
============================
Three Months Ended
June 30,
----------------------------
2004 2003
----------------------------
Cash flows from financing activities:
Principal payments of mortgage
notes payable (494,583) (497,224)
Decrease in due to local general
partners and affiliates (2,438) (12,817)
Decrease in capitalization of
consolidated subsidiaries
attributable to minority interest (223,242) (215,153)
----------- -----------
Net cash used in financing activities (720,263) (725,194)
----------- -----------
Net decrease in cash and
cash equivalents (192,525) (556,019)
Cash and cash equivalents at
beginning of period 3,656,322 5,098,740
----------- -----------
Cash and cash equivalents at
end of period $ 3,463,797 $ 4,542,721
=========== ===========
See accompanying notes to consolidated financial statements.
7
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2004
(Unaudited)
Note 1 - General
The consolidated financial statements for the three months ended June 30, 2004
and 2003 include the accounts of Liberty Tax Credit Plus III L.P. (the
"Partnership") and 60 and 61 subsidiary partnerships (the "subsidiary
partnerships", "Local Partnerships" or "subsidiaries"), respectively. The
Partnership holds a 98% limited partnership interest in each subsidiary
partnership except one subsidiary partnership, in which the Partnership holds a
27% limited partnership interest (the other 71% limited partnership interest is
owned by an affiliate of the Partnership with the same management). Through the
rights of the Partnership and/or an affiliate of Related Credit Properties III
L.P. and Liberty GP III Inc. (the "General Partners"), which affiliate has a
contractual obligation to act on behalf of the Partnership, to remove the
general partner of each subsidiary partnership (each a "Local General Partner")
and to approve certain major operating and financial decisions, the Partnership
has a controlling financial interest in the subsidiary partnerships. As of June
30, 2004, the Partnership has disposed of two of its sixty-two original
investments (See Note 4). In addition, the Partnership disposed of an additional
investment subsequent to June 30, 2004 (See Note 5).
For financial reporting purposes, the Partnership's fiscal quarter ends June 30.
All subsidiaries have fiscal quarters ending March 31. Accounts of the
subsidiaries have been adjusted for intercompany transactions from April 1
through June 30. The Partnership's fiscal quarter ends June 30 in order to allow
adequate time for the subsidiaries financial statements to be prepared and
consolidated.
All intercompany accounts and transactions have been eliminated in
consolidation.
Increases (decreases) in the capitalization of consolidated subsidiaries
attributable to minority interest arise from cash contributions from and cash
distributions to the minority interest partners.
Losses attributable to minority interests which exceed the minority interests'
investment in a subsidiary have been charged to the Partnership. Such losses
aggregated approximately $53,000 and $61,000 for the three months ended June 30,
2004 and 2003, respectively. The Partnership's investment in each subsidiary is
generally equal to the respective subsidiary partners' equity less minority
interest capital, if any. In consolidation, all subsidiary partnership losses
8
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2004
(Unaudited)
are included in the Partnership's capital account except for losses allocated to
minority interest capital.
The books and records of the Partnership are maintained on the accrual basis of
accounting in accordance with generally accepted accounting principles ("GAAP").
In the opinion of the General Partners of the Partnership, the accompanying
unaudited financial statements contain all adjustments (consisting only of
normal recurring adjustments) necessary to present fairly the financial position
of the Partnership as of June 30, 2004 and the results of operations and its
cash flows for the three months ended June 30, 2004 and 2003. However, the
operating results for the three months ended June 30, 2004 may not be indicative
of the results for the year.
Certain information and note disclosure normally included in financial
statements prepared in accordance with GAAP have been omitted or condensed.
These consolidated financial statements should be read in conjunction with the
financial statements and notes thereto included in the Partnership's Annual
Report on Form 10-K for the period ended March 31, 2004.
Note 2 - Related Party Transactions
Liberty Associates IV L.P. ("Liberty Associates"), an affiliate of the General
Partners, has a 1% and .998% interest as a special limited partner in 59 and 1
of the Local Partnerships, respectively. Affiliates of the General Partners also
have a minority interest in certain Local Partnerships.
9
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2004
(Unaudited)
The General Partners and their affiliates and the Local General Partners and
their affiliates perform services for the Partnership and the Local General
Partners, respectively. The costs incurred to related parties for the three
months ended June 30, 2004 and 2003 were as follows:
Three Months Ended
June 30,
-----------------------
2004 2003
-----------------------
Partnership management fees (a) $337,250 $354,000
Expense reimbursement (b) 54,680 56,061
Local administrative fee (d) 27,000 50,000
-------- --------
Total general and administrative-
General Partners 418,930 460,061
-------- --------
Property management fees incurred
to affiliates of the subsidiary
partnerships' general partners (c) 463,305 452,852
-------- --------
Total general and administrative-
related parties $882,235 $912,913
======== ========
(a) The General Partners are entitled to receive a partnership management fee
after payment of all Partnership expenses, which together with the annual local
administrative fees will not exceed a maximum of 0.5% per annum of invested
assets (as defined in the Partnership Agreement), for administering the affairs
of the Partnership. The partnership management fee, subject to the foregoing
limitation, will be determined by the General Partners in their sole discretion
based upon their review of the Partnership's investments. Unpaid partnership
management fees for any year will be accrued without interest and will be
payable only to the extent of available funds after the Partnership has made
distributions to the limited partners of sale or refinancing proceeds equal to
their original capital contributions plus a 10% priority return thereon (to the
extent not theretofore paid out of cash flow). Partnership management fees owed
to the General Partners amounting to approximately $10,147,000 and $9,810,000
were accrued and unpaid at June 30, 2004 and March 31, 2004, respectively.
Without the General Partners' continued accrual without payment of these fees
and expense reimbursements, the Partnership will not be in a position to meet
its obligations. The General Partners have allowed for the accrual without
payment of these amounts but are under no obligation to continue to do so.
10
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2004
(Unaudited)
(b) The Partnership reimburses the General Partners and their affiliates for
actual Partnership operating expenses incurred by the General Partners and their
affiliates on the Partnership's behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the General Partners performs asset monitoring for the Partnership.
These services include site visits and evaluations of the subsidiary
partnerships' performance.
(c) The subsidiary partnerships incurred property management fees amounting to
$621,250 and $599,692 for the three months ended June 30, 2004 and 2003,
respectively, of which $463,305 and $452,852 for the three months ended June 30,
2004 and 2003, respectively, were incurred to affiliates of the Local General
Partners. There were no property management fees incurred to affiliates of the
General Partners.
(d) Liberty Associates IV L.P., a special limited partner of the subsidiary
partnerships, is entitled to receive a local administrative fee of up to $2,500
per year from each subsidiary partnership.
Note 3 - Commitments and Contingencies
The following disclosures include changes and/or additions to disclosures
regarding the subsidiary partnerships which were included in the Partnership's
Annual Report on Form 10-K for the period ended March 31, 2004.
R.P.P. Limited Dividend Housing Association Limited Partnership ("River Place")
- -------------------------------------------------------------------------------
River Place has been unable to generate sufficient cash flow to make the
required principal and interest payments under its loan agreements. River
Place's debt guarantor, General Retirement System of the City of Detroit
("GRS"), entered into an agreement with the Michigan State Housing Authority
(the "Authority") to purchase these loans upon the occurrence of certain events.
GRS has declared River Place in default under its obligation to make the
required payments. During 1996, GRS agreed to waive its right of foreclosure
under the mortgages, unless certain events occur, through February 1, 2006. GRS
has made advances for debt service and has incurred certain fees relating to
these loans totaling $49,958,612, including accrued interest on such advances at
a rate of 15%. Such amount is included in the amount due to debt guarantor on
11
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2004
(Unaudited)
the balance sheet.
Management anticipates that River Place will be unable to make all of the
required debt service payments during 2004. However, there is no guarantee that
GRS, or any other persons, will continue to make these payments on behalf of
River Place.
Brandywine Court Associates, L.P. ("Brandywine")
- ------------------------------------------------
Brandywine has had recurring net losses and continues to have a substantial
working capital deficit. Furthermore, Brandywine's management continues to
anticipate that the property will need a new roof in the near future, the cost
of which is expected to exceed $150,000. Also, Brandywine's HAP Contract expires
in 2004 and there can be no assurance that it will be renewed. Brandywine's
management has determined that the Property is not eligible for financial relief
from the United States Department of Housing and Urban Development, since the
Property would require relief of debt in excess of the parameters allowed.
Brandywine's management continues to seek a buyer for the Property.
Gentle Pines - West Columbia Associates, L.P. ("Gentle Pines")
- --------------------------------------------------------------
Gentle Pines has had recurring net losses and continues to have a substantial
working capital deficit. A material number of apartment units are no longer
supported by project-based housing subsidies and the project-based HAP contract
for the remaining units expired on May 31, 2004. Management is seeking a
nonprofit organization with an affordable housing mission to acquire Gentle
Pines.
WPL Associates XXIII L.P. ("Benjamin's Corner")
- -----------------------------------------------
Benjamin's Corner was party to a lawsuit filed against the landlord and owner of
the ground on which the Property is located. The lawsuit sought declaratory
judgment that Benjamin's Corner can deduct debt service from "Net Cash Flow"
under terms of the ground leases and that Benjamin's Corner is not in default of
the leases and is entitled to exercise its purchase options. The landlord filed
a counter-claim seeking damages of back rent and interest totaling $843,884 plus
interest and late charges on the ground lease payments. In May 2004, Benjamin's
Corner reached a mediated settlement with the owner of the land. Terms of the
settlement require that by June 30, 2004, Benjamin's Corner will exercise its
option and purchase the two parcels of land for $669,586 plus it will pay
deferred ground lease and accrued interest of $1,238,590, for a total settlement
12
LIBERTY TAX CREDIT PLUS III L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2004
(Unaudited)
amount of $1,908,176. Subsequently, on July 15, 2004, the Partnership sold its
limited partnership interest in Benjamin's Corner (See Note 5).
Citrus Meadows Apartments, LTD. ("Citrus Meadows")
- --------------------------------------------------
Citrus Meadows incurred a net loss during the current period and has incurred a
Partner's deficit since inception. Current economic conditions have limited the
ability of Citrus Meadows in increasing tenant occupancy. In response to
economic conditions, management has implemented expense reduction and increased
advertising to attract new tenants. Also, nonessential capital expenditures have
either been eliminated or postponed. With interest rates being at record lows,
more people are purchasing housing instead of renting. In the interim, the local
general partner is funding the deficit. It is unclear whether Citrus Meadows
will be successful in accomplishing these objectives.
Jefferson Limited Partnership ("Jefferson")
- -------------------------------------------
At June 30, 2004, Jefferson's current liabilities exceeded its current assets by
over $117,000. However, approximately $67,000 of current liabilities at June 30,
2004 are to related parties which do not intend to pursue payment beyond
Jefferson's ability to pay.
Site H Development Co. ("Site H")
- ---------------------------------
The Partnership has not been provided with the Site H audited financial
statements for fiscal years 2003 and 2002 and as such has used estimates in its
Consolidated Financial Statements for both years.
Note 4 - Sale of Property
On June 26, 2003, the property and related assets and liabilities of Jefferson
Place L.P. ("Jefferson Place") were sold to an unaffiliated third party for
$13,650,000 resulting in a gain of approximately $13,943,000 which was
recognized in the September 30, 2003 10-Q.
Note 5 - Subsequent Event
On July 15, 2004, the Partnership's limited partnership interest in Benjamin's
Corner was sold to an unaffiliated third party purchaser for approximately
$765,000, resulting in a gain in the amount of approximately $2,400,000.
13
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
- -------------------------------
The Partnership's primary sources of funds include (i) working capital reserves
and (ii) cash distributions from the operations of the Local Partnerships,
neither of which are substantial in amount.
The Partnership has invested all of the net proceeds of its original offering in
62 Local Partnerships. Approximately $178,000 of the purchase price remains to
be paid (which includes approximately $160,000 held in escrow). As of June 30,
2004, the Partnership has sold its limited partnership interest in one Local
Partnership and the property and related assets and liabilities of another Local
Partnership. See Note 4 for discussion of Sale of Property. In addition, on July
15, 2004, the Partnership sold its limited partnership interest in another Local
Partnership. See Note 5 for discussion of Subsequent Event.
During the three months ended June 30, 2004, cash and cash equivalents of the
Partnership and its consolidated Local Partnerships decreased approximately
$193,000. This decrease was attributable to acquisitions of property and
equipment ($36,000), principal payments on mortgage notes payable ($495,000), an
increase in cash held in escrow relating to investing activities ($11,000) and a
decrease in capitalization of consolidated subsidiaries attributable to minority
interest ($223,000) which exceeded cash provided by operating activities
($573,000). Included in the adjustments to reconcile the net loss to cash
provided by operating activities are depreciation and amortization ($2,385,000)
and an increase in due to debt guarantor ($794,000).
The Partnership has a working capital reserve of approximately $335,000 at June
30, 2004.
Cash distributions received from the Local Partnerships remain relatively
immaterial. These distributions, as well as the working capital reserves
referred to in the preceding paragraph, will be used towards the future
operating expenses of the Partnership. During the three months ended June 30,
2004, the amounts received from operations of the Local Partnerships
approximated $6,000.
Partnership management fees owed to the General Partners amounting to
approximately $10,147,000 and $9,810,000 were accrued and unpaid at June 30,
2004 and March 31, 2004, respectively. Without the General Partners' continued
accrual without payment of these fees and expense reimbursements, the
Partnership will not be in a position to meet its obligations. The General
14
Partners have allowed for the accrual without payment of these amounts but are
under no obligation to continue to do so.
For a discussion of contingencies affecting certain Local Partnerships, see Note
3 to the financial statements. Since the maximum loss the Partnership would be
liable for is its net investment in the respective Local Partnerships, the
resolution of the existing contingencies is not anticipated to impact future
results of operations, liquidity or financial condition in a material way.
However, the Partnership's loss of its investment in a Local Partnership may
result in recapture of tax credits if the investment is lost prior to the end of
the fifteenth anniversary after the beginning of the tax credit period.
Management is not aware of any trends or events, commitments or uncertainties,
which have not otherwise been disclosed, that will or are likely to impact
liquidity in a material way. Management believes the only impact would be for
laws that have not yet been adopted. The portfolio is diversified by the
location of the properties around the United States so that if one area of the
country is experiencing downturns in the economy, the remaining properties in
the portfolio may be experiencing upswings. However, the geographic
diversification of the portfolio may not protect against a general downturn in
the national economy.
Critical Accounting Policies
- ----------------------------
In preparing the consolidated financial statements, management has made
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates. Set forth below is a summary of the accounting policies
that management believes are critical to the preparation of the consolidated
financial statements. The summary should be read in conjunction with the more
complete discussion of the Company's accounting policies included in Note 2 to
the consolidated financial statements which are include in the Partnership's
annual report on Form 10-K for the year ended March 31, 2004.
a) Property and Equipment
Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, and any other costs incurred
in acquiring the properties. The cost of property and equipment is depreciated
over their estimated useful lives using accelerated and straight-line methods.
Expenditures for repairs and maintenance are charged to expense as incurred;
major renewals and betterments are capitalized. At the time property and
equipment are retired or otherwise disposed of, the cost and accumulated
depreciation are eliminated from the assets and accumulated depreciation
accounts and the profit or loss on such disposition is reflected in earnings.
15
The Partnership complies with Statement of Financial Accounting Standards (SFAS)
No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets". A loss
on impairment of assets is recorded when management estimates amounts
recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value.
b) Income Taxes
No provision has been made for income taxes in the accompanying consolidated
financial statements since such taxes, if any, are the responsibility of the
individual partners. For income tax purposes, the Partnership has a fiscal year
ending December 31.
Results of Operations
- ---------------------
Results of operations for the three months ended June 30, 2004 and 2003
consisted primarily of the results of the Partnership's investment in the
consolidated Local Partnerships.
The results of the operations of the Partnership, as well as the Local
Partnerships remained fairly consistent during the three months ended June 30,
2004 as compared to the corresponding period in 2003, other than financial and
capital events with respect to Jefferson Place L.P., which sold its property and
related assets and liabilities (the "Sold Asset"). The majority of Local
Partnerships' income continues to be in the form of rental income with the
corresponding expenses being divided among operations, depreciation and mortgage
interest.
Rental income decreased approximately 6% for the three months ended June 30,
2004 as compared to the corresponding period in 2003, respectively. Excluding
the Sold Asset, rental income decreased approximately 1%.
Total expenses, excluding the Sold Asset and financial, remained fairly
consistent with a decrease of approximately 1% for the three months ended June
30, 2004 as compared to the corresponding period in 2003.
Financial decreased approximately $382,000 for the three months ended June 30,
2004 as compared to the corresponding period in 2003 primarily due to the Sold
Asset.
16
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
The Partnership does not have any market risk sensitive instruments.
Item 4. Controls and Procedures
(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Chief Executive
Officer and Chief Financial Officer of Related Credit Properties III Inc., the
general partner of Related Credit Properties III L.P. and of Liberty GP III
Inc., each of which is a general partner of the Partnership, has evaluated the
effectiveness of the Partnership's disclosure controls and procedures (as such
term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange
Act of 1934, as amended ("Exchange Act") as of the end of the period covered by
this report. Based on such evaluation, such officer has concluded that, as of
the end of such period, the Partnership's disclosure controls and procedures are
effective.
(B) INTERNAL CONTROL OVER FINANCIAL REPORTING. There have not been any changes
in Partnership's internal control over financial reporting during the fiscal
quarter to which this report relates that have materially affected, or are
reasonably likely to materially affect, the Partnership's internal control over
financial reporting.
17
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities and Use of Proceeds - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
31.1 Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a).
32.1 Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and
Section 1350 of Title 18 of the United States Code (18 U.S.C. 1350).
(b) Reports on Form 8-K - No reports on Form 8-K were filed during the
quarter.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
LIBERTY TAX CREDIT PLUS III L.P.
(Registrant)
By: RELATED CREDIT PROPERTIES III L.P.,
a General Partner
By: Related Credit Properties III Inc.,
its General Partner
Date: August 10, 2004
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes,
Director, President, Chief Executive Officer
and Chief Financial Officer
Date: August 10, 2004
By: /s/ Glenn F. Hopps
------------------
Glenn F. Hopps,
Treasurer
(Principal Accounting Officer)
By: LIBERTY GP III INC.,
a General Partner
Date: August 10, 2004
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes,
Director, President, Chief Executive Officer
and Chief Financial Officer
Date: August 10, 2004
By: /s/ Glenn F. Hopps
------------------
Glenn F. Hopps,
Treasurer
(Principal Accounting Officer)
Exhibit 31.1
CERTIFICATION PURSUANT TO RULE
13a-14(a) OR RULE 15d-14(a)
I, Alan P. Hirmes, Chief Executive Officer and Chief Financial Officer of
Related Credit Properties III Inc. the general partner of Related Credit
Properties III L.P. and of Liberty GP III Inc., each of which is a General
Partner of Liberty Tax Credit Plus III L.P. (the "Partnership"), hereby certify
that:
1) I have reviewed this quarterly report on Form 10-Q for the period
ending June 30, 2004 of the Partnership;
2) Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order 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 quarterly report;
3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Partnership as of, and for, the periods presented in
this quarterly report;
4) I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Partnership and I
have:
a) designed such disclosure controls and procedures or caused such
disclosure controls and procedures to be designed under my supervision,
to ensure that material information relating to the Partnership
including its consolidated subsidiaries, is made known to me by others
within those entities, particularly during the period in which this
quarterly report was being prepared;
b) designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under my
supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles; and
c) evaluated the effectiveness of the Partnership's disclosure controls
and procedures and presented in this report my conclusion about the
effectiveness of the disclosure controls and procedures as of the end
of the period covered by this quarterly report based on such
evaluation; and
d) disclosed in this quarterly report any change in the Partnership's
internal control over financial reporting that occurred during the
period ending June 30, 2004 that has materially affected, or is
reasonably likely to materially affect, the Partnership's internal
control over financial reporting; and
5) I have disclosed, based on my most recent evaluation of internal
control over financial reporting, to the Partnership's auditors and to
the boards of directors of the General Partners:
a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the Partnership's ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Partnership's
internal control over financial reporting.
Date: August 10, 2004
---------------
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Chief Executive Officer and
Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO
RULE 13a-14(b) OR RULE 15d-14(b) AND
SECTION 1350 OF TITLE 18 OF THE
UNITED STATES CODE (18 U.S.C. 1350)
In connection with the Quarterly Report of Liberty Tax Credit Plus III L.P. (the
"Partnership") on Form 10-Q for the period ending June 30, 2004 as filed with
the Securities and Exchange Commission ("SEC") on the date hereof (the
"Report"), I, Alan P. Hirmes, Chief Executive Officer and Chief Financial
Officer of Related Credit Properties III Inc., the General Partner of Related
Credit Properties III, L.P. and of Liberty GP III Inc., each of which is a
general partner of the Partnership, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
A signed original of this written statement required by Section 906 has been
provided to the Partnership and will be retained by the Partnership and
furnished to the SEC or its staff upon request.
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Chief Executive Officer and
Chief Financial Officer
August 10, 2004