FORM 10-KSB- ANNUAL OR TRANSITIONAL REPORT
UNDER SECTION 13 OR 15(D)
U.S. SECURITIES AND EXCHANGE COMMISSION
FORM 10-KSB/A
(Mark One)
[x] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-9567
NATIONAL PROPERTY INVESTORS III
(Name of small business issuer in its charter)
California 13-2974428
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Limited Partnership Units
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of Registrant's knowledge in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. X
State issuer's revenues for its most recent fiscal year. $7,953,000
State the aggregate market value of the voting stock held by nonaffiliates of
the Registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within the past 60 days. Market value information
for Registrant's Partnership Interests is not available. Should a trading market
develop for these Interests, it is management's belief that such trading would
not exceed $25 million.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
PART II
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(This document amends the Form 10-KSB for the fiscal year ended December
31, 1996, due to an accounting change related to the rental of a laundry room
facility which occurred during the fiscal year ended December 31, 1995 for
$110,000. The laundry contract began on January 1, 1995, and terminates on
December 31, 2005. The contract amount will be recognized on a straight-line
basis as rental income over the term of the contract.)
This item should be read in conjunction with the financial statements and
other items contained elsewhere in this report.
Results of Operations
The Partnership's net income for the year ended December 31, 1996, was
approximately $25,000 versus net income of approximately $145,000 for the year
ended December 31, 1995. This change in net income for the year ended December
31, 1996, is primarily attributable to the recognition of an extraordinary loss
due to the early extinguishment of debt and an increase in operating expenses.
The Partnership recognized an extraordinary loss on the early extinguishment of
debt in 1996 as discussed below. This refinancing also resulted in a decrease
in interest expense for the year ended December 31, 1996, due to the mortgage
being refinanced at a lower interest rate. The increase in operating expense is
due primarily to an increase in real estate tax expense at Lakeside. This
increase is due to the increase in the property's assessed value by the taxing
authority.
Included in operating expense is approximately $152,000 of major repairs
and maintenance comprised primarily of major landscaping and interior and
exterior building repairs.
As part of the ongoing business plan of the Partnership, the Managing
General Partner monitors the rental market environment of its investment
properties to assess the feasibility of increasing rents, maintaining or
increasing occupancy levels and protecting the Partnership from increases in
expenses. As part of this plan, the Managing General Partner attempts to protect
the Partnership from the burden of inflation-related increases in expenses by
increasing rents and maintaining a high overall occupancy level. However, due
to changing market conditions, which can result in the use of rental concessions
and rental reductions to offset softening market conditions, there is no
guarantee that the Managing General Partner will be able to sustain such a plan.
Capital Resources and Liquidity
At December 31, 1996, the Partnership had unrestricted cash of
approximately $964,000 as compared to approximately $921,000 at December 31,
1995. Net cash provided by operations decreased primarily due to a decrease in
operations and other assets. This decrease was partially offset by an increase
in escrow deposits and an increase in accounts payable and accrued expenses due
to the timing of payments. Net cash used in investing activities increased due
to an increase in property improvements and replacements. The increase was also
due to funds deposited to a restricted escrow account as required by the terms
of the Lakeside refinancing. Finally, there was an increase in the net cash
used in financing activities due to the refinancing of Lakeside Apartments with
a new $17,200,000 mortgage, replacing the prior mortgage of $16,943,000. This
increase is also due to the Partnership incurring approximately $417,000 in new
loan costs.
The Managing General Partner has extended to the Partnership a $500,000 line
of credit. At the present time, the Partnership has no outstanding amounts due
under this line of credit. Based on present plans, the Managing General Partner
does not anticipate the need to borrow in the near future. Other than cash and
cash equivalents, the line of credit is the Partnership's only unused source of
liquidity.
On November 15, 1996, the Partnership refinanced the mortgage encumbering
Lakeside Apartments. The refinancing replaced indebtedness of $17,042,000,
including accrued interest of approximately $99,000, with a new mortgage in the
amount of $17,200,000. The mortgage was refinanced at a rate equal to 7.33%,
compared to the prior rate of 8.25%. Payments of interest only are due on the
first day of each month until the loan matures on November 1, 2003. The prior
note was scheduled to mature in August, 1999. Total capitalized loan costs were
$417,000. The Partnership recognized an extraordinary loss on early
extinguishment of debt in the amount of approximately $75,000 due to the write
off of unamortized loan costs.
The Partnership had a balloon payment of approximately $4,582,000 on
Summerwalk Apartments due in December 1996. While the loan has not been
formally extended, the Partnership continues to pay debt service to the lender
while an extension of the loan or alternative financing is arranged. However,
if replacement financing is not found or if the current financing is not
extended, it is possible that the Partnership could sell the property or lose
the property through foreclosure. If the property is lost through foreclosure,
the Partnership would not recognize a loss for financial statement purposes. In
connection with the efforts to obtain replacement financing, the Partnership
acquired the 10% interest in the property previously held by an unaffiliated
third party for $50,000 in January, 1997.
The sufficiency of existing liquid assets to meet future liquidity and
capital expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and the other operating needs of the Partnership. Such assets are
currently thought to be sufficient for any near-term needs of the Partnership.
The mortgage indebtedness of approximately $23,998,000 is being amortized over
varying periods with balloon payments due at maturity at which time the
properties will either be refinanced or sold. The Partnership secured long term
financing for Lakeside Apartments during the fourth quarter of 1996, as
discussed above, and extended the current financing on Summerwalk Apartments.
The Managing General Partner is currently negotiating for long-term financing on
Summerwalk. These negotiations should be completed during the first quarter of
1997. Future cash distributions will depend on the levels of cash generated
from operations, a property sale, a property refinancing and the availability of
cash reserves. No cash distributions were paid during the year ended December
31, 1996, or December 31, 1995.
ITEM 7. FINANCIAL STATEMENTS
(This document amends the Form 10-KSB for the fiscal year ended December 31,
1996, due to an accounting change related to the rental of a laundry room
facility which occurred during the fiscal year ended December 31, 1995 for
$110,000. The laundry contract began on January 1, 1995, and terminates on
December 31, 2005. The contract amount will be recognized on a straight-line
basis as rental income over the term of the contract.)
NATIONAL PROPERTY INVESTORS III
LIST OF CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditors' Report
Consolidated Balance Sheet - December 31, 1996
Consolidated Statements of Operations - Years ended December 31, 1996 and
1995
Consolidated Statements of Changes in Partners' Deficit - Years ended
December 31, 1996 and 1995
Consolidated Statements of Cash Flows - Years ended December 31, 1996 and
1995
Notes to Consolidated Financial Statements
Independent Auditors' Report
To The Partners
National Property Investors III
Greenville, South Carolina
We have audited the accompanying consolidated balance sheet of National Property
Investors III, (a limited partnership) (the "Partnership") and its subsidiary as
of December 31, 1996, and the related consolidated statements of operations,
changes in partners' deficit and cash flows for each of the two years in the
period ended December 31, 1996. These consolidated financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
National Property Investors III and its subsidiary, as of December 31, 1996, and
the results of their operations and their cash flows for each of the two years
in the period ended December 31, 1996, in conformity with generally accepted
accounting principles.
/s/Imowitz Koenig & Co., LLP
New York, New York
February 6, 1997
NATIONAL PROPERTY INVESTORS III
CONSOLIDATED BALANCE SHEET
(in thousands, except unit data)
December 31, 1996
Assets
Cash and cash equivalents $ 964
Escrow deposits 127
Other assets 1,293
Investment properties:
Land $ 3,023
Buildings and related personal property 31,232
34,255
Less accumulated depreciation (22,224) 12,031
$ 14,415
Liabilities and Partners' Deficit
Liabilities
Accounts payable and accrued expenses $ 1,184
Tenants' security deposits payable 171
Mortgages payable 23,998
Partners' Deficit:
Limited partners' (48,049 units issued
and outstanding) $ (10,649)
General partner's (289) (10,938)
$ 14,415
See Accompanying Notes to Consolidated Financial Statements
NATIONAL PROPERTY INVESTORS III
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
Years Ended December 31,
1996 1995
Revenues:
Rental income $ 7,617 $ 7,531
Other income 336 318
Total revenues 7,953 7,849
Expenses:
Operating expenses 4,215 4,014
Interest 2,113 2,178
Depreciation 1,288 1,289
General and administrative 237 223
Total expenses 7,853 7,704
Income before extraordinary item 100 145
Extraordinary loss on extinguishment of debt (75) --
Net income $ 25 $ 145
Net income allocated to general partner $ -- $ 1
Net income allocated to limited partners 25 144
$ 25 $ 145
Net income per limited partnership unit:
Income before extraordinary item $ 2.07 $ 3.00
Extraordinary loss (1.55) --
Net income $ .52 $ 3.00
See Accompanying Notes to Consolidated Financial Statements
NATIONAL PROPERTY INVESTORS III
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited General Limited
Partnership Partner's Partners' Total
Units Deficit Deficit Deficit
<S> <C> <C> <C> <C>
Original capital contributions 48,049 $ 1 $ 24,025 $ 24,026
Partners' deficit at
December 31, 1994 48,049 $ (290) $ (10,818) $ (11,108)
Net income for the year ended
December 31, 1995 -- 1 144 145
Partners' deficit at
December 31, 1995 48,049 (289) (10,674) (10,963)
Net income for the year ended
December 31, 1996 -- -- 25 25
Partners' deficit at
December 31, 1996 48,049 $ (289) $ (10,649) $ (10,938)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
NATIONAL PROPERTY INVESTORS III
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Years ended December 31,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 25 $ 145
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 1,288 1,289
Amortization of mortgage costs 51 54
Extraordinary loss on extinguishment of debt 75 --
Change in accounts:
Escrow deposits 163 (92)
Other assets (265) 210
Accounts payable and accrued expenses 367 89
Tenant security deposit payable (42) 14
Net cash provided by operating activities 1,662 1,709
Cash flows from investing activities:
Deposits to restricted escrows (574) (280)
Receipts from restricted escrows 341 143
Property improvements and replacements (806) (368)
Net cash used in investing activities (1,039) (505)
Cash flows from financing activities:
Mortgage principal payments (420) (488)
Repayment of mortgage note payable (16,943) --
Proceeds from refinancing 17,200 --
Loan costs (417) --
Net cash used in financing activities (580) (488)
Net increase in cash and cash equivalents 43 716
Cash and cash equivalents at beginning of period 921 205
Cash and cash equivalents at end of period $ 964 $ 921
Supplemental information:
Cash paid for interest $ 2,081 $ 2,124
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
NATIONAL PROPERTY INVESTORS III
Notes to Consolidated Financial Statements
December 31, 1996
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization:
National Property Investors III (the "Partnership"), a limited partnership,
was organized under the Uniform Limited Partnership Laws of California as of
February 1, 1979, for the purpose of acquiring and operating income-producing
residential real estate. The Partnership currently owns garden apartments in
Charlotte, North Carolina, Lisle Illinois and Winter Park, Florida. The
Partnership will terminate on December 31, 2005, or sooner, in accordance with
the terms of the Agreement of Limited Partnership. Limited partners' units are
at a stated value of $500. A total of 48,049 units of the limited partnership
were issued, for an aggregate capital contribution of $24,025,000. In addition,
the general partners contributed a total of $1,000 to the Partnership.
Principles of Consolidation:
The consolidated financial statements include all the accounts of the
Partnership and its majority owned Partnerships. All significant
interpartnership balances have been eliminated. Minority interest is immaterial
and not shown separately in the financial statements.
Cash and Cash Equivalents:
The Partnership considers all highly liquid investments with a maturity,
when purchased, of three months or less to be cash equivalents. At certain
times, the amount of cash deposited at a bank may exceed the limit on insured
deposits.
Investment Properties:
In 1995 the Partnership adopted Statement of Financial Accounting
Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," which requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amount. The impairment loss is
measured by comparing the fair value of the asset to its carrying amount. The
effect of adoption was not material.
Depreciation:
Depreciation is calculated by the straight-line method over the estimated
lives of the rental properties and related personal property ranging from 5 to
27.5 years.
Leases:
The Partnership generally leases apartment units for twelve-month terms or
less. The Partnership recognizes income as earned on its leases.
Tenant Security Deposits:
The Partnership requires security deposits for the apartment units.
Deposits can be applied to the rent or any cleaning and damage charges when the
tenant's lease expires. The security deposit is refunded; however, if there has
been no damage to the units.
Loan Costs:
Loan costs of $648,000 are included in "Other assets" in the accompanying
consolidated balance sheet and are being amortized on a straight-line basis over
the life of the loan. At December 31, 1996, accumulated amortization is
approximately $118,000. Amortization of loan costs is included in interest
expense.
Income Taxes:
Taxable income or loss of the Partnership is reported in the income tax
returns of its partners. No provision for income taxes is made in the
consolidated financial statements of the Partnership.
Fair Value:
In 1995, the Partnership implemented Statement of Financial Accounting
Standards No. 107, "Disclosure about Fair Value of Financial Instruments," which
requires disclosure of fair value information about financial instruments for
which it is practicable to estimate that value. The carrying amount of the
Partnership's cash and cash equivalents approximates fair value due to short-
term matruities. The Partnership estimates the fair value of its fixed rate
mortgages by discounted cash flow analysis, based on estimated borrowing rates
currently available to the Partnership ("Note C"). The fair value of the
mortgages is approximately $24,216,000, which approximates the carrying value.
Net Income (Loss) Per Weighted Average limited partnership Unit:
Net income (loss) per Limited Partnership Unit is computed by dividing net
income (loss) allocated to the limited partners by 48,049 units outstanding.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Reclassifications:
Certain reclassifications have been made to the 1995 balances to conform to
the 1996 presentation.
NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
NPI Equity Investments, Inc. ("NPI Equity" or the "Managing General
Partner"), is the general partner of the Partnership. On January 19, 1996, the
stockholders of National Property Investors, Inc. ("NPI"), the sole shareholder
of NPI Equity, sold all of the issued and outstanding shares of NPI to IFGP
Corporation ("IFGP"), an affiliate of Insignia Financial Group, Inc.
("Insignia"). Upon closing, the officers and directors of NPI Equity resigned
and IFGP elected new officers and directors. In connection with the sale of the
NPI stock to IFGP, DeForest Ventures II, L.P., an entity comprised of the former
NPI shareholders and their affiliates, sold the 21,340 limited partnership units
owned by it to Insignia LLC.
The following transactions with affiliates of Insignia, NPI, and
affiliates of NPI were charged to expense or capitalized in 1996 and 1995
(dollar amounts in thousands):
For the Years Ended
December 31,
1996 1995
Property management fees (included in operating
expenses) $ 392 $ 385
Reimbursement for services of affiliates (included
in investment properties, general and
administrative expenses and operating expenses) 198 187
During the year ended December 31, 1996, the Partnership paid
approximately $174,000 to affiliates of the Managing General Partner for
brokerage fees incurred in connection with the November 15, 1996, refinancing of
Lakeside Apartments (see "Note E"). These charges have been capitalized as loan
costs, and will be amortized over the life of the loan.
For the period from January 19, 1996, to December 31, 1996, the
Partnership insured its properties under a master policy through an agency and
insurer unaffiliated with the Managing General Partner. An affiliate of the
Managing General Partner acquired, in the acquisition of a business, certain
financial obligations from an insurance agency which was later acquired by the
agent who placed the current year's master policy. The current agent assumed
the financial obligations to the affiliate of the Managing General Partner who
received payments on these obligations from the agent. The amount of the
Partnership's insurance premiums accruing to the benefit of the affiliate of the
Managing General Partner by virtue of the agent's obligations is not
significant.
Included in operating expenses for the year ended December 31, 1995, are
insurance premiums of approximately $175,000 which were paid to the Managing
General Partner under a master insurance policy arranged for by the Managing
General Partner.
NPI Equity is entitled to receive 1% of adjusted cash from operations and
an allocation of 1% of the net income or loss of the Partnership.
On March 29, 1996, an affiliate of Insignia acquired the corporate general
partners owning 1% of the subsidiary partnership which owns the Pinetree
Apartments.
NPI Equity has established a revolving credit facility (the "Partnership
Revolver") to be used to fund deferred maintenance and working capital needs of
the National Property Investors Partnership Series (NPI Partnership). The
maximum draw available to the Partnership under the Partnership Revolver is
$500,000. Loans under the Partnership Revolver will have a term of 365 days, be
unsecured and bear interest at the rate of 2% per annum in excess of the prime
rate announced from time to time by Chemical Bank, N.A. The maturity date of
such borrowing will be accelerated in the event of: (i) the removal of the NPI
Equity (whether or not For Cause); (ii) the sale or refinancing of a property by
the Partnership (whether or not a borrowing under the Partnership Revolver was
made with respect to such property); or (iii) the liquidation of the
Partnership. The Partnership has not borrowed under the Partnership Revolver,
to date.
NOTE C - MORTGAGES PAYABLE
(Dollar amounts in thousands)
The principle terms of mortgages payable are as follows:
<TABLE>
<CAPTION>
Monthly Principal Principal
Payment Stated Balance Balance At
Including Interest Maturity Due At December 31,
Property Interest Rate Date Maturity 1996
<S> <C> <C> <C> <C> <C>
Lakeside $ 105 (1) 7.33% 11/01/03 $ 17,200 $ 17,200
Pinetree 21 9.87% 7/01/01 2,090 2,241
Summerwalk 46 9.75% (2) 4,557 4,557
$ 172 $ 23,998
<FN>
(1) Amount is interest only.
(2) The mortgage matured on September 1, 1996, and an extension obtained
through December 1, 1996; however, the loan has not been formally extended
beyond December 1, 1996. The Partnership continues to pay debt service to
the lender while an extension of the loan or alternative financing is
arranged.
</FN>
</TABLE>
Refer to "Note E" for discussion of the refinancing of the mortgage encumbering
Lakeside Apartments.
Scheduled principal payments on the mortgage payable subsequent to December 31,
1996, are as follows (in thousands):
1997 $ 4,585
1998 31
1999 34
2000 38
2001 2,110
Thereafter 17,200
$ 23,998
NOTE D - INVESTMENT PROPERTIES AND ACCUMULATED DEPRECIATION
(Dollar amounts in thousands)
Initial Cost
To Partnership
Cost
Buildings Capitalized
and Related (Removed)
Personal Subsequent to
Description Encumbrances Land Property Acquisition
Lakeside $ 17,200 $ 2,087 $ 15,363 $ 3,378
Pinetree 2,241 493 3,873 1,726
Summerwalk 4,557 427 6,347 561
$ 23,998 $ 3,007 $ 25,583 $ 5,665
Gross Amount at Which Carried
At December 31, 1996
Buildings Accum- Depre-
And Related lated Date ciable
Personal Depre- Acqu- Life-
Description Land Property Total ciation ired Years
Lakeside $ 2,093 $ 18,735 $ 20,828 $13,439 12/80 5-27.5 yrs.
Pinetree 499 5,593 6,092 3,979 7/80 5-27.5 yrs.
Summerwalk 431 6,904 7,335 4,806 12/80 5-27.5 yrs.
$ 3,023 $ 31,232 $ 34,255 $22,224
Reconciliation of Investment Properties and Accumulated Depreciation:
December 31,
1996 1995
Investment Properties
Balance at beginning of year $ 33,449 $ 33,081
Property Improvements 806 368
Balance at end of year $ 34,255 $ 33,449
December 31,
1996 1995
Accumulated Depreciation
Balance at beginning of year $ 20,936 $ 19,647
Additions charged to expense 1,288 1,289
Balance at end of year $ 22,224 $ 20,936
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1996 and 1995, is $34,230,000 and $33,465,000. The accumulated
depreciation taken for Federal income tax purposes at December 31, 1996 and
1995, is $18,400,000 and $17,582,000.
NOTE E - REFINANCING AND EXTRAORDINARY LOSS
On November 15, 1996, the Partnership refinanced the mortgage encumbering
Lakeside Apartments. The refinancing replaced indebtedness of $17,042,000,
including accrued interest of approximately $99,000, with a new mortgage in the
amount of $17,200,000. The mortgage was refinanced at a rate equal to 7.33%,
compared to the prior rate of 8.25%. Payments of interest only are due on the
first day of each month until the loan matures on November 1, 2003. The prior
note was scheduled to mature in August 1999. Total capitalized loan costs were
$417,000. The Partnership recognized an extraordinary loss on early
extinguishment of debt in the amount of approximately $75,000 due to the write
off of unamortized loan costs.
NOTE F - INCOME TAXES
(Dollar amounts in thousands)
The Partnership files its tax returns on an accrual basis. A
reconciliation of net income from the consolidated financial statements to the
net taxable income to partners is as follows:
Years Ended
December 31,
1996 1995
Net income per consolidated
financial statements $ 25 $ 145
Difference between income and
expenses for consolidated
financial statement and tax
reporting 42 110
Difference between tax depreciation
and consolidated financial statement
deprecation 243 95
Net taxable income to partners $ 310 $ 350
Federal taxable income per limited
partnership unit $ 6.40 $ 7.21
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of partners' deficit (in thousands):
1996
Partners' deficit as reported $ (10,938)
Land and buildings 25
Accumulated depreciation (220)
Syndication and distribution costs 2,727
Prepaid rent 45
Other 86
Partners' deficit-Federal tax basis $ (8,275)
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Partnership has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
NATIONAL PROPERTY INVESTORS III
By: NPI EQUITY INVESTMENTS, INC.
Managing General Partner
By: /s/ William H. Jarrard, Jr.
William H. Jarrard, Jr.
President and Director
Date: February 20, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons on behalf of the Partnership and
in the capacities and on the date indicated.
Signature/Name Title Date
/s/ William H. Jarrard, Jr. President and February 20, 1998
William H. Jarrard, Jr. Director
/s/ Ronald Uretta Vice President and February 20, 1998
Ronald Uretta Treasurer
