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, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-16816
SUMMIT TAX EXEMPT L.P. III
(Exact names of registrant as specified in its charter)
Delaware 13-3442249
- - ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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 [ ]
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SUMMIT TAX EXEMPT L.P. III
(a limited partnership)
STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
ASSETS
June 30, December 31,
1996 1995
----------- -----------
Participating first mortgage bonds-at fair value $46,686,585 $46,686,585
Temporary investments 350,000 250,000
Cash and cash equivalents 194,703 347,908
Interest receivable, net 133,212 132,128
Deferred bond selection fees, net 698,871 729,686
Other assets 0 4,209
----------- -----------
Total assets $48,063,371 $48,150,516
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses $ 100,343 $ 77,880
Due to affiliates 168,768 43,427
----------- -----------
Total liabilities 269,111 121,307
----------- -----------
Contingencies
Partners' capital (deficit):
BUC$holders (3,081,625 BUC$
issued and outstanding) 49,226,676 49,456,927
General Partners (169,001) (164,303)
Net unrealized loss on
participating first mortgage bonds (1,263,415) (1,263,415)
----------- -----------
Total partners' capital 47,794,260 48,029,209
----------- -----------
Total liabilities and partners' capital $48,063,371 $48,150,516
=========== ===========
See accompanying notes to financial statements
-2-
<PAGE>
SUMMIT TAX EXEMPT L.P. III
(a limited partnership)
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues:
Interest income:
Participating first mortgage bonds $ 773,291 $ 710,451 $1,472,708 $1,586,388
Temporary investments 3,475 6,328 6,789 12,364
---------- ---------- ---------- ----------
Total revenues 776,766 716,779 1,479,497 1,598,752
---------- ---------- ---------- ----------
Expenses:
General and administrative 57,206 41,559 103,896 89,001
Loan servicing fees 32,692 32,692 65,383 65,024
Amortization of deferred bond
selection fees 15,408 15,408 30,815 30,816
---------- ---------- ---------- ----------
Total expenses 105,306 89,659 200,094 184,841
---------- ---------- ---------- ----------
Net Income $ 671,460 $ 627,120 $1,279,403 $1,413,911
========== ========== ========== ==========
Allocation of Net Income:
BUC$holders $ 593,955 $ 549,447 $1,125,664 $1,257,130
========== ========== ========== ==========
General Partners:
Special distribution $ 65,383 $ 66,460 $ 130,766 $ 131,125
Other 12,122 11,213 22,973 25,656
---------- ---------- ---------- ----------
$ 77,505 $ 77,673 $ 153,739 $ 156,781
========== ========== ========== ==========
Net Income per BUC $ .19 $ .18 $ .36 $ .41
========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements
-3-
<PAGE>
SUMMIT TAX EXEMPT L.P. III
(a limited partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
Net Unrealized
Loss on Participating
Total BUC$holders General Partners First Mortgage Bonds
------------ ------------ ---------------- ---------------------
<S> <C> <C> <C> <C>
Partners' capital (deficit) -
January 1, 1996 $ 48,029,209 $ 49,456,927 $ (164,303) $ (1,263,415)
Net income 1,279,403 1,125,664 153,739 0
Distributions (1,514,352) (1,355,915) (158,437) 0
------------ ------------ ------------ ------------
Partners' capital (deficit) -
June 30, 1996 $ 47,794,260 $ 49,226,676 $ (169,001) $ (1,263,415)
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements
-4-
<PAGE>
SUMMIT TAX EXEMPT L.P. III
(a limited partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
--------------------------
1996 1995
----------- -----------
Cash flows from operating
activities:
Interest received, net $ 1,478,413 $ 1,617,308
Fees and expenses paid (82,649) (135,489)
----------- -----------
Net cash provided by operating activities 1,395,764 1,481,819
----------- -----------
Cash flows from investing activities:
Net purchase of temporary investments (100,000) (34,344)
Cash flows from financing activities:
Distributions paid (1,448,969) (1,448,251)
----------- -----------
Net decrease in cash and cash equivalents (153,205) (776)
Cash and cash equivalents at beginning of period 347,908 75,950
----------- -----------
Cash and cash equivalents at end of period $ 194,703 $ 75,174
=========== ===========
Schedule reconciling net income to net cash flow
provided by operating activities:
Net income $ 1,279,403 $ 1,413,911
----------- -----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of deferred bond selection fees 30,815 30,816
Changes in:
Interest receivable, net (1,084) 18,556
Other assets 4,209 (7,304)
Accounts payable and accrued expenses 22,463 (16,253)
Due to affiliates 59,958 42,093
----------- -----------
Total adjustments 116,361 67,908
----------- -----------
Net cash provided by operating activities $ 1,395,764 $ 1,481,819
=========== ===========
Supplemental schedule of financing activities
Distributions to partners $ 1,514,352 $ 1,514,712
Increase in distributions payable (65,383) (66,461)
----------- -----------
Distributions paid to partners $ 1,448,969 $ 1,448,251
=========== ===========
See accompanying notes to financial statements
-5-
<PAGE>
SUMMIT TAX EXEMPT L.P. III
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(Unaudited)
NOTE 1 - General
These financial statements have been prepared without audit. In
the opinion of management, the financial statements contain all adjustments
(consisting of only normal recurring adjustments) necessary to present fairly
the financial position of Summit Tax Exempt L.P. III (the "Partnership") as of
June 30, 1996 and the results of its operations for the six and three months
ended June 30, 1996 and 1995 and its cash flows for the six months ended June
30, 1996 and 1995. However, the operating results for the interim periods may
not be indicative of the results expected for the full year.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. It is suggested that these financial statements be
read in conjunction with the financial statements and notes thereto included in
the Partnership's Annual Report on Form 10-K/A-1 filed with the Securities and
Exchange Commission for the year ended December 31, 1995.
NOTE 2 - Participating First Mortgage Bonds ("FMBs")
The Partnership accounts for its investments in the FMBs as debt
securities under the provisions of Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity Securities"
("SFAS 115").
The Partnership has a right to require redemption of the FMBs
approximately twelve years after their issuance. The Partnership anticipates
holding the FMBs for approximately 12 to 15 years from the date of issuance;
however, it can elect to hold until maturity. As such, SFAS 115 requires the
Partnership to classify these investments as "available for sale." Accordingly,
investments in FMBs are carried at their estimated fair values, with unrealized
gains and losses reported in a separate component of partners' capital.
Unrealized holding gains or losses do not affect the cash flow generated from
property operations, distributions to BUC$holders, the characterization of the
tax-exempt income stream or the financial obligations under the FMBs.
The Partnership periodically evaluates each FMB to determine
whether a decline in fair value below the FMB's cost basis is other than
temporary. Such a decline is considered to be other than temporary if, based on
current information and events, it is probable that the Partnership will be
unable to collect all amounts due according to the existing contractual terms of
the bonds. If the decline is judged to be other than temporary, the cost basis
of the bond is written down to its then estimated fair value, with the amount of
the write-down accounted for as realized loss.
Because the FMBs are not readily marketable, the Partnership
estimates fair value for each bond as the present value of its expected cash
flows using an interest rate for comparable tax-exempt investments. This process
is based upon projections of future economic events affecting the real estate
collateralizing the bonds, such as property occupancy rates, rental rates,
operating cost inflation and market capitalization rates, and upon determination
of an appropriate market rate of interest, all of which are based on good faith
estimates and assumptions developed by the Partnership's management. Changes in
market conditions and circumstances may occur which would cause these estimates
and assumptions to change, therefore, actual results may vary from the estimates
and the variance may be material.
-6-
<PAGE>
SUMMIT TAX EXEMPT L.P. III
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(Unaudited)
NOTE 2 - Participating First Mortgage Bonds ("FMBs") (continued)
With respect to all FMBs, the difference between the stated
interest rates and the actual rates paid (whether deferred and payable out of
future cash flow or, ultimately, from sale or refinancing proceeds) on FMBs is
not accrued for financial statement purposes. Unrecorded contractual interest
income was approximately $354,000 and $651,000 for the six months ended June 30,
1996 and 1995, respectively.
The cost basis of the FMBs was $47,950,000 at June 30, 1996 and
December 31, 1995. The net unrealized loss on FMBs consists of gross unrealized
gains and losses of $488,045 and $1,751,460, respectively, at both June 30, 1996
and December 31, 1995.
-7-
<PAGE>
SUMMIT TAX EXEMPT L.P., III
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(Unaudited)
NOTE 2 - Participating First Mortgage Bonds (continued)
Descriptions of the various FMBs owned by the Partnership at June 30, 1996 are
as follows:
<TABLE>
<CAPTION>
Annualized
Interest Rate
Paid for the Minimum
six months Annual Carrying
ended Pay Rate Stated Amount
June 30, at June Interest Maturity at June 30,
Property Location 1996* 30, 1996* Rate* Call Date Date Face Amount 1996 (C)
- - -------- -------- ----------- --------- ------ --------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Players's Club (A) Fort Myers, FL 7.00% 7.00% 8.00% Aug. 1999 Aug. 2007 $ 7,200,000 $ 7,383,769
Lakepointe Stone Mountain, GA 6.00 6.00 8.50 Jan. 2000 Oct. 2007 15,100,000 14,886,559
Sunset Village Lancaster, CA 4.68 (B) 8.50 Mar. 2000 Mar. 2008 11,375,000 9,178,214
Sunset Creek Lancaster, CA 4.23 (B) 8.50 Mar. 2000 Mar. 2008 8,275,000 5,933,767
Orchard Mill Atlanta, GA 6.30 (B) 9.00 Apr. 2001 Mar. 2008 10,500,000 9,304,276
----------- -----------
$52,450,000 $46,686,585
=========== ===========
</TABLE>
*The rate paid represents the interest recorded by the Partnership while the
stated rate represents the coupon rate of the FMB and the minimum pay rate
represents the minimum rate required to be paid under the respective forbearance
agreements.
(A) Summit Tax Exempt L.P. II, of which the general partners are either the
same or affiliates of the General Partners of the Partnership, acquired the
other $2,500,000 of the Player's Club FMB.
(B) Pay rate is based on the net cash flow generated by operations of the
underlying property.
(C) FMBs are carried at their estimated fair values at June 30, 1996.
-8-
<PAGE>
NOTE 3 - Related Parties
Prudential-Bache Properties, Inc. ("PBP") and the Related General
Partner (collectively, the "General Partners") and their affiliates perform
services for the Partnership which include, but are not limited to: accounting
and financial management; registrar, transfer and assignment functions; asset
management; investor communications; printing and other administrative services.
The General Partners and their affiliates receive reimbursements for costs
incurred in connection with these services, the amount of which is limited by
the provisions of the Agreement of Limited Partnership (the "Partnership
Agreement"). The costs and expenses were:
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
1996 1995 1996 1995
-------- -------- -------- --------
PBP and affiliates:
General and administrative $ 3,172 $ 15,814 $ 18,284 $ 31,307
-------- -------- -------- --------
Related General Partner
and affiliates:
Loan servicing fees 32,692 32,692 65,383 65,024
General and administrative 12,323 3,666 27,323 6,660
-------- -------- -------- --------
45,015 36,358 92,706 71,684
-------- -------- -------- --------
$ 48,187 $ 52,172 $110,990 $102,991
======== ======== ======== ========
An affiliate of the Related General Partner receives loan
servicing fees (see above) in an amount of .25% per annum of the principal
amount outstanding of mortgage loans serviced by the affiliate.
A division of Prudential Securities Incorporated ("PSI"), an
affiliate of PBP, was responsible for the purchase, sale and safekeeping of the
Partnership's temporary investments in 1995. This account was maintained in
accordance with the Partnership Agreement.
PSI owns 17,700 BUC$ at June 30, 1996.
The Player's Club property (securing a $7,200,000 FMB in this
Partnership) also secures an FMB for $2,500,000 held by Summit Tax Exempt L.P.
II, of which the general partners are either the same or affiliates of the
General Partners of this Partnership. The original owner of the FMB is an
affiliate of the Related General Partner.
-9-
<PAGE>
NOTE 4 - Contingencies
On or about October 18, 1993, a putative class action, captioned
Kinnes et al v. Prudential Securities Group, Inc. et al. (93 Civ. 654), was
filed in the United States District Court for the District of Arizona,
purportedly on behalf of investors in the Partnership against the Partnership,
PBP, PSI and a number of other defendants. On November 16, 1993, a putative
class action captioned Connelly et al v. Prudential-Bache Securities Inc. et al.
(93 Civ. 713) , was filed in the United States District Court for the District
of Arizona , purportedly on behalf of investors in the Partnership against the
Partnership, PBP, PSI and a number of other defendants. On January 3, 1992, a
putative class action, captioned Levine v. Prudential-Bache Properties Inc. et
al. (92 Civ. 52), was filed in the United States District Court for the Northern
District of Illinois purportedly on behalf of investors in the Partnership
against the General Partners, PSI and a number of other defendants. Subsequently
the Related General Partner exited the Levine litigation by way of settlement.
By order dated April 14, 1994 order, the Judicial Panel on
Multidistrict Litigation transferred the Kinnes case, by order dated May 4,
1994, the Connelly case, and by order dated July 13, 1994, the Levine Case, to a
single judge of the United States District Court for the Southern District of
New York and consolidated them for pretrial proceedings under the caption In re
Prudential Securities Incorporated Limited Partnerships Litigation (MDL Docket
No. 1005). On June 8, 1994 plaintiffs in the transferred cases filed a complaint
that consolidated the previously filed complaints and named as defendants, among
others, PSI, certain of its present and former employees and the General
Partners. The Partnership was not named a defendant in the consolidated
complaint, but the name of the Partnership was listed as being among the limited
partnerships at issue in the case.
On August 9, 1995 PBP, PSI and other Prudential defendants entered
into a Stipulation and Agreement of Partial Compromise and Settlement with legal
counsel representing plaintiffs in the consolidated actions. The court
preliminarily approved the settlement agreement by order dated August 29, 1995
and, following a hearing held November 17, 1995, found that the agreement was
fair, reasonable, adequate and in the best interests of the plaintiff class. The
court gave final approval to the settlement, certified a class of purchasers of
specific limited partnerships, including the Partnership, released all settled
claims by members of the class against the PSI settling defendants and
permanently barred and enjoined class members from instituting, commencing or
prosecuting any settled claim against the released parties. The full amount due
under the settlement agreement has been paid by PSI. The consolidated action
remains pending against the Related General Partner and certain of its
affiliates.
The Related General Partner has been engaged in settlement
negotiations with counsel for the plaintiffs. In the event a settlement cannot
be reached, the Related General Partner believes it has meritorious defenses to
the consolidated complaint and intends to vigorously defend against this action.
NOTE 5 - Subsequent Event
In August 1996, a distribution of approximately $678,000 and
$14,000 was paid to the BUC$holders and General Partners, respectively, for the
quarter ended June 30, 1996.
-10-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
- - -------------------------------
Summit Tax Exempt L.P. III (the "Partnership") has invested in
five tax-exempt participating first mortgage bonds ("FMBs") issued by various
state or local governments or their agencies or authorities. The FMBs are
secured by participating first mortgage loans on the properties.
At the beginning of the year, the Partnership had cash and
temporary investments of $598,000. After the payment of distributions and
receipt of the net cash flow from operations, the Partnership had approximately
$545,000 in cash and temporary investments at June 30, 1996. The second quarter
distribution of $678,000 ($.22 per BUC) was paid to BUC$holders in August 1996
from cash flow from operations. Interest payments from FMBs are anticipated to
provide sufficient liquidity to meet the operating expenditures of the
Partnership in future years and to fund distributions. The restructuring of the
FMBs in 1995 may result in the General Partners' reducing the distributions to
BUC$holders in future periods.
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. The Partnership's investments in FMBs are
secured by a Partnership interest in properties which are diversified by
location so that if one area of the country is experiencing downturns in the
economy, the remaining properties may be experiencing upswings. However, the
geographic diversification of the portfolio may not protect against a general
downturn in the national economy.
Results of Operations
- - ---------------------
The Partnership accounts for its investments in the FMBs as debt
securities under the provisions of Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity Securities"
("SFAS 115").
The Partnership has a right to require redemption of the FMBs
approximately twelve years after their issuance. The Partnership anticipates
holding the FMBs for approximately 12 to 15 years from the date of issuance;
however, it can elect to hold until maturity. As such, SFAS 115 requires the
Partnership to classify these investments as "available for sale." Accordingly,
investments in FMBs are carried at their estimated fair values, with unrealized
gains and losses reported in a separate component of partners' capital.
Unrealized holding gains or losses do not affect the cash flow generated from
property operations, distributions to BUC$holders, the characterization of the
tax-exempt income stream or the financial obligations under the FMBs.
The Partnership periodically evaluates each FMB to determine
whether a decline in fair value below the FMB's cost basis is other than
temporary. Such a decline is considered to be other than temporary if, based on
current information and events, it is probable that the Partnership will be
unable to collect all amounts due according to the existing contractual terms of
the bonds. If the decline is judged to be other than temporary, the cost basis
of the bond is written down to its then estimated fair value, with the amount of
the write-down accounted for as realized loss.
Because the FMBs are not readily marketable, the Partnership
estimates fair value for each bond as the present value of its expected cash
flows using an interest rate for comparable tax-exempt investments. This process
is based upon projections of future economic events affecting the real estate
collateralizing the bonds, such as property occupancy rates, rental rates,
operating cost inflation and market capitalization rates, and upon determination
of an appropriate market rate of interest, all of which are based on good faith
estimates and assumptions developed by the Partnership's management. Changes in
market conditions and circumstances may occur which would cause these estimates
and assumptions to change, therefore, actual results may vary from the estimates
and the variance may be material.
-11-
<PAGE>
Net income increased by approximately $44,000 for the three months
and decreased approximately $135,000 for the six months ended June 30, 1996 as
compared to the corresponding periods in 1995 for the reasons discussed below.
Interest income from FMBs increased approximately $63,000 and
decreased approximately $114,000 for the three and six months ended June 30,
1996, respectively, as compared to the corresponding periods in 1995. The
increase for the three months was primarily due to an increase in base interest
received from Orchard Mill. The decrease during the six months was primarily due
to reduced debt service payments received for the Sunset Village and Sunset
Creek FMBs, and were restructured in the third quarter of 1995 which offset the
increase from Orchard Mill.
Interest income from temporary investments decreased by
approximately $3,000 and $6,000 for the three and six months ended June 30, 1996
as compared to the corresponding periods in 1995 primarily due to higher
interest rates and invested balances in 1995.
General and administrative expenses increased by approximately
$16,000 and $15,000 for the three and six months ended June 30, 1996 as compared
to the corresponding periods in 1995 primarily due to an increase in
nonrecurring legal expenses.
Property Information
- - --------------------
The following table lists the FMBs the Partnership owns together
with occupancy rates of the underlying properties as of June 30, 1996:
<TABLE>
<CAPTION>
Annualized
Interest
Rate Paid Minimum
for the six Annual
Stated months ended Pay Rate at
Interest June 30, June 30,
Property Face Amount Occupancy Rate* 1996* 1996*
- - -------- ----------- --------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Player's Club, Fort Myers, FL (A) $ 7,200,000 80.9% 8.00% 7.00% 7.00%
Lakepointe, Stone Mountain, GA 15,100,000 94.5 8.50 6.00 6.00
Sunset Village, Lancaster, CA 11,375,000 80.8 8.50 4.68 (B)
Sunset Creek, Lancaster, CA 8,275,000 90.0 8.50 4.23 (B)
Orchard Mill, Atlanta, CA 10,500,000 95.8 9.00 6.30 (B)
-----------
$52,450,000
===========
</TABLE>
*The rate paid represents the interest recorded by the Partnership while the
stated rate represents the coupon rate of the FMB and the minimum pay rate
represents the minimum rate required to be paid under the respective forbearance
agreements.
(A) Summit Tax Exempt L.P. II, of which the general partners are either the
same or affiliates of the General Partners of the Partnership, acquired the
other $2,500,000 of the Player's Club FMB.
-12-
<PAGE>
(B) Pay rate is based on net cash flow generated by operations of the
underlying property.
General
- - -------
The determination as to whether it is the best interest of the
Partnership to enter into forbearance agreements on the FMBs or, alternatively,
to pursue its remedies under the loan documents, including foreclosure, is based
upon several factors including, but not limited to, property performance, owner
cooperation and projected legal costs.
From time to time, certain property owners have elected to
supplement the cash flow generated by the properties to meet the required FMB
interest payments. There can be no assurance that in the future any property
owner will elect to supplement property cash flow to satisfy bond interest
requirements, if necessary. The owner of the Sunset Village and Sunset Creek
properties supplemented the cash flow generated by the respective properties to
meet their interest payments during the first four months of 1995. No property
owner made supplementary payments during the six months ended June 30, 1996.
-13-
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - Incorporated by reference to Note 4 to the
financial statements filed herewith in Item 1 of Part 1 of the
Registrant's Quarterly Report.
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
4(a) Partnership Agreement, incorporated by reference to
Exhibit A to the Prospectus of Registrant, dated
February 25, 1987, filed pursuant to Rule 424(b) under
the Securities Act of 1933, File No. 33-13184.
4(b) Certificate of Limited Partnership is incorporated by
reference to Exhibit 4 to the Registration Statement on
Form S-11, File No. 33-13184.
27 Financial Data Schedule (filed herewith).
(b) Reports on Form 8-K - No reports on Form 8-K were filed during
the quarter.
-14-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
SUMMIT TAX EXEMPT L.P. III
By: Related Tax Exempt Associates III, Inc.
A Delaware corporation, General Partner
Date: August 13, 1996 By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Vice President
Date: August 13, 1996 By: /s/ Lawrence J. Lipton
----------------------
Lawrence J. Lipton
Treasurer
(Principal Financial and Accounting Officer)
By: Prudential-Bache Properties, Inc.
A Delaware corporation, General Partner
Date: August 13, 1996 By: /s/ Eugene D. Burak
-------------------
Eugene D. Burak
Vice President
-15-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial
information extracted from the financial
statements for Summit Tax Exempt L.P. III and is
qualified in its entirety by reference to such
financial statements
</LEGEND>
<CIK> 0000812220
<NAME> Summit Tax Exempt L.P. III
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 194,703
<SECURITIES> 47,036,585
<RECEIVABLES> 832,083
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 48,063,371
<CURRENT-LIABILITIES> 269,111
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 47,794,260
<TOTAL-LIABILITY-AND-EQUITY> 48,063,371
<SALES> 0
<TOTAL-REVENUES> 1,479,497
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 200,094
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,279,403
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,279,403
<EPS-PRIMARY> .36
<EPS-DILUTED> 0
</TABLE>
