UNITED STATES
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 September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-20476
INDEPENDENCE TAX CREDIT PLUS L.P.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3589920
- ------------------------------- -------------------
(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 [ ]
<PAGE>
PART I - Financial Information
Item 1. Financial Statements
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
September 30, March 31,
1998 1998
------------ ------------
<S> <C> <C>
ASSETS
Property and equipment at cost,
net of accumulated depreciation
of $29,673,058 and $26,761,173,
respectively $ 152,712,041 $ 155,531,285
Cash and cash equivalents 1,724,163 2,149,895
Cash held in escrow 8,943,957 8,589,271
Deferred costs, net of accumulated
amortization of $1,539,843
and $1,447,322, respectively 2,673,715 2,672,730
Other assets 2,091,200 1,843,186
------------- -------------
Total assets $ 168,145,076 $ 170,786,367
============= =============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage notes payable $ 95,415,392 $ 97,153,977
Construction note payable 6,740,018 6,740,018
Accounts payable and other
liabilities 7,296,968 7,220,887
Due to local general partners and
affiliates 6,748,884 5,972,205
Due to general partner and
affiliates 1,412,109 929,201
------------- -------------
Total liabilities 117,613,371 118,016,288
------------- -------------
Minority interest 5,334,391 6,470,579
------------- -------------
Partners' capital:
Limited partners (76,786 BACs
issued and outstanding) 45,428,215 46,519,379
General partner (230,901) (219,879)
------------- -------------
Total partners' capital 45,197,314 46,299,500
Total liabilities and partners' capital $ 168,145,076 $ 170,786,367
============= =============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
2
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
1998 1997* 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues
Rental income $ 4,766,728 $ 4,667,486 $ 9,593,394 $ 9,379,232
Other income 175,780 149,922 324,618 277,885
------------ ------------ ------------ ------------
4,942,508 4,817,408 9,918,012 9,657,117
------------ ------------ ------------ ------------
Expenses
General and
administrative 910,398 847,648 1,921,502 1,630,483
General and
administrative-
related parties
(Note 2) 495,084 282,031 992,994 573,651
Repairs and
maintenance 760,398 732,133 1,532,764 1,336,338
Operating and other 628,844 632,948 1,273,446 1,322,616
Taxes 328,537 533,912 659,592 821,735
Insurance 217,073 221,408 418,249 427,717
Financial,
principally interest 1,264,764 1,206,707 2,558,734 2,643,828
Depreciation and
amortization 1,480,895 1,526,841 3,015,459 3,069,509
------------ ------------ ------------ ------------
Total Expenses 6,085,993 5,983,628 12,372,740 11,825,877
------------ ------------ ------------ ------------
Net loss before
minority interest and
extraordinary item (1,143,485) (1,166,220) (2,454,728) (2,168,760)
Minority interest in
loss of subsidiary
partnerships 2,103 3,405 11,551 10,561
------------ ------------ ------------ ------------
Net loss before
extraordinary item (1,141,382) (1,162,815) (2,443,177) (2,158,199)
Extraordinary item-
forgiveness of
indebtedness income
(Note 3) 0 0 1,340,991 0
------------ ------------ ------------ ------------
Net loss $ (1,141,382) $ (1,162,815) $ (1,102,186) $ (2,158,199)
============ ============ ============ ============
Net loss -
limited partners $ (1,129,968) $ (1,151,187) $ (1,091,164) $ (2,136,617)
============ ============ ============ ============
Net loss
per BAC $ (14.72) $ (14.99) $ (14.21) $ (27.82)
============ ============ ============ ============
</TABLE>
*Reclassified for comparative purposes.
See Accompanying Notes to Consolidated Financial Statements.
3
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Statement of Changes in Partners' Capital
(Unaudited)
<TABLE>
<CAPTION>
Limited General
Total Partners Partner
------------ ------------ -------------
<S> <C> <C> <C>
Partners' capital-
April 1, 1998 $ 46,299,500 $ 46,519,379 $ (219,879)
Net loss (1,102,186) (1,091,164) (11,022)
------------ ------------ ------------
Partners' capital-
September 30, 1998 $(45,197,314) $ 45,428,215 $ (230,901)
============ ============ ============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
4
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Increase (decrease) in Cash and Cash Equivalents
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
September 30,
1998 1997
------ ------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(1,102,186) $(2,158,199)
----------- -----------
Adjustments to reconcile net
loss to net cash provided by
operating activities:
Extraordinary item-forgiveness of
indebtedness income (Note 3) (1,340,991) 0
Depreciation and amortization 3,015,459 3,069,509
Minority interest in loss of
subsidiaries (11,551) (10,561)
Increase in due to general
partner and affiliates 482,908 27,496
Increase in accounts
payable and other liabilities 76,081 269,934
(Increase) decrease in other assets (248,014) 100,304
Increase in cash held in escrow (417,686) (411,975)
----------- -----------
Total adjustments 1,556,206 3,044,707
----------- -----------
Net cash provided by
operating activities 454,020 886,508
----------- -----------
Cash flows from investing activities:
Acquisition of property and
equipment (92,641) (28,003)
Decrease in cash held in escrow 63,000 627,436
Increase in due to local general
partners and affiliates 1,266,614 99,463
Decrease in due to local general
partners and affiliates (281,944) (405,833)
----------- -----------
Net cash provided by
investing activities 955,029 293,063
----------- -----------
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
5
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Increase (decrease) in Cash and Cash Equivalents
(continued)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
September 30,
1998 1997
----------- -----------
<S> <C> <C>
Cash flows from financing activities:
Proceeds from mortgage note payable 2,257,500 0
Repayment of mortgage notes (2,863,085) (811,092)
Increase in deferred costs (104,559) (8,100)
Decrease in capitalization of
consolidated subsidiaries
attributable to minority interest (1,124,637) (112,145)
----------- -----------
Net cash used in financing
activities (1,834,781) (931,337)
----------- -----------
Net (decrease) increase in cash
and cash equivalents (425,732) 248,234
Cash and cash equivalents at
beginning of period 2,149,895 2,087,057
----------- -----------
Cash and cash equivalents at
end of period $ 1,724,163 $ 2,335,291
=========== ===========
Supplemental disclosures of noncash investing and financing activities:
Forgiveness of indebtedness:
Decrease in mortgage notes $(1,133,000) $ 0
Decrease in due to local general
partners and affiliates (207,991) 0
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
6
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1998
(Unaudited)
Note 1 - General
The consolidated financial statements include the accounts of Independence Tax
Credit Plus L.P. (the "Partnership") and 28 other limited partnerships
("subsidiary partnerships", "subsidiaries" or "Local Partnerships") owning
affordable apartment complexes that are eligible for the low-income housing tax
credit. Some of such apartment complexes may also be eligible for the
rehabilitation investment credit for certified historic structures. The general
partner of the Partnership is Related Independence Associates L.P., a Delaware
limited partnership (the "General Partner"). Through the rights of the
Partnership and/or an affiliate of the General Partner, which affiliate has a
contractual obligation to act on behalf of the Partnership, to remove the
general partner of the subsidiary local partnerships and to approve certain
major operating and financial decisions, the Partnership has a controlling
financial interest in the subsidiary partnerships.
For financial reporting purposes, the Partnership's fiscal quarter ends
September 30. All subsidiaries have fiscal quarters ending June 30. Accounts of
the subsidiaries have been adjusted for intercompany transactions from July 1
through September 30. The Partnership's fiscal quarter ends September 30 in
order to allow adequate time for the subsidiaries financial statements to be
prepared and consolidated.
All intercompany accounts and transactions with the subsidiary partnerships have
been eliminated in consolidation.
Increases (decreases) in the capitalization of consolidated subsidiaries
attributable to minority interest arise from cash contributions and cash
distributions to the minority interest partners.
Losses attributable to minority interest which exceed the minority interests'
investment in a subsidiary have been charged to the Partnership. Such losses
aggregated approximately $0 and $8,000 and $0 and $14,000 for the three and six
months ended September 30, 1998 and 1997, respectively. The Partnership's
investment in each subsidiary is equal to the respective subsidiary's partners'
7
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1998
(Unaudited)
equity less minority interest capital, if any. In consolidation, all subsidiary
partnership losses are included in the Partnership's capital account except for
losses allocated to minority interest capital.
Certain information and note disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
has been omitted or condensed. These condensed 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,
1998.
The books and records of the Partnership are maintained on the accrual basis of
accounting in accordance with generally accepted accounting principles. In the
opinion of the General Partner, 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
September 30, 1998, the results of operations for the three and six months ended
September 30, 1998 and 1997 and cash flows for the six months ended September
30, 1998 and 1997. However, the operating results for the six months ended
September 30, 1998 may not be indicative of the results for the year.
Note 2 - Related Party Transactions
An affiliate of the General Partner, Independence SLP L.P., has either a 0.1% or
1% interest as a special limited partner in each of the Local Partnerships. An
affiliate of the General Partner also has a minority interest in certain Local
Partnerships.
8
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1998
(Unaudited)
The costs incurred to related parties for the three and six months ended
September 30, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Partnership manage-
ment fees (a) $220,000 $ 12,500 $440,000 $ 25,000
Expense reimburse-
ment (b) 47,062 21,957 75,062 63,943
Property manage-
ment fees incurred
to affiliates of the
General Partner (c) 9,173 7,602 18,389 19,786
Local administra-
tive fee (d) 19,000 22,000 38,000 44,000
-------- -------- -------- --------
295,235 64,059 571,451 152,729
-------- -------- -------- --------
Property manage-
ment fees incurred
to affiliates of
the subsidiary
partnerships'
general partners (c) 199,849 217,972 421,543 420,922
-------- -------- -------- --------
Total general and
administrative-
related parties $495,084 $282,031 $992,994 $573,651
======== ======== ======== ========
</TABLE>
(a) The General Partner is 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. Subject to the foregoing limitation, the partnership
management fee will be determined by the General Partner in its sole discretion
based upon its review of the Partnership's investments. Unpaid partnership
management fees for any year have been, and will continue to 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 Partner amounting to
approximately $979,000 and $539,000 were accrued and unpaid as of September 30,
1998 and March 31, 1998, respectively. Without the General Partner's advances
and contin-
9
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1998
(Unaudited)
ued accrual without payment of certain fees and expense reimbursements, the
Partnership will not be in a position to meet its obligations. The General
Partner has continued advancing and allowing the accrual without payment of
these amounts but is under no obligation to continue to do so.
(b) The Partnership reimburses the General Partner and its affiliates for actual
Partnership operating expenses incurred by the General Partner and its
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 Partner performs asset monitoring for the Partnership.
These services include site visits and evaluations of the subsidiary
partnerships' performance.
(c) Property management fees incurred to affiliates of the subsidiary
partnerships amounted to $209,022 and $225,574 and $439,932 and $440,708 for the
three and six months ended September 30, 1998 and 1997, respectively. Included
in amounts incurred to affiliates of the subsidiary partnerships were $9,173 and
$7,602 and $18,389 and $19,786 for the three and six months ended September 30,
1998 and 1997, respectively, which were also incurred to an affiliate of the
General Partner.
(d) Independence SLP L.P. is entitled to receive a local administrative fee of
up to $2,500 per year from each subsidiary partnership.
Pursuant to the Partnership Agreement and the Local Partnership Agreements,
the General Partner and Independence SLP L.P. received their prorata share of
profits, losses and tax credits.
Note 3 - Mortgage Notes Payable
Hampden Hall Associates, L.P.
On March 20, 1998, Hampden Hall Associates, L.P. ("Hampden Hall") refinanced its
primary debt under the HUD 223(f) program. The amount of this new mortgage is
$2,257,500. It carries a term of 35 years and has an interest rate of
approximately 6.5%. The existing $1,760,000 tax-exempt bonds were paid off with
the pro-
10
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1998
(Unaudited)
ceeds of the new mortgage and the balance of the proceeds were used to pay
closing costs and a portion of a note payable to the special limited partner of
the Local General Partner. The special limited partner of the Local General
Partner also purchased three note payables to the City of St. Louis totaling
$1,350,000 and amounts due to a former Local General Partner totaling $224,491
for a discounted price of $233,500 resulting in forgiveness of indebtedness
income of $1,340,991.
Note 4 - Commitment and Contingency
Old Public Limited Partnership
The Old Public Limited Partnership had experienced a decline in operations which
necessitated the removal of the Local General Partner and replacement of the
property management agent. On March 23, 1998 the Local General Partner was
replaced by New Texas Associates, Inc. and Continental Property Management, LLC
was hired as management agent. At the present time, the property is fully
occupied; however, net operating income is not sufficient to fully service the
existing debt.
During May 1998, the Partnership was notified that there was to be a sale of a
real estate tax lien that had been placed on the property due to non-payment of
the real estate taxes relating to 1995 and 1996. Through September 30, 1998, the
Partnership has advanced approximately $36,000 in order to prevent the sale of
the tax liens, and to bring the property current through 1997. On July 9, 1998,
the lender notified the Partnership that the mortgage loan was in default. The
Partnership is discussing the matter with the lender and will attempt to
successfully resolve it. The Partnership intends to pursue all available options
to maintain its interest in the property.
11
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1998
(Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
The Partnership's primary source of funds include (i) working capital reserves
raised and interest earned thereon, and (ii) cash distributions from the
operations of the Local Partnerships. All these sources of funds are available
to meet obligations of the Partnership.
As of September 30, 1998, the Partnership has invested all of its net proceeds
in twenty-eight Local Partnerships. Approximately $297,000 of the purchase price
remains to be paid to the Local Partnerships (all of which is held in escrow).
During the six months ended September 30, 1998, approximately $63,000 was paid
from escrow.
Cash and cash equivalents of the Partnership and its twenty-eight consolidated
subsidiary partnerships decreased approximately $426,000 during the six months
ended September 30, 1998 due to net repayments of mortgage notes ($606,000), an
increase in deferred costs ($105,000), acquisition of property and equipment
($93,000) and a decrease in capitalization of consolidated subsidiaries
attributable to minority interest ($1,125,000) which exceeded cash provided by
operating activities ($454,000), a decrease in cash held in escrow ($63,000) and
a net increase in due to Local General Partners and affiliates ($985,000).
Included in the adjustments to reconcile the net loss to cash provided by
operating activities is forgiveness of indebtedness income of $1,341,000 and
depreciation and amortization of $3,015,000.
The working capital reserve at September 30, 1998 and March 31, 1998 was
approximately $7,000 and $119,000, respectively.
Cash distributions received from the Local Partnerships remain relatively
immaterial. Distributions of approximately $48,000 and $23,000 were received
during the six months ended September 30, 1998 and 1997, respectively. However,
management expects that the distributions received from the Local Partnerships
will increase, although not to a level sufficient to permit providing cash
distributions to BACs holders. These distributions as well as the working
capital reserves referred to in the above paragraph will be used to meet the
operating expenses of the Partnership.
12
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1998
(Unaudited)
Partnership management fees owed to the General Partner amounting to
approximately $979,000 and $539,000 were accrued and unpaid as of September 30,
1998 and March 31, 1998, respectively (see Note 2). Without the General
Partner's advances and continued accrual without payment of certain fees and
expense reimbursements, the Partnership will not be in a position to meet its
obligations. The General Partner has continued advancing and allowing the
accrual without payment of these amounts but is under no obligation to continue
to do so.
For a discussion of Mortgage Notes Payable, see Note 3 to the financial
statements.
For a discussion of contingencies affecting certain Local Partnerships, see Note
4 to the financial statements. Since the maximum loss the Partnership would be
liable for is its net investment in the Local Partnership, the resolution of the
existing contingency 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 will eliminate the ability to
generate future tax credits from such Local Partnership and may also result in
recapture of tax credits if the investment is lost before the expiration of the
compliance period.
Management has been in contact with all the Local Partnerships in the southeast
region and does not anticipate any significant increases to repairs and
maintenance due to the effect of Hurricane Georges on the portfolio.
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 from
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. The Partnership has fully invested the proceeds of its
offering in 28 local partnerships, all of which fully have their tax credits in
place. The tax credits are attached to the project for a period of ten years,
and are transferable with the property during the remainder of the ten year
period. If trends in the real estate market warranted the sale of a property,
the remaining tax credits would transfer to the new owner, thereby adding
significant value to the property on
13
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1998
(Unaudited)
the market, which are not included in the
financial statement carrying amount.
Results of Operations
The Partnership's results of operations for the three and six months ended
September 30, 1998 and 1997 consisted primarily of the results of the
Partnership's investment in twenty-eight Local Partnerships. The majority of
Local Partnership income continues to be in the form of rental income with the
corresponding expenses being divided among operations, depreciation and mortgage
interest.
Rental income remained fairly consistent with an increase of approximately 2%
for both the three and six months ended September 30, 1998 as compared to the
corresponding periods in 1997 primarily due to rental rate increases.
Other income increased approximately $26,000 and $47,000 for the three and six
months ended September 30, 1998 as compared to the corresponding periods in 1997
primarily due to a refund of management fees received in 1998 at one Local
Partnership and the forfeiture of housing assistance payments subsidy income due
to tenants not renewing their housing assistance payments subsidy contracts on
time in 1997 at another Local Partnership.
Total expenses excluding general and administrative, general and
administrative-related parties, repairs and maintenance and taxes remained
fairly consistent with an increase of less than 1% and a decrease of
approximately 3% for the three and six months ended September 30, 1998 as
compared to the corresponding periods in 1997.
General and administrative has increased approximately $291,000 for the six
months ended September 30, 1998 as compared to the corresponding period in 1997
primarily due to an increase in office and legal expenses at one Local
Partnership, an increase in salaries at a second Local Partnership as well as
costs associated with the refinancing of the mortgage note at a third Local
Partnership.
General and administrative-related parties has increased approximately $213,000
and $419,000 for the three and six months ended September 30, 1998 as compared
to the corresponding periods in 1997 primarily due to an increase in partnership
management fees payable to the General Partner.
14
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1998
(Unaudited)
Repairs and maintenance increased approximately $196,000 for the six months
ended September 30, 1998 as compared to the corresponding period in 1997
primarily due to masonry work, painting, cleaning and installation of kitchen
cabinets at one Local Partnership, replacements of appliances, doors, and
plumbing work at a second Local Partnership, new siding of apartment buildings
at a third Local Partnership and replacement of carpet and painting of
apartments at a fourth Local Partnership.
Taxes decreased approximately $205,000 and $162,000 for the three and six months
ended September 30, 1998 as compared to the corresponding periods in 1997
primarily due to an underaccrual of real estate taxes at two Local Partnerships
in 1997.
Forgiveness of indebtedness income of approximately $1,340,991 was recorded
during the six months ended September 30, 1998 (see Note 3 to the financial
statements).
Year 2000 Compliance
The Partnership utilizes the computer services of an affiliate of the General
Partner. The affiliate of the General Partner is in the process of upgrading its
computer information systems to be year 2000 compliant and beyond. The Year 2000
compliance issue concerns the inability of a computerized system to accurately
record dates after 1999. The affiliate of the General Partner recently underwent
a conversion of its financial systems applications and is in the process of
upgrading and testing the in house software and hardware inventory. The
workstations that experienced problems from this process were corrected with an
upgrade patch. The affiliate of the General Partner has incurred costs of
approximately $1,000,000 to date and estimates the total costs to be
approximately $2,000,000. These costs are not being charged to the Partnership.
In regard to third parties, the Partnership's General Partner is in the process
of evaluating the potential adverse impact that could result from the failure of
material service providers to be year 2000 compliant. A detailed survey and
assessment of third party readiness will be sent to material third parties in
the fourth quarter of 1998. The results of the surveys will be compiled in early
1999. No estimate can be made at this time as to the impact of the readiness of
such third parties. The Partnership's General Partner plans to have these issues
fully assessed by early 1999, at which time the risks will be addressed and
a contingency plan will be implemented if necessary.
15
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None
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:
(3A) Form of Amended and Restated Agreement of Limited
Partnership of Independence Tax Credit Plus L.P., attached to the Prospectus as
Exhibit A*
(3B) Amended and Restated Certificate of Limited Partnership of
Independence Tax Credit Plus L.P.*
(10A) Form of Subscription Agreement attached to the Prospectus
as Exhibit B*
(10B) Form of Purchase and Sales Agreement pertaining to the
Partnership's acquisition of Local Partnership Interests*
(10C) Form of Amended and Restated Agreement of Limited
Partnership of Local Partnerships*
(27) Financial Data Schedule (filed herewith).
*Incorporated herein as an exhibit by reference to exhibits
filed with Pre-Effective Amendment No. 1 to the Independence Tax Credit Plus
L.P. Registration Statement on Form S-11 (Registration No. 33-37704)
(b) Reports on Form 8-K - No reports on Form 8-K were filed during the
quarter.
16
<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.
INDEPENDENCE TAX CREDIT PLUS L.P.
(Registrant)
By: RELATED INDEPENDENCE
ASSOCIATES L.P., General Partner
By: RELATED INDEPENDENCE
ASSOCIATES INC., General Partner
Date: November 11, 1998
By: /s/ Alan P. Hirmes
-----------------------------------
Alan P. Hirmes,
Senior Vice President
(principal financial officer)
Date: November 11, 1998
By: /s/ Glenn F. Hopps
-----------------------------------
Glenn F. Hopps,
Treasurer
(principal accounting officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial information extracted from the financial
statements for Independence Tax Credit Plus L.P. and is qualified in its
entirety by reference to such financial statements
</LEGEND>
<CIK> 0000869615
<NAME> Independence Tax Credit Plus L.P.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 10,668,120
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,091,200
<PP&E> 182,385,099
<DEPRECIATION> 29,673,058
<TOTAL-ASSETS> 168,145,076
<CURRENT-LIABILITIES> 15,457,961
<BONDS> 102,155,410
0
0
<COMMON> 0
<OTHER-SE> 50,531,705
<TOTAL-LIABILITY-AND-EQUITY> 168,145,076
<SALES> 0
<TOTAL-REVENUES> 9,918,012
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9,814,006
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,558,734
<INCOME-PRETAX> (1,113,737)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 1,340,991
<CHANGES> 0
<NET-INCOME> (1,113,737)
<EPS-PRIMARY> (14.21)
<EPS-DILUTED> 0
</TABLE>
