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, 1997
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-24650
INDEPENDENCE TAX CREDIT PLUS L.P. III
-------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3746339
- - ------------------------------- -------------------
(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. III
AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
============ ===========
September 30, March 31,
1997 1997
------------ -----------
ASSETS
Property and equipment at cost,
net of accumulated depreciation
of $2,704,451 and $1,937,998,
respectively $50,254,004 $47,064,479
Construction in progress 10,541,498 6,147,275
Cash and cash equivalents 6,095,017 7,573,213
Investments available for sale 4,500,000 6,500,000
Cash held in escrow 6,519,095 6,973,508
Deferred costs, net of accumulated
amortization of $178,268 and
$148,841, respectively 1,458,352 1,656,870
Other assets 610,488 576,688
Due from local general partners
and affiliates 0 317,056
----------- -----------
Total assets $79,978,454 $76,809,089
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage notes payable $25,465,633 $23,706,680
Construction loan payable 8,384,297 8,165,460
Accounts payable and other
liabilities 2,211,437 2,463,550
Due to local general partners and
affiliates 5,598,947 3,480,031
Due to general partner and
affiliates 242,648 235,030
----------- -----------
Total liabilities 41,902,962 38,050,751
----------- -----------
Minority interest 1,809,514 1,721,534
----------- -----------
Commitments and contingencies (Note 3)
Partners' capital:
Limited partners (43,440 BACs
issued and outstanding) 36,289,445 37,052,563
General partner (23,467) (15,759)
----------- -----------
Total partners' capital 36,265,978 37,036,804
----------- -----------
Total liabilities and partners'
capital $79,978,454 $76,809,089
=========== ===========
See Accompanying Notes to Consolidated Financial Statements
2
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. III
AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
======================== ========================
Three Months Ended Six Months Ended
September 30, September 30,
------------------------ ------------------------
1997 1996 1997 1996
------------------------ ------------------------
Revenues
Rental income $ 872,497 $ 614,647 $1,654,367 $1,201,897
Other income 114,556 175,716 243,255 357,679
---------- ---------- ---------- ----------
Total revenues 987,053 790,363 1,897,622 1,559,576
---------- ---------- ---------- ----------
Expenses
General and
administrative 354,231 274,960 636,915 534,597
General and
administrative-
related parties
(Note 2) 86,217 114,359 189,914 242,186
Repairs and
maintenance 122,933 78,781 200,561 133,958
Operating 114,118 79,288 242,737 229,951
Taxes 19,070 24,451 57,199 40,958
Insurance 28,418 25,045 101,811 74,257
Financial, principally
interest 229,873 145,790 444,970 294,077
Depreciation and
amortization 412,726 312,096 795,880 562,872
---------- ---------- ---------- ----------
Total expenses 1,367,586 1,054,770 2,669,987 2,112,856
---------- ---------- ---------- ----------
Net loss before
minority interest (380,533) (264,407) (772,365)
Minority interest in
loss of subsidiary
partnerships 1,226 452 1,539 479
---------- ---------- ---------- ----------
Net loss $ (379,307) $ (263,955) $ (770,826) $ (552,801)
========== ========== ========== ==========
Net loss -
limited partners $ (375,514) $ (261,315) $ (763,118) $ (547,273)
========== ========== ========== ==========
Number of BACs
outstanding 43,440 43,440 43,440 43,440
========== ========== ========== ==========
Net loss
per BAC $ (8.65) $ (6.02) $ (17.57) $ (12.60)
========== ========== ========== ==========
See Accompanying Notes to Consolidated Financial Statements
3
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. III
AND SUBSIDIARIES
Consolidated Statement of Changes in Partners' Capital
(Unaudited)
========================================
Limited General
Total Partners Partner
----------------------------------------
Partners' capital -
April 1, 1997 $37,036,804 $37,052,563 $(15,759)
Net loss (770,826) (763,118) (7,708)
----------- ----------- --------
Partners' capital -
September 30, 1997 $36,265,978 $36,289,445 $(23,467)
=========== =========== ========
See Accompanying Notes to Consolidated Financial Statements
4
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. III
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
===========================
Six Months Ended
September 30,
---------------------------
1997 1996
---------------------------
Cash flows from operating activities:
Net loss $ (770,826) $ (552,801)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 795,880 562,872
Minority interest in loss of subsidiaries (1,539) (479)
Increase (decrease) in accounts
payable and other liabilities 131,240 (457,315)
Increase in cash
held in escrow (533,039) (21,033)
Increase in other assets (33,800) (627,711)
Increase in due to local general
partners and affiliates 2,000 47,919
Decrease in due to local general
partners and affiliates (32,809) (142,326)
Increase in due to general partner
and affiliates 7,618 124,887
----------- -----------
Total adjustments 335,551 (513,186)
----------- -----------
Net cash used in operating activities (435,275) (1,065,987)
----------- -----------
Cash flows from investing activities:
Increase in property
and equipment (835,528) (207,585)
Decrease in investments
available for sale 2,000,000 1,402,412
Increase in construction in progress (7,325,538) (5,832,844)
Decrease in cash held
in escrow 987,452 1,963,813
Decrease in deferred costs 14,311 28,330
(Decrease) increase in accounts
payable and other liabilities (383,353) 336,926
Increase in due to local general
partners and affiliates 2,674,421 42,792
Decrease in due to local general
partners and affiliates (524,696) (1,297,178)
Decrease in due from local general
partners and affiliates 317,056 0
----------- -----------
Net cash used in
investing activities (3,075,875) (3,563,334)
----------- -----------
See Accompanying Notes to Consolidated Financial Statements
5
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. III
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
(continued)
(Unaudited)
========================
Six Months Ended
September 30,
------------------------
1997 1996
------------------------
Cash flows from financing activities:
Proceeds from mortgage notes 630,544 3,038,686
Repayments of mortgage notes (321,591) (910,678)
Proceeds from construction loans 1,668,837 2,466,603
Repayments of construction loans 0 (838,223)
Increase in deferred costs (34,355) (23,192)
Increase (decrease) in capitalization
of consolidated subsidiaries
attributable to minority interest 89,519 (16,787)
---------- ----------
Net cash provided by financing
activities 2,032,954 3,716,409
---------- ----------
Net decrease in cash and
cash equivalents (1,478,196) (912,912)
Cash and cash equivalents at
beginning of period 7,573,213 9,333,536
---------- ----------
Cash and cash equivalents at
end of period $6,095,017 $8,420,624
========== ==========
Supplemental disclosures of noncash
investing and financing activities:
Capitalization of deferred
acquisition costs 189,135 0
Conversion of construction notes
payable to mortgage notes
payable 1,450,000 0
Property and equipment reclassified
from construction in progress 4,508,671 2,035,087
Consolidation of investment in
subsidiary partnership:*
Decrease in property and
equipment 1,577,356 0
Increase in construction in
progress (1,577,356) 0
*Prior to consolidation, investments in subsidiary partnerships are included in
property and equipment.
See Accompanying Notes to Consolidated Financial Statements
6
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. III
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997
(Unaudited)
Note 1 - General
Independence Tax Credit Plus L.P. III (a Delaware limited partnership) (the
"Partnership") was organized on December 23, 1993, and commenced the public
offering on June 7, 1994. The general partner of the Partnership is Related
Independence Associates III L.P., a Delaware limited partnership (the "General
Partner").
The Partnership's business is to invest in other partnerships ("Local
Partnerships", "subsidiaries" or "subsidiary partnerships") owning apartment
complexes that are eligible for the low-income housing tax credit ("Housing Tax
Credit") enacted in the Tax Reform Act of 1986, some of which complexes may also
be eligible for the historic rehabilitation tax credit ("Historic Tax Credit";
together with Housing Tax Credits, "Tax Credits").
As of September 30, 1997, the Partnership has acquired limited partnership
interests in eighteen subsidiary partnerships. The Partnership anticipates
acquiring limited partnership interests in additional subsidiary partnerships in
the future. 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.
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.
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 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
7
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. III
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997
(Unaudited)
Partnership. Such losses aggregated approximately $2,357 and $1,608, and $5,514
and $4,013 for the three and six months ended September 30, 1997 and 1996,
respectively. The Partnership's investment in each subsidiary is equal to the
respective subsidiary's partners' 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 disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have 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,
1997.
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 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 September 30, 1997, the results of operations for the three
and six months ended September 30, 1997 and 1996 and cash flows for the six
months ended September 30, 1997 and 1996. However, the operating results for the
six months ended September 30, 1997 may not be indicative of the results for the
year.
Note 2 - Related Party Transactions
An affiliate of the General Partner has a .01% interest as a special limited
partner, in each of the Local Partnerships.
The costs incurred to related parties for the three and six months ended
September 30, 1997 and 1996 were as follows:
A) Acquisition Fees and Expenses
The General Partner was entitled to a consulting and monitoring fee equal to
6.0% of the gross proceeds of the offering paid upon investor closings, for its
services in connection with assisting the Local Partnerships in acquiring
apartment complexes and super-
8
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. III
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997
(Unaudited)
vising the construction of the complexes. Such fees will be capitalized as a
cost of the investments upon closing of subsidiary partnership acquisitions. As
of both September 30, 1997 and March 31, 1997, $2,606,400 of such costs have
been incurred, of which $2,151,227 and $1,962,092, respectively, have been
capitalized.
B) Other Related Party Expenses
The costs incurred to related parties for the three and six months ended
September 30, 1997 and 1996 were as follows:
Three Months Ended Six Months Ended
September 30, September 30,
--------------------- ---------------------
1997 1996 1997 1996
--------------------- ---------------------
Partnership
management
fees (a) $ 12,500 $ 61,430 $ 25,000 $122,881
Expense
reimburse-
ment (b) 27,526 21,595 72,978 57,825
Property manage-
ment fees (c) 39,191 27,334 78,936 53,480
Local adminis-
trative fees (d) 7,000 4,000 13,000 8,000
-------- -------- -------- --------
$ 86,217 $114,359 $189,914 $242,186
======== ======== ======== ========
(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 will be accrued without interest and will be
payable from working capital reserves or 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
9
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. III
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997
(Unaudited)
Partner amounting to approximately $270,000 and $245,000 were accrued and unpaid
as of September 30, 1997 and March 31, 1997, respectively.
(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 by Local Partnerships amounted to $59,902
and $37,640, and $112,848 and $72,276 for the three and six months ended
September 30, 1997 and 1996, respectively. Of these fees $39,191 and $27,334 and
$78,936 and $53,480 were incurred to affiliates of the subsidiary partnerships'
general partners.
(d) Independence SLP III L.P., a special limited partner of the subsidiary
partnerships, is entitled to receive a local administrative fee of up to $5,000
per year from each subsidiary partnership.
Note 3 - Commitments and Contingencies
There were no 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, 1997.
10
<PAGE>
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) interest earned on Gross
Proceeds which are invested in tax-exempt money market instruments pending
acquisition of and final payments to Local Partnerships and (ii) working capital
reserves in the original amount of 2.5% of gross proceeds raised and interest
earned thereon. All these sources of funds are available to meet obligations of
the Partnership. The offering terminated as of May 9, 1995. The Partnership has
received $43,440,000 in gross proceeds for BACs pursuant to a public offering
resulting in net proceeds available for investment of approximately $34,535,000
after payment of sales commissions, acquisition fees and expenses, organization
and offering expenses and establishment of a working capital reserve.
As of September 30, 1997, the Partnership has invested approximately $29,725,000
(including approximately $2,950,000 classified as a loan repayable from
sale/refinancing proceeds in accordance with the Contribution Agreement and not
including acquisition fees of approximately $2,151,000) of net proceeds in
eighteen Local Partnerships of which approximately $5,360,000 remains to be paid
to the Local Partnerships (including approximately $1,675,000 being held in
escrow) as certain benchmarks, such as occupancy level, must be attained prior
to the release of the funds. One Local Partnership was acquired during the six
months ended September 30, 1997 for a purchase price of approximately $2,506,000
(not including an acquisition fee of approximately $189,000) of which
approximately $106,000 remains to be paid. In addition, there was an upward
purchase price adjustment during the six months ended September 30, 1997 in the
amount of $395,000 relating to a Local Partnership which was purchased in a
previous fiscal year. The Partnership has approximately $4,810,000 available for
future investments. During the six months ended September 30, 1997,
approximately $3,388,000 was paid to Local Partnerships (of which approximately
$328,000 was released from escrow). An additional $358,000 was placed into
escrow for purchase price payments during the six months ended September 30,
1997. The Partnership will be acquiring interests in additional properties, and
the Partnership may be required to fund potential purchase price adjustments
based on tax credit adjustor clauses. There have been no purchase price
adjustments during the six months ended September 30, 1997 based on tax credit
adjustor clauses.
11
<PAGE>
For the six months ended September 30, 1997, cash and cash equivalents of the
Partnership and its eighteen consolidated Local Partnerships decreased
approximately $1,478,000 primarily due to cash used in operating activities
($435,000), an increase in construction in progress ($7,326,000), an increase in
property and equipment ($836,000) and a decrease in accounts payable and other
liabilities relating to investing activities ($383,000) which exceeded net
proceeds from mortgage and construction loans ($1,978,000), a decrease in
investments available for sale ($2,000,000), a net increase in due to local
general partners and affiliates relating to investing activities ($2,150,000), a
decrease in cash held in escrow relating to investing activities ($987,000), a
decrease in due from local general partners and affiliates relating to investing
activities ($317,000) and an increase in capitalization of consolidated
subsidiaries attributable to minority interest ($90,000). Included in the
adjustments to reconcile the net loss to cash used in operating activities is
depreciation and amortization in the amount of approximately $796,000.
A working capital reserve in the amount of approximately $1,086,000 (2.5% of
gross equity) was established from the Partnership's funds available for
investment. The working capital reserve at September 30, 1997 and March 31, 1997
was approximately $1,095,000 and $872,000, respectively, which includes amounts
which may be required for potential purchase price adjustments based on tax
credit adjustor clauses. The General Partner believes that these reserves, plus
any cash distributions received from the operations of the Local Partnerships
will be sufficient to fund the Partnership's ongoing operations for the
foreseeable future. During the six months ended September 30, 1997 and 1996, the
Partnership received cash flow distributions from operations of the Local
Partnerships amounting to approximately $4,000 and $2,000, respectively.
Management anticipates continuing to receive distributions in the future,
although not to a level sufficient to permit providing cash distributions to the
BACs holders.
Partnership management fees owed to the General Partner amounting to
approximately $270,000 and $245,000 were accrued and unpaid as of September 30,
1997 and March 31, 1997, respectively.
The Partnership has negotiated development deficit guarantees with the Local
Partnerships in which it has invested. The Local General Partners have agreed to
fund development deficits through the breakeven dates of each of the Local
Partnerships.
The Partnership has negotiated Operating Deficit Guaranty Agreements with all
Local Partnerships by which the general partners of the Local Partnerships have
agreed to fund operating
12
<PAGE>
deficits for a specified period of time. The terms of the Operating Deficit
Guaranty Agreements vary for each Local Partnership, with maximum dollar amounts
to be funded for a specified period of time, generally three years, commencing
on the break-even date. As of September 30, 1997 and March 31, 1997, the gross
amount of the Operating Deficit Guarantees aggregates approximately $3,498,000
and $3,360,000, respectively.
The Partnership has also negotiated rent-up guaranty agreements in which the
Local General Partners agreed to pay a liquidated damage if predetermined
occupancy rates are not achieved.
The development deficit, operating deficit and the rent-up guaranty agreements
were negotiated to protect the Partnership's interest in the Local Partnerships
and to provide incentive to the Local General Partners to generate positive cash
flow.
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 subsidiary 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 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 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 invested the proceeds of its offering
in eighteen 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 such ten year
period. If the General Partner determined that a sale of a property is
warranted, the remaining tax credits would transfer to the new owner, thereby
adding value to the property on the market, which are not included in the
financial statement carrying amount.
13
<PAGE>
Results of Operations
- - ---------------------
As of September 30, 1997 and 1996, the Partnership had acquired an interest in
eighteen and fifteen Local Partnerships, respectively, all of which were
consolidated at September 30, 1997 and 1996. The Partnership intends to utilize
the net proceeds of the offering to acquire additional interests in Local
Partnerships.
The Partnership's results of operations for the three and six months ended
September 30, 1997 and 1996 consisted primarily of (1) approximately $88,000 and
$142,000, and $182,000 and $298,000, respectively, of tax-exempt interest income
earned on funds not currently invested in Local Partnerships and (2) the results
of the Partnership's investment in fifteen of eighteen and eleven of fifteen
consolidated Local Partnerships, respectively.
For the three and six months ended September 30, 1997 as compared to 1996,
rental income and all categories of expenses except general and
administrative-related parties and taxes increased and the results of operations
are not comparable due to the continued acquisition, construction and rent up of
properties, and are not reflective of future operations of the Partnership due
to uncompleted property construction, rent up of properties and the continued
utilization of the net proceeds of the offering to invest in Local Partnerships.
In addition, interest income will decrease in future periods since a substantial
portion of the proceeds from the Offering will be invested in or released to
Local Partnerships. Other income decreased approximately $61,000 and $114,000
for the three and six months ended September 30, 1997 as compared to 1996
primarily due to a decrease in interest income as a result of the acquisition of
and the release of proceeds to the Local Partnerships. General and
administrative-related parties decreased approximately $28,000 and $52,000 for
the three and six months ended September 30, 1997 as compared to 1996, primarily
due to a decrease in partnership management fees payable to the General Partner.
Taxes decreased approximately $5,000 for the three months ended September 30,
1997 as compared to 1996, primarily due to an overstatement of real estate taxes
at one Local Partnership in the first quarter of 1997 which was corrected in the
second quarter.
For the three months ended September 30, 1997 and 1996, zero and one of the
Partnership's eighteen and fifteen consolidated properties, respectively,
completed construction, and were in various stages of rent up. In addition, one
and three of the properties, respectively, had completed construction in a
previous fiscal quarter, but were in various stages of rent up for the three
months. Also, for the three months ended September 30, 1997 and 1996, thirteen
and seven of the properties had completed construction and were rented up in a
previous fiscal quarter. For the six
14
<PAGE>
months ended September 30, 1997 and 1996, zero and four of the Partnerships
eighteen and fifteen consolidated properties, respectively, completed
construction, and were in various stages of rent up. In addition, two and zero
of the properties, respectively, had completed construction in a previous fiscal
year, but were in various stages of rent up for the six months. Also for the six
months ended September 30, 1997 and 1996, twelve and seven of the properties had
completed construction and were rented up in a previous fiscal year. As of the
end of the six months ended September 30, 1997 and 1996, four and four of the
Partnership's eighteen and fifteen consolidated properties, respectively, were
still under construction and four and five of the properties, respectively, had
construction loans with commitments for permanent financing.
15
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - The litigation described in Note 3 to the financial
statements contained in Part I, Item 1 of this quarterly report on Form
10-Q is incorporated herein by reference.
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) Agreement of Limited Partnership of Independence Tax Credit
Plus L.P. III as adopted on December 23, 1993*
(3B) Form of Amended and Restated Agreement of Limited Partnership
of Independence Tax Credit Plus L.P. III, attached to the Prospectus as Exhibit
A**
(3C) Certificate of Limited Partnership of Independence Tax Credit
Plus L.P. III as filed on December 23, 1993*
(10A) Form of Subscription Agreement attached to the Prospectus as
Exhibit B**
(10B) Escrow Agreement between Independence Tax Credit Plus L.P. III
and Bankers Trust Company*
(10C) Form of Purchase and Sales Agreement pertaining to the
Partnership's acquisition of Local Partnership Interests*
(10D) 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 Post-Effective Amendment No. 4 to the Registration Statement on Form S-11
{Registration No. 33-37704}
16
<PAGE>
**Incorporated herein as an exhibit by reference to exhibits filed
with Post-Effective Amendment No. 8 to the 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 this
quarter.
17
<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. III
-------------------------------------
(Registrant)
By: RELATED INDEPENDENCE
ASSOCIATES III L.P., General Partner
By: RELATED INDEPENDENCE
ASSOCIATES III INC., General Partner
Date: November 13, 1997
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes,
Vice President
(principal financial officer)
Date: November 13, 1997
By: /s/ Richard A. Palermo
----------------------
Richard A. Palermo,
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. III and is
qualified in its entirety by reference to such
financial statements
</LEGEND>
<CIK> 0000924124
<NAME> Independence Tax Credit Plus L.P. III
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-1-1997
<PERIOD-END> SEP-30-1997
<CASH> 12,614,112
<SECURITIES> 4,500,000
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 610,488
<PP&E> 63,499,953
<DEPRECIATION> 2,704,451
<TOTAL-ASSETS> 79,978,454
<CURRENT-LIABILITIES> 8,053,032
<BONDS> 33,849,930
0
0
<COMMON> 0
<OTHER-SE> 38,075,492
<TOTAL-LIABILITY-AND-EQUITY> 79,978,454
<SALES> 0
<TOTAL-REVENUES> 1,897,622
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,225,017
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 444,970
<INCOME-PRETAX> (772,365)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (772,365)
<EPS-PRIMARY> (17.57)
<EPS-DILUTED> 0
</TABLE>
