UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q Quarterly Report
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 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)
=========== =========
December 31, March 31,
1997 1997
----------- ---------
ASSETS
Property and equipment at cost,
net of accumulated depreciation
of $3,096,166 and $1,937,998,
respectively $50,626,249 $47,064,479
Construction in progress 13,789,429 6,147,275
Cash and cash equivalents 6,017,188 7,573,213
Investments available for sale 2,500,000 6,500,000
Cash held in escrow 7,000,557 6,973,508
Deferred costs, net of accumulated
amortization of $191,278 and
$148,841, respectively 1,085,041 1,656,870
Other assets 595,396 576,688
Due from local general partners
and affiliates 0 317,056
---------- ----------
Total assets $81,613,860 $76,809,089
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage notes payable $25,982,511 $23,706,680
Construction loan payable 9,892,228 8,165,460
Accounts payable and other
liabilities 2,395,320 2,463,550
Due to local general partners and
affiliates 5,584,083 3,480,031
Due to general partner and
affiliates 85,690 235,030
---------- -----------
Total liabilities 43,939,832 38,050,751
---------- ----------
Minority interest 1,806,910 1,721,534
----------- -----------
Commitments and contingencies (Note 3)
Partners' capital:
Limited partners (43,440 BACs
issued and outstanding) 35,894,574 37,052,563
General partner (27,456) (15,759)
----------- -----------
Total partners' capital 35,867,118 37,036,804
---------- ----------
Total liabilities and partners'
capital $81,613,860 $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 Nine Months Ended
December 31, December 31,
1997 1996 1997 1996
------------------ ------------------
REVENUES
Rental income $ 882,770 $ 559,059 $2,537,137 $1,760,956
Other income 107,301 172,404 350,556 530,083
--------- --------- --------- ---------
Total revenues 990,071 731,463 2,887,693 2,291,039
--------- --------- --------- ---------
EXPENSES
General and
administrative 286,551 285,966 923,466 820,563
General and
administrative-related
parties (Note 2) 79,423 144,007 269,337 386,193
Repairs and
maintenance 179,109 102,654 379,670 236,612
Operating 85,130 44,654 327,867 274,605
Taxes 41,989 19,092 99,188 60,050
Insurance 74,532 48,071 176,343 122,328
Financial,
principally
interest 240,076 143,605 685,046 437,682
Depreciation and
amortization 404,725 387,348 1,200,605 950,220
--------- --------- --------- ---------
Total expenses 1,391,535 1,175,397 4,061,522 3,288,253
--------- --------- --------- ---------
Net loss before
minority interest (401,464) (443,934) (1,173,829) (997,214)
Minority interest
in loss of
subsidiary
partnerships 2,604 211 4,143 690
----------- ------------ ----------- ------------
Net loss $ (398,860) $ (443,723) $(1,169,686) $ (996,524)
========= ========= ========== =========
Net loss-limited
partners $ (394,871) $ (439,286) $(1,157,989) $ (986,559)
========= ========= ========== =========
Number of BACs
outstanding 43,440 43,440 43,440 43,440
========== ========== =========== ==========
Net loss per BAC $ (9.09) $ (10.11) $ (26.66) $ (22.71)
========== ========== =========== =========
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 (1,169,686) (1,157,989) (11,697)
---------- ---------- --------
Partners' capital -
December 31, 1997 $35,867,118 $35,894,574 $ (27,456)
========== ========== ========
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)
============================
Nine Months Ended
December 31,
1997 1996
----------------------------
Cash flows from operating activities:
Net loss $(1,169,686) $ (996,524)
---------- ---------
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 1,200,605 950,220
Minority interest in loss of subsidiaries (4,143) (690)
Increase (decrease) in accounts
payable and other liabilities 308,125 (732,095)
(Increase) decrease in cash
held in escrow (702,559) 42,905
Increase in other assets (18,708) (58,387)
Increase in due to local general
partners and affiliates 2,750 62,992
Decrease in due to local general
partners and affiliates (32,083) (141,575)
(Decrease) increase in due to
general partner and affiliates (149,340) 78,180
--------- ----------
Total adjustments 604,647 201,550
--------- ---------
Net cash used in operating activities (565,039) (794,974)
--------- ---------
Cash flows from investing activities:
Increase in property
and equipment (571,507) (1,842,910)
Decrease in investments
available for sale 4,000,000 2,002,412
Increase in construction in progress (11,242,960) (7,797,398)
Decrease in cash held
in escrow 675,510 544,497
Decrease in deferred costs 16,122 13,997
(Decrease) increase in accounts
payable and other liabilities (376,355) 398,708
Increase in due to local general
partners and affiliates 2,678,723 454,055
Decrease in due to local general
partners and affiliates (545,338) (1,549,565)
Decrease in due from local general
partners and affiliates 317,056 0
---------- ---------------
Net cash used in
investing activities (5,048,749) (7,776,204)
---------- -----------
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)
=============================
Nine Months Ended
December 31,
1997 1996
-----------------------------
Cash flows from financing activities:
Proceeds from mortgage notes 1,170,346 4,026,715
Repayments of mortgage notes (344,515) (932,413)
Proceeds from construction loans 3,176,768 2,554,522
Repayments of construction loans 0 (1,198,319)
Increase in deferred costs (34,355) (38,192)
Increase in capitalization
of consolidated subsidiaries
attributable to minority interest 89,519 38,387
---------- ----------
Net cash provided by financing
activities 4,057,763 4,450,700
--------- ---------
Net decrease in cash and
cash equivalents (1,556,025) (4,120,478)
Cash and cash equivalents at
beginning of period 7,573,213 9,333,536
--------- ---------
Cash and cash equivalents at
end of period $6,017,188 $5,213,058
========= =========
Supplemental disclosures of noncash
investing and financing activities:
Capitalization of deferred
acquisition costs 547,625 152,961
Conversion of construction notes
payable to mortgage notes payable 1,450,000 0
Property and equipment reclassified
from construction in progress 4,508,671 8,653,823
Consolidation of investment in
subsidiary partnership:*
Decrease in property and equipment 907,865 0
Increase in construction in
progress (907,865) 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
December 31, 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 December 31, 1997, the Partnership has acquired limited partnership
interests in twenty subsidiary partnerships, two of which have not been
consolidated and are shown on the balance sheet, at cost, as property and
equipment. The Partnership does not intend to acquire additional subsidiary
partnerships. Except for the interest in New Zion Apartments, L.P. ("New Zion"),
the Partnership's investment in each subsidiary partnership represents 98.99% of
the partnership interests in the subsidiary partnership. The Partnership's
investment in New Zion represents 41.86% of the partnership interest in the
subsidiary partnership (the other 58.12% limited partnership interest is owned
by an affiliate of the Partnership, with the same management). Through the
rights of the Partnership and/or an affiliate of 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 December 31. All subsidiaries have fiscal
quarters ending September 30. Accounts of the subsidiaries have been adjusted
for intercompany transactions from October 1 through December 31.
7
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. III
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1997
(Unaudited)
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 Partnership. Such losses
aggregated approximately $1,174 and $3,763, and $6,688 and $7,776 for the three
and nine months ended December 31, 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 December 31, 1997, the results of operations for the three and
nine months ended December 31, 1997 and 1996 and cash flows for the nine months
ended December 31, 1997 and 1996. However, the operating results for the nine
months ended December 31, 1997 may not be indicative of the results for the
year.
8
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. III
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1997
(Unaudited)
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 nine months ended
December 31, 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 supervising 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 December 31, 1997 and March 31, 1997,
$2,606,400 of such costs have been incurred, of which $2,509,717 and $1,962,092,
respectively, have been capitalized.
B) Other Related Party Expenses
The costs incurred to related parties for the three and nine months ended
December 31, 1997 and 1996 were as follows:
Three Months Ended Nine Months Ended
December 31, December 31,
1997 1996 1997 1996
--------------------- --------------------
Partnership $12,500 $ 73,934 $ 37,500 $196,815
management fees (a)
Expense 21,500 37,249 94,478 95,074
reimbursement (b)
Property 39,423 28,824 118,359 82,304
management fees (c)
Local administrative 6,000 4,000 19,000 12,000
fee (d) ------- -------- -------- --------
$79,423 $144,007 $269,337 $386,193
====== ======= ======= =======
(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
9
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. III
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1997
(Unaudited)
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 Partner amounting to approximately $282,000 and $245,000 were accrued
and unpaid as of December 31, 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 $64,046
and $41,311, and $176,894 and $113,587 for the three and nine months ended
December 31, 1997 and 1996, respectively. Of these fees $39,423 and $28,824 and
$118,359 and $82,304 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.
10
<PAGE>
INDEPENDENCE TAX CREDIT PLUS L.P. III
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1997
(Unaudited)
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.
11
<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 and interest earned thereon. All these sources of funds are available
to meet obligations of the Partnership.
As of December 31, 1997, the Partnership has invested approximately $34,816,000
(including approximately $3,142,000 classified as a loan repayable from
sale/refinancing proceeds in accordance with the Contribution Agreement and not
including acquisition fees of approximately $2,510,000) of net proceeds in
twenty Local Partnerships of which approximately $7,485,000 remains to be paid
to the Local Partnerships (including approximately $3,106,000 being held in
escrow) as certain benchmarks, such as occupancy level, must be attained prior
to the release of the funds. Three Local Partnership were acquired during the
nine months ended December 31, 1997 for a purchase price of approximately
$7,447,000 (not including an acquisition fee of approximately $548,000) of which
approximately $3,114,000 remains to be paid. In addition, there was an upward
purchase price adjustment during the nine months ended December 31, 1997 in the
amount of $395,000 relating to one Local Partnership which was purchased in a
previous fiscal year. The Partnership does not intend to acquire additional
properties. During the nine months ended December 31, 1997, approximately
$6,163,000 was paid to Local Partnerships, including purchase price adjustments
(of which approximately $328,000 was released from escrow). An additional
$1,789,000 was placed into escrow for purchase price payments during the nine
months ended December 31, 1997. Although the Partnership will not be acquiring
additional properties, the Partnership may be required to fund potential
purchase price adjustments based on tax credit adjustor clauses. Such
adjustments resulted in a net increase in purchase price of approximately
$151,000 during the nine months ended December 31, 1997 based on tax credit
adjustor clauses.
For the nine months ended December 31, 1997, cash and cash equivalents of the
Partnership and its eighteen consolidated Local Partnerships decreased
approximately $1,556,000 primarily due to cash used in operating activities
($565,000), an increase in construction in progress ($11,243,000), an increase
in property and equipment ($572,000) and a decrease in accounts payable and
other liabilities relating to investing activities ($376,000) which
12
<PAGE>
exceeded net proceeds from mortgage and construction loans ($4,003,000), a
decrease in investments available for sale ($4,000,000), a net increase in due
to local general partners and affiliates relating to investing activities
($2,133,000), a decrease in cash held in escrow relating to investing activities
($676,000), 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
$1,201,000.
The working capital reserve at December 31, 1997 and March 31, 1997 was
approximately $1,103,000 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 nine months ended December 31, 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 $282,000 and $245,000 were accrued and unpaid as of December 31,
1997 and March 31, 1997, respectively (see note 2).
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 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 December 31, 1997 and
March 31, 1997, the gross amount of the Operating Deficit Guarantees aggregates
approximately $5,139,000 and $3,360,000, respectively.
13
<PAGE>
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 twenty 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.
Results of Operations
As of December 31, 1997 and 1996, the Partnership had acquired an interest in
twenty and sixteen Local Partnerships, eighteen and fifteen of which were
consolidated, respectively. The Partnership does not intend to acquire
additional interests in Local Partnerships.
14
<PAGE>
The Partnership's results of operations for the three and nine months ended
December 31, 1997 and 1996 consisted primarily of (1) approximately $67,000 and
$130,000, and $249,000 and $428,000, 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 seventeen of eighteen and thirteen of fifteen
consolidated Local Partnerships, respectively.
For the three and nine months ended December 31, 1997 as compared to 1996,
rental income and all categories of expenses except general and
administrative-related parties 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 $65,000 and $180,000
for the three and nine months ended December 31, 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 $65,000 and $117,000 for
the three and nine months ended December 31, 1997 as compared to 1996, primarily
due to a decrease in partnership management fees payable to the General Partner.
For the three months ended December 31, 1997 and 1996, two and one of the
Partnership's eighteen and fifteen consolidated properties, respectively,
completed construction, and were in various stages of rent up. In addition, zero
and one 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 December 31, 1997 and 1996, fourteen
and ten of the properties had completed construction and were rented up in a
previous fiscal quarter. For the nine months ended December 31, 1997 and 1996,
two and five 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 nine months. Also for the nine months ended December 31, 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 nine months ended December 31,
1997 and 1996, two and three of the Partnership's eighteen and
15
<PAGE>
fifteen consolidated properties, respectively, were still under construction and
four and five of the properties, respectively, had construction loans with
commitments for permanent financing.
16
<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}
17
<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.
18
<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: February 9, 1998
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes,
Vice President
(principal financial officer)
Date: February 9, 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. 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>
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<PERIOD-START> APR-01-1997
<PERIOD-END> DEC-31-1997
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0
0
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</TABLE>
