<PAGE>
FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 33-10122
POLARIS AIRCRAFT INCOME FUND III,
A California Limited Partnership
State of Organization: California
IRS Employer Identification No. 94-3023671
201 Mission Street, 27th Floor, San Francisco, California 94105
Telephone - (415) 284-7400
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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
This document consists of 13 pages.<PAGE>
<PAGE>
POLARIS AIRCRAFT INCOME FUND III,
A California Limited Partnership
FORM 10-Q - For the Quarterly Period Ended September 30, 1994
INDEX
Part I. Financial Information Page
Item 1. Financial Statements
a) Balance Sheets - September 30, 1994 and
December 31, 1993 . . . . . . . . . . . . . . . . . . . . 3
b) Statements of Operations - Three Months and
Nine Months Ended September 30, 1994 and 1993 . . . . . . 4
c) Statements of Changes in Partners' Capital
(Deficit) - Year Ended December 31, 1993
and Nine Months Ended September 30, 1994 . . . . . . . . 5
d) Statements of Cash Flows - Nine Months
Ended September 30, 1994 and 1993 . . . . . . . . . . . . 6
e) Notes to Financial Statements . . . . . . . . . . . . . . 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . 9
Part II. Other Information
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . 11
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 12
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2<PAGE>
<PAGE>
<TABLE>
Part I. Financial Information
Item 1. Financial Statements
POLARIS AIRCRAFT INCOME FUND III,
A California Limited Partnership
BALANCE SHEETS
<CAPTION>
September 30,
1994 December 31,
---- 1993
(Unaudited) ----
<S> <C> <C>
ASSETS:
CASH AND CASH EQUIVALENTS $ 16,764,992 $ 17,047
SHORT-TERM INVESTMENTS, at cost which approximates market value - 29,065,069
------------- ---------------
Total Cash and Cash Equivalents and Short-Term Investments 16,764,992 29,082,116
RENT AND OTHER RECEIVABLES 479,889 659,301
NOTES RECEIVABLE 3,078,133 456,308
AIRCRAFT at cost, net of accumulated depreciation of
$60,901,545 in 1994 and $64,978,597 in 1993 67,357,945 81,448,340
AIRCRAFT INVENTORY 2,693,952 3,281,117
OTHER ASSETS 26,089 26,089
------------- ---------------
$ 90,401,000 $ 114,953,271
============= ===============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT):
PAYABLE TO AFFILIATES $ 86,581 $ 190,747
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 40,504 14,000
MAINTENANCE RESERVES 400,000 400,000
DEFERRED INCOME 521,781 521,781
------------- ---------------
Total Liabilities 1,048,866 1,126,528
------------- ---------------
PARTNERS' CAPITAL (DEFICIT):
General Partner (1,311,693) (1,066,735)
Limited Partners, 500,000 units issued and outstanding 90,663,827 114,893,478
------------- ---------------
Total Partners' Capital 89,352,134 113,826,743
------------- ---------------
$ 90,401,000 $ 114,953,271
============= ===============
The accompanying notes are an integral part of these statements.
</TABLE>
3<PAGE>
<PAGE>
<TABLE>
POLARIS AIRCRAFT INCOME FUND III,
A California Limited Partnership
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------- -------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
Rent from operating leases $ 3,701,359 $ 4,501,552 $ 12,443,489 $ 13,390,017
Interest 427,459 524,169 1,223,638 1,659,434
Gain (loss) on sale of aircraft - 86,887 (3,588,919) 233,387
Other income - - - 25,000
-------------- -------------- -------------- --------------
Total Revenues 4,128,818 5,112,608 10,078,208 15,307,838
-------------- -------------- -------------- --------------
EXPENSES
Depreciation and amortization 2,256,263 2,551,117 7,481,757 10,619,269
Management and advisory fees 185,067 217,042 609,786 646,300
Operating 16,551 76,399 2,664,127 733,117
Administration and other 62,407 49,976 186,036 174,231
-------------- -------------- -------------- --------------
Total Expenses 2,520,288 2,894,534 10,941,706 12,172,917
-------------- -------------- -------------- --------------
NET INCOME (LOSS) $ 1,608,530 $ 2,218,074 $ (863,498) $ 3,134,921
============== ============== ============== ==============
NET INCOME ALLOCATED TO THE GENERAL PARTNER $ 391,049 $ 397,143 $ 2,116,153 $ 906,262
============== ============== ============== ==============
NET INCOME (LOSS) ALLOCATED TO LIMITED PARTNERS $ 1,217,481 $ 1,820,931 $ (2,979,651) $ 2,228,659
============== ============== ============== ==============
NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT $ 2.44 $ 3.64 $ (5.96) $ 4.46
============== ============== ============== ==============
The accompanying notes are an integral part of these statements.
</TABLE>
4<PAGE>
<PAGE>
<TABLE>
POLARIS AIRCRAFT INCOME FUND III,
A California Limited Partnership
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
<CAPTION>
Year Ended December 31, 1993 and
Nine Months Ended September 30, 1994 (Unaudited)
------------------------------------------------
General Limited
Partner Partners Total
------- -------- -----
<S> <C> <C> <C>
Balance, December 31, 1992 $ (954,798) $ 125,962,642 $ 125,007,844
Net income 1,276,953 1,430,836 2,707,789
Cash distributions to partners (1,388,890) (12,500,000) (13,888,890)
----------------- ------------------ ------------------
Balance, December 31, 1993 (1,066,735) 114,893,478 113,826,743
Net income (loss) 2,116,153 (2,979,651) (863,498)
Cash distributions to partners (2,361,111) (21,250,000) (23,611,111)
----------------- ------------------ ------------------
Balance, September 30, 1994 (Unaudited) $ (1,311,693) $ 90,663,827 $ 89,352,134
================= ================== ==================
The accompanying notes are an integral part of these statements.
</TABLE>
5<PAGE>
<PAGE>
<TABLE>
POLARIS AIRCRAFT INCOME FUND III,
A California Limited Partnership
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine Months Ended
September 30,
-------------
1994 1993
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ (863,498) $ 3,134,921
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization 7,481,757 10,619,269
Loss (gain) on sale of aircraft 3,588,919 (233,387)
Changes in operating assets and liabilities:
Decrease (increase) in rent and other receivables 179,412 (570,622)
Decrease in aircraft inventory - 353,806
Increase (decrease) in payable to affiliates (104,166) 2,005
Increase (decrease) in accounts payable and accrued liabilities 26,504 (8,877)
Decrease in deferred income - (1,313,500)
Increase in lessee security deposit - 203,293
Decrease in maintenance reserves - (762,635)
------------- ------------
Net cash provided by operating activities 10,308,928 11,424,273
------------- ------------
INVESTING ACTIVITIES:
Net proceeds from sale of aircraft - 5,428,388
Net proceeds from sale of aircraft inventory 587,165 374,912
Increase in notes receivable (315,145) -
Principal payments on notes receivable 713,039 91,215
------------- ------------
Net cash provided by investing activities 985,059 5,894,515
------------- ------------
FINANCING ACTIVITIES:
Cash distributions to partners (23,611,111) (9,722,224)
------------- ------------
Net cash used in financing activities (23,611,111) (9,722,224)
------------- ------------
CHANGES IN CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (12,317,124) 7,596,564
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS AT BEGINNING OF PERIOD 29,082,116 22,469,106
------------- ------------
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS AT END OF PERIOD $ 16,764,992 $ 30,065,670
============= ============
The accompanying notes are an integral part of these statements.
</TABLE>
6<PAGE>
<PAGE>
POLARIS AIRCRAFT INCOME FUND III,
A California Limited Partnership
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Accounting Principles and Policies
In the opinion of management, the financial statements presented herein include
all adjustments, consisting only of normal recurring items, necessary to
summarize fairly Polaris Aircraft Income Fund III's (the Partnership's)
financial position and results of operations. The financial statements have
been prepared in accordance with the instructions of the Quarterly Report to
the Securities and Exchange Commission (SEC) Form 10-Q and do not include all
of the information and note disclosures required by generally accepted
accounting principles. These statements should be read in conjunction with the
financial statements and notes thereto for the years ended December 31, 1993,
1992, and 1991 included in the Partnership's 1993 Annual Report to the SEC on
Form 10-K (Form 10-K).
Cash and Cash Equivalents - This includes deposits at banks and investments in
money market funds.
2. Trans World Airlines, Inc. (TWA) Reorganization
As part of the TWA lease extension as discussed in the Form 10-K, the
Partnership agreed to share the cost of meeting certain Airworthiness
Directives (ADs) after TWA successfully reorganized. The agreement stipulates
that such costs incurred by TWA may be credited against monthly rentals,
subject to annual limitations and a maximum of $500,000 per aircraft through
the end of the lease. In accordance with the cost sharing agreement, TWA
submitted to the Partnership invoices for expenses paid to date by TWA to meet
the ADs. Expenses totaling $1.95 million were offset against rental payments
during 1993. Additional expenses totaling $2.6 million, which are included in
operating expense in the nine months ended September 30, 1994 statement of
operations, were offset against rental payments due the Partnership in the
first four months of 1994. TWA may offset an additional amount of $1.95
million against rental payments, subject to annual limitations over the lease
terms.
3. Continental Airlines, Inc. (Continental) Lease Modification
As discussed in the Form 10-K, the Continental leases for the Partnership's
three Boeing 727-200 aircraft and five Boeing 727-200 Advanced aircraft were
modified. The modified agreement specifies (i) extension of the leases for the
three 727-200s to the earlier of April 1994 or 60,000 cycles, and for the five
727-200 Advanced aircraft to October 1996; (ii) renegotiated rental rates
averaging approximately 73% of the original lease rates; (iii) payment of
ongoing rentals at the reduced rates beginning in October 1991; (iv) payment of
deferred rentals with interest beginning in July 1992; and (v) payment by the
Partnership of certain aircraft maintenance, modification and refurbishment
costs, not to exceed approximately $3.2 million, a portion of which will be
recovered with interest through payments from Continental over the extended
lease terms. The Partnership's share of such costs will be capitalized and
depreciated over the remaining lease term. The Partnership's balance sheets
reflect the net reimbursable costs incurred of $565,792 and $456,308 as of
September 30, 1994 and December 31, 1993, respectively, as notes receivable.
7<PAGE>
<PAGE>
4. Sale to Continental
The leases of three Boeing 727-200 aircraft to Continental expired on April 30,
1994. In May 1994, the Partnership sold these aircraft to Continental for an
aggregate sale price of $3,019,719. The Partnership agreed to accept payment
of the sale price in 29 monthly installments of $115,500, with interest at a
rate of 9.5% per annum. The Partnership recorded a note receivable for the
sale price and recognized a loss on sale of $3,588,919 in the second quarter of
1994. During the second and third quarters of 1994, the Partnership received
all scheduled payments due under the note. The note receivable balance at
September 30, 1994 was $2,512,341.
5. Related Parties
Under the Limited Partnership Agreement, the Partnership paid or agreed to pay
the following amounts for the current quarter to the general partner, Polaris
Investment Management Corporation, in connection with services rendered or
payments made on behalf of the Partnership:
<TABLE>
<CAPTION>
Payments for
Three Months Ended Payable at
September 30, 1994 September 30, 1994
------------------ ------------------
<S> <C> <C>
Aircraft Management Fees $ 192,943 $ 23,000
Out-of-Pocket Administrative
Expense Reimbursement 48,113 47,030
Out-of-Pocket Maintenance
and Remarketing
Expense Reimbursement 18,738 16,551
------------ -----------
$ 259,794 $ 86,581
============ ===========
</TABLE>
6. Subsequent Event
TWA Proposed Restructuring - TWA, lessee of 13 of the Partnership's McDonnell
Douglas DC-9-30 aircraft, has proposed to its creditors, including the
Partnership, a restructuring of its debt. Such restructuring, if approved,
would include a six-month moratorium on its lease payments to the Partnership
beginning in November 1994. TWA has proposed that a portion of the lease rent
due over that period be paid in common stock of the airline and that the
remainder be deferred and paid in installments over the remaining terms of the
leases. TWA has stated that if it is unable to obtain approvals from its
creditors for the restructuring, it would seek to file a prepackaged bankruptcy
plan under Chapter 11 of the federal Bankruptcy Code.
TWA is continuing its negotiations with its creditors, including the
Partnership. TWA is current on its lease payments to the Partnership through
October 1994. However, should TWA cease lease payments beginning in November
1994 for a period of six months, the negative effect on the Partnership's cash
reserves would be significant. Rental revenues recognized from the
Partnership's leases with TWA currently account for approximately 53% of the
Partnership's total quarterly rental revenues.
8<PAGE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Polaris Aircraft Income Fund III (the Partnership) owns a portfolio of 24 used
commercial jet aircraft out of its original portfolio of 38 aircraft. The
portfolio includes 13 McDonnell Douglas DC-9-30 aircraft leased to Trans World
Airlines, Inc. (TWA) and five Boeing 727-200 Advanced aircraft leased to
Continental Airlines, Inc. (Continental). The portfolio also includes six
Boeing 727-100 aircraft formerly leased to Continental that have been
transferred to aircraft inventory and will be disassembled for sale of their
component parts. Three McDonnell Douglas DC-9-10 aircraft formerly leased to
Midway Airlines, Inc. (Midway) have been transferred to aircraft inventory and
disassembled for sale of their component parts. Of its original aircraft
portfolio, the Partnership sold one former Continental DC-9-10 aircraft in
December 1992, one former Midway DC-9-10 aircraft in January 1993, one former
Aero California S.A. de C.V. DC-9-10 aircraft in September 1993, five of the
former Continental DC-9-10 aircraft at various dates in 1993, and three former
Continental Boeing 727-200 aircraft in May 1994.
Partnership Operations
The Partnership recorded net income of $1,608,530, or $2.44 per limited
partnership unit, for the three months ended September 30, 1994 compared to net
income of $2,218,074, or $3.64 per unit for the same period in 1993. The
Partnership recorded a net loss of $863,498, or $5.96 per limited partnership
unit, for the nine months ended September 30, 1994 compared to net income of
$3,134,921, or $4.46 per unit for the same period in 1993. The net loss for
the nine months ended September 30, 1994 was attributable to the loss of
$3,588,919 recorded in the second quarter of 1994 on the sale of three Boeing
727-200 aircraft to Continental as discussed in the Partnership's Quarterly
Report to the Securities and Exchange Commission (SEC) on Form 10-Q for the
quarterly period ended June 30, 1994.
Rental revenues declined for the three- and nine-month periods ended September
30, 1994 compared to the same periods in 1993. The leases of three Boeing 727-
200 aircraft to Continental expired in April 1994 and the aircraft were
subsequently sold to Continental in May 1994. Interest income also declined
for the three- and nine-month periods ended September 30, 1994 compared to the
same periods in 1993. Interest earned on the rent deferral with Continental
was lower as the balance of the deferred rental amounts owed by Continental has
decreased through monthly payments by Continental. In addition, interest
income earned on the Partnership's cash reserves declined during the first nine
months of 1994, as compared to the same period in 1993, as a result of lower
cash reserve balances partially offset by higher interest rates. The decrease
in total interest income during 1994 was partially offset by interest earned on
the sale of three Boeing 727-200 aircraft to Continental. Revenues for the
nine months ended September 30, 1993 include the gain on the sale of three
aircraft of $233,387 and income from a forfeited deposit of $25,000. Operating
results for the nine months ended September 30, 1994 include the loss on sale
of the three Boeing 727-200 aircraft to Continental as previously discussed.
The Partnership recognized an increase in depreciation expense for declines in
the estimated future value of certain of the Partnership's aircraft during the
first quarter of 1993. No such adjustments were made in 1994. The decrease in
depreciation expense in 1994 as compared to 1993 was partially offset by
increased operating expenses. Operating expenses for the nine months ended
September 30, 1994 substantially increased compared to the same period in 1993
as a result of maintenance expenses incurred from the Partnership's leases to
TWA. As described in Item 7 of the Partnership's 1993 Annual Report to the SEC
on Form 10-K (Form 10-K), the leases with TWA provide for the offset against
rent, subject to certain limits, of maintenance expenses incurred to meet
certain Airworthiness Directives (ADs). During the nine months ended September
30, 1994, TWA offset $2.6 million against rental payments due the Partnership
for such maintenance expenses. The Partnership recognizes the $2.6 million
offsets as operating expense. Operating expenses for the nine months ended
September 30, 1993 reflect the estimated costs of disassembling of the former
Midway and Continental aircraft. No aircraft disassembly expenses were
incurred during the first nine months of 1994.
9<PAGE>
<PAGE>
Liquidity and Cash Distributions
Liquidity - The Partnership has received all lease payments due from TWA and
Continental under the respective modified agreements. The Partnership has
received all scheduled payments due from Continental for the sale of three
Boeing 727-200 aircraft. Payments of $587,165 have been received during the
nine months ended September 30, 1994 from the sale of parts from the three
disassembled aircraft.
As described more fully in Note 6 to the Financial Statements, TWA has
proposed to its creditors, including the Partnership, a restructuring of its
debt. Such restructuring, if approved, would include a six-month moratorium on
its lease payments to the Partnership beginning in November 1994. TWA is
current on its lease payments to the Partnership through October 1994.
However, should TWA cease lease payments beginning in November 1994 for a
period of six months, the negative effect on the Partnership's cash reserves
would be significant. Rental revenues recognized from the Partnership's leases
with TWA currently account for approximately 53% of the Partnership's total
quarterly rental revenues.
As described in Item 7 of the Form 10-K, the Continental leases provide for
payment by the Partnership of the costs of certain maintenance work, AD
compliance, aircraft modification and refurbishment costs, which are not to
exceed approximately $3.2 million, a portion of which will be recovered with
interest through payments from Continental over the lease terms. In accordance
with the Continental leases, the Partnership financed an additional $65,211 for
new image modifications during the third quarter of 1994. The Partnership's
balance sheets reflect as notes receivable such reimbursable costs financed
through September 30, 1994 and December 31, 1993. The Partnership's cash
reserves are being retained to finance additional costs to Continental, to meet
the obligations under the TWA leases, and to cover potential costs of
maintaining and remarketing the Partnership's off-lease aircraft.
Cash Distributions - Cash distributions to limited partners during the three
months ended September 30, 1994 and 1993 were $3,750,000, or $7.50 per limited
partnership unit for each period. Cash distributions to limited partners
during the nine months ended September 30, 1994 were $21,250,000, or $42.50 per
limited partnership unit, compared to $8,750,000, or $17.50 per unit for the
same period in 1993. The timing and amount of future cash distributions will
depend on the Partnership's future cash requirements, continued receipt of the
renegotiated rental payments from Continental and TWA, the receipt of
modification financing payments from Continental, the receipt of payments from
Continental for the sale of three Boeing 727-200 aircraft, and the receipt of
payments generated from the aircraft disassembly process.
10<PAGE>
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
As discussed in Item 3 of Part I of Polaris Aircraft Income Fund III's (the
Partnership) 1993 Annual Report to the Securities and Exchange Commission (SEC)
on Form 10-K (Form 10-K), and in Item 1 of Part II of the Partnership's
Quarterly Reports to the SEC on Form 10-Q for the quarterly periods ended March
31, 1994 and June 30, 1994, respectively, there are a number of pending legal
actions or proceedings to which the Partnership is a party or to which any of
its properties are subject. Except as described below, there have been no
material developments with respect to any such actions or proceedings during
the period covered by this report.
Continental Airlines, Inc. (Continental) - The Partnership continues to
negotiate with Continental regarding administrative claims in Continental's
bankruptcy proceeding.
Vern A. Kepford, et al. v. Prudential Securities, et al. - On July 14, 1994,
plaintiffs filed their Second Amended Original Petition which added plaintiffs.
On July 18, 1994, plaintiffs filed their response and opposition to defendants'
motion for partial summary judgment and also moved for a continuance on the
motion for partial summary judgment. Defendants objections and responses to
Plaintiffs' First Request for Production were filed on July 29, 1994. On
August 11, 1994, after plaintiffs again amended their petition by adding
numerous plaintiffs, the defendants withdrew their summary judgment motion and
motion to stay discovery, without prejudice to refiling these motions at a
later date.
Reuben Riskind, et al. v. Prudential Securities Inc., et al. - On August 31,
1994, plaintiffs filed their Fifth Amended Original Petition adding additional
plaintiffs. On that same day, plaintiffs also filed their Second Plea in
Intervention adding nearly 2,000 plaintiffs. On September 7, 1994, the court
determined to sever from the primary lawsuit four plaintiffs and set the action
for trial on November 7, 1994. On September 29, 1994, defendants removed the
severed action to the United States District Court, Western District of Texas,
Del Rio Division. On October 27, 1994, the action was remanded back to state
court. On October 4, 1994, plaintiffs filed their Sixth Amended Petition
adding as defendants: the Partnership, Polaris Aircraft Income Fund II,
Polaris Aircraft Income Fund IV, Polaris Aircraft Income Fund V, Polaris
Aircraft Income Fund VI, Polaris Holding Company, Polaris Aircraft Leasing
Corporation, Polaris Securities Corporation, General Electric Capital
Corporation, General Electric Financial Services, Inc., and General Electric
Company.
Other Proceedings - Item 10 of Part III of the Partnership's 1993 Form 10-K
discusses certain actions which have been filed against Polaris Investment
Management Corporation and others in connection with the sale of interests in
the Partnership and the management of the Partnership. Except as described
below, there have been no material developments with respect to any of the
other actions described therein during the period covered by this report.
Weisl, et al., v. Polaris Holding Company, et al. - On April 19, 1994, the
Supreme Court of the State of New York, County of New York, granted the
defendants' motion to dismiss the complaint on the grounds that the statute of
limitations barred almost all of the claims in the action. On July 20, 1994,
the court entered an order dismissing almost all of the claims in the complaint
and amended complaint. Certain claims, however, remain pending. Plaintiffs
filed a notice of appeal on September 2, 1994.
11<PAGE>
<PAGE>
Novak, et al. v. Polaris Holding Company, et al. - On August 11, 1994, the
court denied in part and granted in part defendants' motions to dismiss the
purported derivative complaint. Specifically, the court denied the motions as
to the claims for breach of fiduciary duty, but dismissed plaintiffs' claim for
constructive fraud with leave to plaintiffs to replead. On October 7, 1994,
defendants filed a notice of appeal.
Harner, et al. v. Prudential Bache Securities - On September 8, 1994, the Sixth
Circuit affirmed the lower court's decision dismissing the action.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
27. Financial Data Schedules
b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during
the quarter for which this report is filed.
12<PAGE>
<PAGE>
<TABLE>
SIGNATURE
Pursuant to the requirements of section 13 or 15(d) 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.
POLARIS AIRCRAFT INCOME FUND III,
A California Limited Partnership
(Registrant)
By: Polaris Investment
Management Corporation,
General Partner
<S> <C>
November 10, 1994 By: /S/James F. Walsh
- ------------------------------------- --------------------------
James F. Walsh
Chief Financial Officer
(principal financial
officer and principal
accounting officer of
Polaris Investment
Management Corporation,
General Partner of the
Registrant)
</TABLE>
13<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<PERIOD-TYPE> 9-MOS
<CASH> 16764992
<SECURITIES> 0
<RECEIVABLES> 3558022
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 130953442
<DEPRECIATION> 60901545
<TOTAL-ASSETS> 90401000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 89352134
<TOTAL-LIABILITY-AND-EQUITY> 90401000
<SALES> 0
<TOTAL-REVENUES> 10078208
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 10941706
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (863498)
<INCOME-TAX> 0
<INCOME-CONTINUING> (863498)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (863498)
<EPS-PRIMARY> (5.96)
<EPS-DILUTED> 0
</TABLE>
