FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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 number 33-21267
CSA Income Fund Limited Partnership III
(Exact name of registrant as specified in its charter)
Massachusetts 04-3002909
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
22 Batterymarch St., Boston, Massachusetts 02109
(Address of principal executive offices) (Zip Code)
(617) 357-1700
(Registrant's telephone number, including area code)
Former name, former address and former fiscal year,
if changed since last report
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 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
CSA INCOME FUND LIMITED PARTNERSHIP III
<TABLE>
CSA INCOME FUND LIMITED PARTNERSHIP III
STATEMENTS OF FINANCIAL POSITION AS OF JUNE 30, 1997 (UNAUDITED) AND
DECEMBER 31, 1996.
<CAPTION>
(Unaudited)
June 30, December 31,
1997 1996
<S> <C> <C>
Assets
Cash and cash equivalents $ 428,569 $ 450,785
Rentals receivable 79,455 128,676
Accounts receivable-affiliates 102,350 1,140,003
Notes receivable-lessee 21,781 39,118
Remarketing receivables 171,740 42,808
Rental equipment, at cost 36,234,984 35,231,829
Less accumulated depreciation (11,284,638) (11,121,318)
Net rental equipment 24,950,346 24,110,511
Total assets $ 25,754,241 $ 25,911,901
Liabilities and partners' capital
Accounts payable-other $ 19,891 $ 25,064
Accrued management fees 39,378 29,853
Deferred income 111,579 206,291
Notes payable 17,216,264 16,116,034
Total liabilities 17,387,112 16,377,242
Partners' capital:
General Partner:
Capital contribution 1,000 1,000
Cumulative net income 223,376 12,047
Cumulative cash distributions (376,815) (361,663)
(152,439) (348,616)
Limited Partners (500,000 units):
Capital contributions net of
offering costs 44,539,778 44,539,778
Cumulative net income 1,329,005 1,192,712
Cumulative cash distributions (37,349,215) (35,849,215)
8,519,568 9,883,275
Total Partners' capital 8,367,129 9,534,659
Total liabilities and
partners' capital $ 25,754,241 $ 25,911,901
</TABLE>
<PAGE>
<TABLE>
CSA INCOME FUND LIMITED PARTNERSHIP III
STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE AND SIX MONTH
PERIODS ENDED JUNE 30, 1997 AND 1996
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 2,833,935 $ 1,681,627 $ 5,300,538 $ 3,344,418
Interest income 6,747 23,240 19,777 80,645
Gain on sale
of equipment 139,880 332,190 211,329 259,089
Exchange gain (loss)
on foreign currency 2,292 (1,057) 4,437 (1,736)
Total revenues 2,982,854 2,036,000 5,536,081 3,682,416
Costs and expenses:
Depreciation and
amortization 2,265,828 1,395,275 4,245,680 2,553,098
Interest 326,663 118,552 580,890 233,731
Management fees 141,697 84,081 265,027 167,221
Storage and
Refurbishment 1,253 7,000 3,253 12,000
General and
administrative 49,400 39,222 93,609 79,709
Total expenses 2,784,841 1,644,130 5,188,459 3,045,759
Net income $ 198,013 $ 391,870 $ 347,622 $ 636,657
Net income allocation:
General Partner $ 139,880 $ 3,919 $ 211,329 $ 6,367
Limited Partners 58,133 387,951 136,293 630,290
$ 198,013 $ 391,870 $ 347,622 $ 636,657
Net income per
Limited Partnership
Unit $ .11 $ .78 $ .27 $ 1.26
Number of Limited
Partnership Units 500,000 500,000 500,000 500,000
</TABLE>
<PAGE>
<TABLE>
CSA INCOME FUND LIMITED PARTNERSHIP III
STATEMENTS OF CASH FLOWS(UNAUDITED) FOR THE THREE AND SIX MONTH
PERIODS ENDED JUNE 30, 1997 AND 1996
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Cash flows from
operations:
Cash received from
rental of
equipment $ 2,781,302 $ 1,672,902 $ 5,237,448 $ 2,877,337
Cash paid for
operating and
management
expenses (184,579) (156,159) (357,537) (285,355)
Interest paid (326,663) (112,094) (580,890) (221,226)
Interest received 6,747 20,525 19,777 90,604
Net cash from
operations 2,276,807 1,425,174 4,318,798 2,461,360
Cash flow from
investments:
Purchase of equipment (157,247) (4,925,192) (5,628,169) (9,318,385)
Sale of equipment 268,375 1,165,963 647,087 1,451,596
Net cash from
(used by)
investments 111,128 (3,759,229) (4,981,082) (7,866,789)
Cash flows from financing:
Proceeds from notes
receivable 10,489 - 17,337 -
Accounts payable
equipment - (1,331,217) - -
Advances to/from
affiliates (2,888,944) (2,474,079) 1,037,653 (1,753,468)
Proceeds from notes
payable 3,617,836 4,749,792 5,260,094 4,749,792
Repayment of notes
payable (2,164,135) (764,403) (4,159,864) (1,431,121)
Payment of cash
distributions (757,576) (757,576) (1,515,152) (1,515,152)
Net cash from
(used by)
financing (2,182,330) (577,483) 640,068 50,051
Net change in cash 205,605 (2,911,538) (22,216) (5,355,378)
Cash at beginning of
period 222,964 3,767,145 450,785 6,210,985
Cash at end of period $ 428,569 $ 855,607 $ 428,569 $ 855,607
</TABLE>
<PAGE>
CSA INCOME FUND LIMITED PARTNERSHIP III
NOTE TO FINANCIAL STATEMENTS
The quarterly financial statements of the Partnership presented herein
are without audit except for the December 31, 1996 balance sheet
information. Certain information and footnote disclosure normally included
in the annual financial statements have been condensed or omitted from the
accompanying statements. For such information, reference should be made
to the financial statements and notes thereto included in the
Partnership's annual report on Form 10-K for the year ended December 31,
1996.
In the General Partner's opinion, the unaudited financial statements
reflect all adjustments necessary to present fairly the financial
position of CSA Income Fund Limited Partnership III as of June 30, 1997
and June 30, 1996 and the results of operations and cash flows for the
periods presented therein.
<PAGE>
CSA INCOME FUND LIMITED PARTNERSHIP III
GENERAL PARTNER'S DISCUSSION OF OPERATIONS
Gross rental income was $2,833,935 and $1,681,627 and net income was
$198,013 and $391,870 for the quarters ended June 30, 1997 and 1996,
respectively. For the six months ended June 30, 1997 and June 30,1996,
gross rental income was $5,300,538 and $3,344,418 and net income was
$347,622 and $636,657, respectively. The increase in gross rental income
was primarily due to the $25,321,247 of new equipment leased during 1996
and 1997. The net income decrease is primarily attributable to the
increase in depreciation expense associated with the new equipment
leases.
The Partnership generated $4,965,885 in cash flow from operations and
sale of equipment during the six months ended June 30, 1997. The
Partnership used these funds and proceeds from equipment financings to
acquire additional equipment of $5,628,169, make payments on notes
payable of $4,159,864 and make distributions to partners of $1,515,152.
The General Partner of CSA Income Fund Limited Partnership III informed
the Limited Partners in the Partnership's 1996 10-K and Annual Report
that the Partnership would begin the wind-up process of the Partnership
in 1997, which process is currently anticipated to be completed in 1998.
In accordance with Section 8.3 (c) of the Partnership Agreement,
accounting profits from the sale of equipment that result in the
dissolution of the Partnership shall be allocated first to the negative
balance of any Partners' Capital Account. For this reason, certain gains
on the disposition of Partnership assets were allocated during the second
quarter of 1997 to the General Partner to reduce its negative Capital
Account.
The Partnership distributed $.50 per Limited Partnership Unit on the 15th
of April, May, and June. To date, the Partnership has made cash
distributions to the Limited Partners ranging from 67% to 83% of their
initial investment, depending on when the Limited Partner entered the
Partnership. The objective of the Partnership is to return the Limited
Partners' investment through current cash distributions and provide a
return on this investment by continued distributions as long as the
equipment continues to be leased. As previously reported certain revenues
generated by the Partnership from lease renewals and remarketings after
the initial lease terms were lower than anticipated as a result of more
rapid obsolescence in high technology equipment. Also as previously
reported, The General Partner continues to estimate that continued cash
distributions may not fully return the entire initial investment of the
Limited Partners and/or a return thereon. The General Partner will
continue to report on the Limited Partners' return of investment with
each cash distribution.
<PAGE>
CSA INCOME FUND LIMITED PARTNERSHIP III
PART II
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 - Exhibit 27. Financial Data Schedule.
(b) Reports on Form 8-K - No reports have been filed on Form
8-K during this quarter.
<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.
CSA Income Fund Limited
Partnership III (Registrant)
By its General Partner,
CSA Equity Funds, Inc.
Date:
/s/ J. Frank Keohane
President and
Principal Executive Officer
Date:
/s/ Richard P. Timmons
Controller
Principal Accounting and
Finance Officer
Form 10-Q - Page 8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from CSA Income
Fund Limited Partnership III's Statement of Financial Position as of June 30,
1997 and Statement of Operations for the six months then ended and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 428,569
<SECURITIES> 0
<RECEIVABLES> 375,326
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 36,234,984
<DEPRECIATION> 11,284,638
<TOTAL-ASSETS> 25,754,241
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 8,367,129
<TOTAL-LIABILITY-AND-EQUITY> 25,754,241
<SALES> 0
<TOTAL-REVENUES> 5,536,081
<CGS> 4,513,960
<TOTAL-COSTS> 5,188,459
<OTHER-EXPENSES> 93,609
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 580,890
<INCOME-PRETAX> 347,622
<INCOME-TAX> 0
<INCOME-CONTINUING> 347,622
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 347,622
<EPS-PRIMARY> .27
<EPS-DILUTED> .27
<FN>
<F1>The Registrant maintains an unclassified Statement of Financial Position.
</FN>
</TABLE>
