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 March 31, 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 MARCH 31, 1997 AND DECEMBER 31,
1996
<CAPTION>
(Unaudited)
March 31, 1997 December 31, 1996
<S> <C> <C>
Assets
Cash and cash equivalents $ 222,964 $ 450,785
Rentals receivable 67,899 128,676
Accounts receivable-affiliates 1,140,003
Notes receivable-lessee 32,269 39,118
Remarketing receivables 38,444 42,808
Rental equipment, at cost 38,833,455 35,231,829
Less accumulated depreciation (11,510,968) (11,121,318)
Net rental equipment 27,322,487 24,110,511
Total assets $ 27,684,063 $ 25,911,901
Liabilities and
partners' capital
Accounts payable - affiliates $ 2,786,594 $
Accounts payable 18,316 25,064
Accrued management fees 33,182 29,853
Deferred income 156,716 206,291
Notes Payable 15,762,563 16,116,034
Total liabilities 18,757,371 16,377,242
Partners' capital:
General Partner:
Capital contribution 1,000 1,000
Cumulative net income 83,496 12,047
Cumulative cash distributions (369,239) (361,663)
(284,743) (348,616)
Limited Partners
(500,000 units):
Capital contributions net
of offering costs 44,539,778 44,539,778
Cumulative net income 1,270,872 1,192,712
Cumulative cash distributions(36,599,215) (35,849,215)
9,211,435 9,883,275
Partners' capital 8,926,692 9,534,659
Total liabilities
and partners'
capital $ 27,684,063 $ 25,911,901
</TABLE>
<PAGE>
CSA INCOME FUND LIMITED PARTNERSHIP III
STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE MONTHS ENDED
MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Revenues:
Rental income $ 2,466,603 $ 1,662,791
Interest income 13,030 57,405
Gain (loss) on sale of
equipment 71,449 (73,101)
Gain (loss) on foreign
currency 2,145 (679)
Total revenues 2,553,227 1,646,416
Costs and expenses:
Depreciation/amortization 1,979,852 1,157,823
Interest expense 254,227 115,179
Management fees 123,330 83,140
Storage & Refurbishment 2,000 5,000
General and administrative 44,209 40,487
Total expenses 2,403,618 1,401,629
Net income $ 149,609 $ 244,787
Net income allocation:
General Partner $ 71,449 $ 2,448
Limited Partners 78,160 242,339
$ 149,609 $ 244,787
Net income per Limited
Partnership Unit $ .16 $ .48
Number of Limited Partnership
Units 500,000 500,000
</TABLE>
<PAGE>
CSA INCOME FUND LIMITED PARTNERSHIP III
STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE MONTHS ENDED
MARCH 31, 1997 AND 1996
[CAPTION]
<TABLE> 1997 1996
<S> <C> <C>
Cash flows from operations:
Cash received from rental
of equipment $ 2,456,146 $ 1,925,046
Cash paid for operating and
management expenses (172,958) (129,196)
Interest paid (254,227) (109,132)
Interest received 13,030 70,079
Net cash from operations 2,041,991 1,756,797
Cash flow from investments:
Purchase of equipment (5,470,922) (4,393,193)
Sale of equipment 378,712 285,633
Net cash from
(used by) investments (5,092,210) (4,107,560)
Cash flows from financing:
Accounts payable - equipment
purchases 1,331,217
Advances to/from affiliates 3,926,597
Payment from notes receivable 6,848
Proceeds from notes payable 1,642,258
Repayment of notes payable (1,995,729) (666,718)
Payment of cash distributions (757,576) (757,576)
Net cash from
(used by) financing 2,822,398 (93,077)
Net change in cash
and cash equivalents (227,821) (2,443,840)
Cash and cash equivalents
at beginning of period 450,785 6,210,985
Cash and cash equivalents
at end of period $ 222,964 $ 3,767,145
</TABLE>
<PAGE>
CSA INCOME FUND LIMITED PARTNERSHIP III
NOTE TO FINANCIAL STATEMENTS
The quarterly financial statements have been prepared by the
Partnership without audit. Certain information and footnote
disclosures 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 March 31, 1997
and December 31, 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 $2,466,603 and $1,662,791 and net income
was $149,609 and $244,787 for the quarters ended March 31, 1996
and 1995, respectively. The increase in gross rental income was
primarily due to the $19,693,078 of new equipment leased during
1996. The net income decrease is primarily attributable to the
increase in depreciation expense associated with the new leases
added during 1996.
The Partnership generated $2,420,703 in cash flow from operations
and from the sale of equipment during the three months ended March
31, 1997. The Partnership used these funds and cash on hand to
acquire additional equipment of $5,470,922, pay down notes payable
by $1,995,729 and pay cash distributions to the Limited Partners
of $750,000.
The intended life of the Partnership contained in the original
prospectus was five to seven years. The Partnership has been in
operation in excess of seven years. 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 of the Partnership in 1997, which is currently
anticipated to be completed in 1998. In accordance with the Partnership
Agreement, pursuant to section 8.3 (c), accounting profits from the sale
of equipment that results in the dissolution of the Partnership, shall
be allocated to each partner first in the amount equal to the negative
balance in the Capital Account of such partner. In connection with the
wind up of the Partnership, certain gains on the disposition of
partnership assets were allocated during the first quarter of 1997 to
the General Partner to reduce its Capital Account negative balance.
The Partnership distributed $ .50 per limited partnership unit on the
15th of January, February and March 1997. To date, the Partnership has
made cash distributions to the Limited Partners ranging from 66% to 82%
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. However, revenue generated by
the Partnership from lease renewals and remarketings after the initial
lease terms have been lower than anticipated as a result of more rapid
obsolescence in high technology equipment. While the General Partner
continues to pursue additional lease opportunities to increase the
Partnership's distributions, based on an analysis of the remaining
assets in the Partnerships' portfolio, the General Partner presently
estimates that the 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 - There were no reports filed
during the first quarter of 1997.
<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: 05/15/97
/s/ J. Frank Keohane
J. Frank Keohane, President
Principal Executive Officer
Date: 05/15/97
/s/ Richard P. Timmons
Richard P. Timmons
Controller
Principal Accounting and
Finance Officer
<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 March
31, 1997 and Statement of Operations for the three months then ended and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 222,964
<SECURITIES> 0
<RECEIVABLES> 138,612
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 38,833,455
<DEPRECIATION> 11,510,968
<TOTAL-ASSETS> 27,684,063
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 8,926,692
<TOTAL-LIABILITY-AND-EQUITY> 27,684,063
<SALES> 0
<TOTAL-REVENUES> 2,553,227
<CGS> 0
<TOTAL-COSTS> 2,103,182
<OTHER-EXPENSES> 46,209
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 254,227
<INCOME-PRETAX> 149,609
<INCOME-TAX> 0
<INCOME-CONTINUING> 149,609
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 149,609
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
<FN>
<F1>The Registrant maintains an unclassified Statement of Financial Position.
</FN>
</TABLE>
