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, 1998
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
STATEMENTS OF FINANCIAL POSITION AS OF
<TABLE>
<CAPTION>
(Unaudited)
June 30, December 31,
1998 1997
<S> <C> <C>
Assets
Cash and cash
equivalents $ 142,589 $ 200,328
Rentals receivable 4,778 45,665
Accounts receivable-
affiliates 33,288 61,368
Notes receivable-lessee 3,708 14,641
Remarketing receivables 7,971 56,010
Rental equipment,
at cost 24,380,185 32,491,943
Less accumulated
depreciation (13,743,486) (13,732,945)
Net rental equipment 10,636,699 18,758,998
Total assets $10,829,033 $19,137,010
Liabilities and
partners' capital
Accounts payable $ 41,602 $ 78,738
Accrued management fees 27,327 35,639
Deferred income 38,507 60,558
Notes payable 6,019,335 12,629,981
Total liabilities 6,126,771 12,804,916
Partners' capital:
General Partner:
Capital contribution 1,000 1,000
Cumulative net income 406,118 267,020
Cumulative cash
distributions (407,118) (391,966)
0 (123,946)
Limited Partners
(500,000 units):
Capital contributions
net of offering costs 44,539,778 44,539,778
Cumulative net income 511,699 765,477
Cumulative cash
distributions (40,349,215) (38,849,215)
4,702,262 6,456,040
Total Partners'
capital 4,702,262 6,332,094
Total liabilities and
partners' capital $10,829,033 $19,137,010
</TABLE>
<PAGE>
CSA INCOME FUND LIMITED PARTNERSHIP III
STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE
AND SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997
<TABLE>
<CAPTION>
Three Months Six Months Ended
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Revenues:
Rental income $1,999,566 $2,833,935 $ 4,373,774 $5,300,538
Interest income 489 6,747 1,530 19,777
Gain on sale
of equipment 65,101 139,880 144,648 211,329
Exchange
gain (loss) on
foreign currency (47) 2,292 198 4,437
Total revenues 2,065,109 2,982,854 4,520,150 5,536,081
Costs and expenses:
Depreciation and
amortization 1,840,879 2,265,828 3,932,574 4,245,680
Interest 168,804 326,663 401,783 580,890
Management fees 99,978 141,697 218,689 265,027
Storage and
Refurbishment - 1,253 - 3,253
General and
administrative 37,946 49,400 81,784 93,609
Total expenses 2,147,607 2,784,841 4,634,830 5,188,459
Net income (loss) $ (82,498) $ 198,013 $ (114,680) $ 347,622
Net income (loss)
allocation:
General Partner $ 59,551 $ 139,880 $ 139,098 $ 211,329
Limited Partners (142,049) 58,133 (253,778) 136,293
$ (82,498) $ 198,013 $ (114,680) $ 347,622
Net income (loss) per
Limited Partnership
Unit $ (.28) $ .11 $ (.51) $ .27
Number of Limited
Partnership Units 500,000 500,000 500,000 500,000
</TABLE>
<PAGE>
CSA INCOME FUND LIMITED PARTNERSHIP III
STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE
AND SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Cash flows from
operations:
Cash received from
rental of
equipment $ 2,048,046 $ 2,781,302 $ 4,422,012 $ 5,237,448
Cash paid for
operating and
management
expenses (159,771) (184,579) (345,920) (357,537)
Interest paid (168,804) (326,663) (401,783) (580,890)
Interest received 489 6,747 1,530 19,777
Net cash from
operations 1,719,960 2,276,807 3,675,839 4,318,798
Cash flow from
investments:
Purchase of equipment - (157,247) - (5,628,169)
Sale of equipment 3,622,059 268,375 4,390,382 647,087
Net cash from
(used by)
investments 3,622,059 111,128 4,390,382 (4,981,082)
Cash flows from financing:
Proceeds from notes
receivable - 10,489 10,933 17,337
Advances to/from
affiliates (259,095) (2,888,944) (9,095) 1,037,653
Proceeds from notes
payable - 3,617,836 - 5,260,094
Reduction of notes
payable (4,301,653) (2,164,135) (6,610,646) (4,159,864)
Payment of cash
distributions (757,576) (757,576) (1,515,152) (1,515,152)
Net cash from
(used by)
financing (5,318,324) (2,182,330) (8,123,960) 640,068
Net change in cash 23,695 205,605 (57,739) (22,216)
Cash and cash equivalents
at beginning
of period 118,894 222,964 200,328 450,785
Cash and cash equivalents
at end of period $ 142,589 $ 428,569 $ 142,589 $ 428,569
</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 balance sheet information as of December 31,
1997. 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,
1997.
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, 1998
and June 30, 1997 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
Total revenue was $2,065,109 and $2,982,854 for the quarters ended
June 30, 1998 and 1997,respectively. Net loss for the quarter ended
June 30, 1998 was $82,498 as compared to net income of $198,013 in the
quarter ended June 30, 1997. For the six months ended June 30, 1998 and
June 30,1997, total revenue was $4,520,150 and $5,536,081, respectively.
Net loss of $114,680 for the six months ended June 30, 1998 as compared
to income of $347,622 in the six months ended June 30, 1997. The decrease
in net income is primarily attributable to the increase in depreciation
expense associated with the equipment purchased in 1996 and early 1997.
The Partnership generated $8,066,221 from operations and sale of
equipment during the six months ended June 30, 1998. The Partnership
used these funds and cash on hand to reduce notes payable by $6,610,646
and make distributions to partners of $1,515,152. $2,517,896
of the notes payable reduction was as a result of the Partnership
selling equipment still under lease with an original equipment
cost of $5,046,027 as part of the Partnership
wind-up process.
As previously stated,the General Partner of CSA Income Fund Limited
Partnership III informed the Limited Partners in the Partnership's 1997
10-K and Annual Report that it would be the best interest of the Limited
Partners and the Partnership to complete the wind-up of the Partnership
in 1998. As part of the wind-up process, during the first six months of 1998,
the General Partner has disposed of equipment with an original cost of
$8,111,758.
In accordance with the Partnership Agreement, pursuant to section 8.3 (c),
accounting profits from the sale of equipment that result 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
accounting gains on the disposition of partnership assets were allocated
during the second quarter of 1998 to the General Partner to reduce its
Capital Account negative balance.
The wind-up 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 73% to 89% of their
initial investment, depending on when the Limited Partner entered the
Partnership. As previously reported, certain revenues 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. The General Partner still
estimates that the continued cash distributions may not fully return the
entire initial investment of the Limited Partners and/or a return thereon
and will continue to report on the Limited Partners' return of investment
with each cash distribution.
<PAGE>
CSA INCOME FUND LIMITED PARTNERSHIP III
PART II
<TABLE>
<CAPTION>
<S> <C>
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 second quarter of 1998.
</TABLE>
<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
Principal Executive Officer
Date:
/s/ Richard P.Timmons
Corporate 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 June 30,
1998 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-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 142,589
<SECURITIES> 0
<RECEIVABLES> 49,745
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 24,380,185
<DEPRECIATION> 13,743,486
<TOTAL-ASSETS> 10,829,033
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,702,262
<TOTAL-LIABILITY-AND-EQUITY> 10,829,033
<SALES> 0
<TOTAL-REVENUES> 4,520,150
<CGS> 0
<TOTAL-COSTS> 4,151,263
<OTHER-EXPENSES> 81,784
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 401,783
<INCOME-PRETAX> (114,680)
<INCOME-TAX> 0
<INCOME-CONTINUING> (114,680)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (114,680)
<EPS-PRIMARY> (0.51)
<EPS-DILUTED> (0.51)
<FN>
<F1>The Registrant maintains an unclassified Statement of Financial Position.
</FN>
</TABLE>
