SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
--------------------------------------------------
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 33-44158
---------------------------------------------------------
Capital Preferred Yield Fund-III, L.P.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 84-1248907
----------------------- ------------------------------------
(State of organization) (I.R.S. Employer Identification No.)
7175 West Jefferson Avenue, Suite 4000
Lakewood, Colorado 80235
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 980-1000
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 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 .
----- -----
Exhibit Index appears on Page 15
Page 1 of 16 Pages
<PAGE>
CAPITAL PREFERRED YIELD FUND-III, L.P.
Quarterly Report on Form 10-Q
For the Quarter Ended
March 31, 1999
Table of Contents
-----------------
PART I. FINANCIAL INFORMATION PAGE
----
Item 1. Financial Statements (Unaudited)
Balance Sheets - March 31, 1999 and December 31, 1998 3
Statements of Income - Three Months Ended
March 31, 1999 and 1998 4
Statements of Cash Flows - Three Months Ended
March 31, 1999 and 1998 5
Notes to Financial Statements 6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-13
Item 3. Quantitative and Qualitative Disclosures About Market Risk 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 6. Exhibits and Reports on Form 8-K 14
Exhibit Index 15
Signature 16
2
<PAGE>
CAPITAL PREFERRED YIELD FUND-III, L.P.
BALANCE SHEETS
ASSETS
March 31, December 31,
1999 1998
----------- ------------
(Unaudited)
Cash and cash equivalents $ 1,603,822 $ 2,723,454
Accounts receivable 1,268,092 1,340,631
Receivable from related party 201,284 50,521
Equipment held for sale or re-lease 732,707 534,643
Net investment in direct finance leases 3,122,219 3,560,216
Leased equipment, net 38,320,960 39,594,222
----------- -----------
Total assets $45,249,084 $47,803,687
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued liabilities $ 1,513,803 $ 1,508,619
Payables to affiliates 112,380 48,360
Rents received in advance 562,343 554,824
Distributions payable to partners 440,798 440,798
Discounted lease rentals 10,163,958 12,603,909
----------- -----------
Total liabilities 12,793,282 15,156,510
----------- -----------
Partners' capital:
General partner - -
Limited partners:
Class A 32,049,384 32,239,114
Class B 406,418 408,063
----------- -----------
Total partners' capital 32,455,802 32,647,177
----------- -----------
Total liabilities and partners' capital $45,249,084 $47,803,687
=========== ===========
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
CAPITAL PREFERRED YIELD FUND-III, L.P.
STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
----------------------------
1999 1998
---------- ----------
REVENUE:
Operating lease rentals $4,334,349 $4,214,454
Direct finance lease income 71,751 91,242
Equipment sales margin 271,781 173,087
Interest income 42,093 52,363
---------- ----------
Total revenue 4,719,974 4,531,146
---------- ----------
EXPENSES:
Depreciation 3,114,342 3,381,596
Management fees to general partner 103,537 104,887
Direct services from general partner 41,744 45,786
General and administrative 58,183 57,524
Interest on discounted lease rentals 203,357 279,488
Provision for losses 50,000 275,000
---------- ----------
Total expenses 3,571,163 4,144,281
---------- ----------
NET INCOME $1,148,811 $ 386,865
========== ==========
NET INCOME ALLOCATED:
To the general partner $ 13,181 $ 13,209
To the Class A limited partners 1,124,167 369,876
To the Class B limited partner 11,463 3,780
---------- ----------
$1,148,811 $ 386,865
========== ==========
Net income per weighted average Class A
limited partner unit outstanding $ 2.30 $ .75
========== ==========
Weighted average Class A limited
partner units outstanding 489,801 493,313
========== ==========
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
CAPITAL PREFERRED YIELD FUND-III, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------
1999 1998
----------- -----------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 5,178,045 $ 6,732,231
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment on operating leases from affiliate (2,530,565) (1,473,770)
Investment in direct finance leases, acquired from affiliate (44,079) (2,169,213)
----------- -----------
Net cash (used in) investing activities (2,574,644) (3,642,983)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from discounted lease rentals - 1,728,059
Principal payments on discounted lease rentals (2,382,847) (2,268,498)
Redemptions of Class A limited partner units (22,126) (35,765)
Distributions to partners (1,318,060) (1,321,414)
----------- -----------
Net cash (used in) financing activities (3,723,033) (1,897,618)
----------- -----------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (1,119,632) 1,191,630
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,723,454 2,813,686
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,603,822 $ 4,005,316
=========== ===========
Supplemental disclosure of cash flow information:
Interest paid on discounted lease rentals $ 201,463 $ 279,488
Supplemental disclosure of noncash investing and
financing activities:
Discounted lease rentals assumed in equipment acquisitions - 99,710
Discounted lease rental for bankrupt lessee written-off
as uncollectible 57,104 -
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
CAPITAL PREFERRED YIELD FUND-III, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
---------------------
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
disclosures required by generally accepted accounting principles for annual
financial statements. In the opinion of the General Partner, all
adjustments (consisting of normal recurring adjustments) considered
necessary for a fair presentation have been included. The balance sheet at
December 31, 1998 was derived from the audited financial statements
included in the Partnership's 1998 Form 10-K. For further information,
refer to the financial statements of Capital Preferred Yield Fund-III, L.P.
(the "Partnership"), and the related notes, included in the Partnership's
Annual Report on Form 10-K for the year ended December 31, 1998, previously
filed with the Securities and Exchange Commission.
RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities ("Statement
133"). Statement 133 establishes accounting and reporting standards for
derivative instruments and for hedging activities. It requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair
value. Statement 133 is effective for fiscal years beginning after June 15,
1999, with earlier application permitted. The Partnership adopted Statement
133 in the first quarter of 1999. The General Partner does not expect the
adoption to have an impact on its financial reporting.
2. Transactions With the General Partner and Affiliates
----------------------------------------------------
MANAGEMENT FEES TO GENERAL PARTNER
In accordance with the Partnership Agreement, the General Partner earns a
management fee in connection with its management of the equipment,
calculated as a percentage of the monthly gross rentals received, and paid
monthly in arrears. At March 31, 1999, management fees of $37,499 are
included in payables to affiliates.
DIRECT SERVICES FROM GENERAL PARTNER
The General Partner and an affiliate provide accounting, investor
relations, billing, collecting, asset management, and other administrative
services to the Partnership. The Partnership reimburses the General Partner
for these services performed on its behalf as permitted under the terms of
the Partnership Agreement. At March 31, 1999, direct services from the
General Partner of $12,217 are included in payables to affiliates.
6
<PAGE>
CAPITAL PREFERRED YIELD FUND-III, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
2. Transactions With the General Partner and Affiliates, continued
----------------------------------------------------
GENERAL AND ADMINISTRATIVE EXPENSES
The General Partner and an affiliate are reimbursed for the actual cost of
administrative expenses incurred on behalf of Partnership per the terms of
the Partnership Agreement. At March 31, 1999, general and administrative
costs of $62,664 are included in payables to affiliates.
RECEIVABLE FROM RELATED PARTY
The General Partner collects rents from lessees and applies these rental
payments to the lessee's account with the Partnership. The General Partner
then transfers the collected rental payments to the Partnership,
eliminating the receivable from related party balance. At the end of March
1999, $201,284 rents had been applied by the General Partner that were
transferred to the Partnership in April 1999.
EQUIPMENT PURCHASES
During the three months ended March 31, 1999, the Partnership acquired the
equipment described below from Capital Associates International, Inc.
("CAII"):
<TABLE>
<CAPTION>
Acquisition Total
Equipment Cost of Fees and Equipment
Lessee Description Equipment Reimbursements Purchase Price
----------------------------- --------------------------- ----------- -------------- --------------
<S> <C> <C> <C> <C>
Wyle Labs Thermal cycling $ 378,807 $ 13,126 $ 391,933
Wyle Labs Servers 16,485 571 17,056
Birmingham Steel Corporation Copier 9,450 327 9,777
Treasure Chest Advertising Forklift 20,685 717 21,402
General Motors Corporation Material handling equipment 191,454 6,634 198,088
General Motors Corporation Cameras 379,175 13,138 392,313
General Motors Corporation Forklift 180,141 6,242 186,383
General Motors Corporation Scrubber 64,292 2,228 66,520
General Motors Corporation Scrubber/Sweeper 35,135 1,217 36,352
General Motors Corporation Rider sweeper 32,627 1,131 33,758
General Motors Corporation Walkie lift 110,212 3,819 114,031
Ball Aerospace & Technology Office furniture 56,589 1,961 58,550
United Airlines Docking system 60,000 2,079 62,079
Thomson Industries Computer equipment 45,570 1,579 47,149
Sebastiani Vineyards Bottling equipment 907,798 31,455 939,253
----------- ---------- -----------
$ 2,488,420 $ 86,224 $ 2,574,644
=========== ========== ===========
</TABLE>
At March 31, 1999, the General Partner had identified approximately
$718,000 of additional equipment that satisfied the Partnership's
acquisition criteria. The Partnership expects to acquire this equipment
during the remainder of 1999.
7
<PAGE>
CAPITAL PREFERRED YIELD FUND-III, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
3. Year 2000
---------
An affiliate provides accounting and other administrative services,
including data processing services to the Partnership. The affiliate has
conducted a comprehensive review of its computer systems to identify
systems that could be affected by the Year 2000 issue. The Year 2000 issue
results from computer programs being written using two digits rather than
four to define the applicable year. Certain computer programs which have
date-sensitive software could recognize a date using "00" as the year 1900
rather than the year 2000. This could result in major system failures or
miscalculations. Certain of the affiliate's software has already been
upgraded to correctly account for the Year 2000 issue. The affiliate is
implementing additional upgrades whereby the affiliate's primary lease
tracking and accounting software will account for the Year 2000 correctly.
The affiliate expects that the new upgrades will be fully operational by
December 31, 1999, and therefore expects that it will be fully Year 2000
compliant. The affiliate does not expect any other changes required for the
Year 2000 to have a material effect on its financial position or results of
operations. As such, the affiliate has not developed any specific
contingency plans in the event it fails to complete the upgrades by
December 31, 1999. However, should the affiliate be unsuccessful in
completing the necessary upgrades by December 31, 1999, it does not expect
there will be a material adverse effect on the Partnership's financial
position or results of operations. There could be a negative impact on the
Partnership's ability to realize expected cash flows from leased equipment
on a timely basis. While it is expected that the Partnership's ability to
ultimately realize all expected cash flows will not be impacted, delays in
collecting cash flows would have a negative impact on the timing of
distributions to partners. The affiliate does not expect any Year 2000
issues relating to its customers and vendors to have a material effect on
its financial position or results of operations.
8
<PAGE>
CAPITAL PREFERRED YIELD FUND-III, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
- ---------------------
Presented below are schedules (prepared solely to facilitate the discussion of
results of operations that follows) showing items of income and expense and
changes in those items derived from the Statements of Income:
Three Months
Ended March 31,
---------------------------
1999 1998 Change
----------- ----------- ----------
Leasing margin $ 1,088,401 $ 644,612 $ 443,789
Equipment sales margin 271,781 173,087 98,694
Interest income 42,093 52,363 (10,270)
Management fees to general partner (103,537) (104,887) 1,350
Direct services from general partner (41,744) (45,786) 4,042
General and administrative (58,183) (57,524) (659)
Provision for losses (50,000) (275,000) 225,000
----------- ---------- ---------
Net income $ 1,148,811 $ 386,865 $ 761,946
=========== ========== =========
LEASING MARGIN
Leasing margin consists of the following:
Three Months Ended
March 31,
---------------------------
1999 1998
----------- -----------
Operating lease rentals $ 4,334,349 $ 4,214,454
Direct finance lease income 71,751 91,242
Depreciation (3,114,342) (3,381,596)
Interest expense on discounted lease rentals (203,357) (279,488)
----------- -----------
Leasing margin $ 1,088,401 $ 644,612
=========== ===========
Leasing margin ratio 25% 15%
== ==
9
<PAGE>
CAPITAL PREFERRED YIELD FUND-III, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, continued
Results of Operations, continued
- ---------------------
LEASING MARGIN, continued
Leasing margin ratio will vary due to changes in the portfolio, including, among
other things, the mix of operating leases versus direct finance leases, the
average maturity of leases comprising the portfolio, the average residual value
of leases in the portfolio, and the amount of discounted lease rentals financing
the portfolio.
Leasing margin and the related leasing margin ratio for an operating lease
financed with non-recourse debt increases during the term of the lease since
rents and depreciation are typically fixed while interest expense declines as
the related non-recourse debt principle is repaid. Leasing margin and leasing
margin ratio increased for the three months ended March 31, 1999 compared to the
three months ended March 31, 1998 in part due to the decrease in interest
expense. In addition, operating lease rentals increased for the three months
ended March 31, 1999 as compared to the three months ended March 31, 1998
primarily due to an increase in interim rent proceeds. Operating lease revenue,
exclusive of interim rent, and depreciation expense decreased for the three
months ended March 31, 1999 as compared to the three months ended March 31,
1998.
The ultimate rate of return on leases depends, in part, on interest rates at the
time the leases are originated, as well as future equipment values and on-going
lessee creditworthiness. Because leasing is an alternative to financing
equipment purchases with debt, lease rates tend to rise and fall with interest
rates (although lease rate movements generally lag interest rate changes in the
capital markets).
EQUIPMENT SALES MARGIN
Equipment sales margin consists of the following:
Three Months Ended
March 31,
--------------------------------
1999 1998
----------- -----------
Equipment sales revenue $ 631,780 $ 1,854,512
Cost of equipment sales (359,999) (1,681,425)
----------- -----------
Equipment sales margin $ 271,781 $ 173,087
=========== ===========
Currently, a portion of the Partnership's initial leases have expired and the
equipment is either being released or sold to the lessee or a third party.
Equipment sales margin increased for the three months ended March 31, 1999
compared to the three months ended March 31, 1998 primarily due to a one time
recognition of gain from the receipt of funds pursuant to the sale of a note
receivable representing settlement with a bankrupt lessee in the amount of
$206,360.
10
<PAGE>
CAPITAL PREFERRED YIELD FUND-III, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, continued
Results of Operations, continued
- ---------------------
INTEREST INCOME
Interest income decreased due to a decrease in the amount of invested cash
during the quarter ended March 31, 1999 as compared to the three months ended
March 31, 1998. Interest income varies due to (1) the amount of cash available
for investment (pending distribution or equipment purchases) and (2) the
interest rate on such invested cash.
EXPENSES
Management fees to general partner, direct services from general partner and
general and administrative expenses remained comparable to 1998. Management fees
and direct services are discussed in detail under Note 2 to the financial
statements. The primary components of general and administrative expenses for
the three months ended March 31, 1999 and March 31, 1998 were data processing,
advertising, audit and tax fees, printing and bank charges.
PROVISION FOR LOSSES
The remarketing of equipment for an amount greater than its book value is
reported with equipment sales margin (if the equipment is sold) or leasing
margin (if the equipment is re-leased). The realization of less than the
carrying value of equipment (which occurs when the equipment is remarketed
subsequent to the termination of the initial lease) is recorded as provision for
losses.
Residual values are established equal to the estimated value to be received from
the equipment following termination of the lease. In estimating such values, the
Partnership considers all relevant facts regarding the equipment and the lessee,
including, for example, the likelihood that the lessee will re-lease the
equipment. The nature of the Partnership's leasing activities is such that it
has credit and residual value exposure and will incur losses from those
exposures in the ordinary course of business. The Partnership performs quarterly
assessments of the estimated residual values of its assets to identify any
other-than- temporary losses in value.
A provision for loss of $50,000 was recorded for the three months ended March
31, 1999. Of this amount, $25,000 is due to the write-off of assets that were
leased to a bankrupt lessee for which no recovery is possible. The balance of
the provision for the three months ended March 31, 1999 consists of provision
for loss on other equipment returned to the Partnership at lease maturity.
11
<PAGE>
CAPITAL PREFERRED YIELD FUND-III, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, continued
Liquidity & Capital Resources
- -----------------------------
The Partnership funds its operating activities principally with cash from rents,
discounted lease rentals (non-recourse debt), interest income, and sales of
off-lease equipment. Available cash and cash reserves of the Partnership are
invested in short-term government securities pending the acquisition of
equipment or distribution to the partners.
During the three months ended March 31, 1999, the Partnership acquired equipment
subject to leases with a total equipment purchase price of $2,574,644. At March
31, 1999, the General Partner had identified approximately $718,000 of
additional equipment that satisfied the Partnership's acquisition criteria. The
Partnership expects to acquire this equipment during the remainder of 1999.
During the three months ended March 31, 1999, the Partnership declared
distributions to the partners of $1,318,060 ($440,798 of which was paid during
April 1999). A substantial portion of such distributions is expected to
constitute a return of capital. Distributions may be characterized for tax,
accounting and economic purposes as a return of capital, a return on capital, or
a portion of both. The portion of each cash distribution which exceeds its net
income for the fiscal period may be deemed a return of capital for accounting
purposes. However, the total percentage of the partnership's return on capital
over its life will only be determined after all residual cash flows (which
include proceeds from the re-leasing and sale of equipment) have been realized
at the termination of the partnership.
The General Partner believes that the Partnership will generate sufficient cash
flows from operations during the remainder of 1999, to (1) meet current
operating requirements, (2) fund cash distributions to Class A and Class B
limited partners at annualized rates of 10.5% (portions of which are expected to
constitute returns of capital), and (3) reinvest in additional equipment under
leases, provided that suitable equipment can be identified and acquired.
YEAR 2000 ISSUES
An affiliate provides accounting and other administrative services, including
data processing services to the Partnership. The affiliate has conducted a
comprehensive review of its computer systems to identify systems that could be
affected by the Year 2000 issue. The Year 2000 issue results from computer
programs being written using two digits rather than four to define the
applicable year. Certain computer programs which have date-sensitive software
could recognize a date using "00" as the year 1900 rather than the year 2000.
This could result in major system failures or miscalculations. Certain of the
affiliate's software has already been upgraded to correctly account for the Year
2000 issue. The affiliate is implementing additional upgrades whereby the
affiliate's primary lease tracking and accounting software will account for the
Year 2000 correctly. The affiliate expects that the new upgrades will be fully
operational by December 31, 1999, and therefore expects that it will be fully
Year 2000 compliant. The affiliate does not expect any other changes required
for the Year 2000 to have a material effect on its financial position or results
of operations. As such, the affiliate has not developed any specific contingency
12
<PAGE>
CAPITAL PREFERRED YIELD FUND-III, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, continued
Liquidity & Capital Resources, continued
- -----------------------------
YEAR 2000 ISSUES, continued
plans in the event it fails to complete the upgrades by December 31, 1999.
However, should the affiliate be unsuccessful in completing the necessary
upgrades by December 31, 1999, it does not expect there will be a material
adverse effect on the Partnership's financial position or results of operations.
There could be a negative impact on the Partnership's ability to realize
expected cash flows from leased equipment on a timely basis. While it is
expected that the Partnership's ability to ultimately realize all expected cash
flows will not be impacted, delays in collecting cash flows would have a
negative impact on the timing of distributions to partners. The affiliate does
not expect any Year 2000 issues relating to its customers and vendors to have a
material effect on its financial position or results of operations.
New Accounting Pronouncements
- -----------------------------
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities ("Statement 133").
Statement 133 establishes accounting and reporting standards for derivative
instruments and for hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. Statement 133 is effective
for fiscal years beginning after June 15, 1999, with earlier application
permitted. The Partnership adopted Statement 133 in the first quarter of 1999.
The General Partner does not expect the adoption to have an impact on its
financial reporting.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of
- --------------------------------------------------------------------------------
1995
- ----
The statements contained in this report which are not historical facts may be
deemed to contain forward- looking statements with respect to events, the
occurrence of which involve risks and uncertainties, and are subject to factors
that could cause actual future results to differ both adversely and materially
from currently anticipated results, including, without limitation, the level of
lease originations, realization of residual values, the availability and cost of
financing sources and the ultimate outcome of any contract disputes. Certain
specific risks associated with particular aspects of the Partnership's business
are discussed under Results of Operations in this report and under Results of
Operations in the 1998 Form 10-K when and where applicable.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The partnership's leases with equipment users are non-cancelable and have lease
rates which are fixed at lease inception. The partnership finances its leases,
in part, with discounted lease rentals at a fixed debt rate. The partnership's
other assets and liabilities are also at fixed rates. Consequently the
partnership has no interest rate risk or other market risk exposure.
13
<PAGE>
CAPITAL PREFERRED YIELD FUND-III, L.P.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
The Partnership is involved in routine legal proceedings incidental
to the conduct of its business. The General Partner believes none of
these legal proceedings will have a material adverse effect on the
financial condition or operations of the Partnership.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(b) The Partnership did not file any reports on Form 8-K during the
quarter ended March 31, 1999.
14
<PAGE>
Item No. Exhibit Index
27 Financial Data Schedule
15
<PAGE>
CAPITAL PREFERRED YIELD FUND-III, L.P.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Partnership has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CAPITAL PREFERRED YIELD FUND-III, L.P.
By: CAI Equipment Leasing IV Corp.
Dated: May 17, 1999 By: /s/Anthony M. DiPaolo
------------------------------
Anthony M. DiPaolo
Senior Vice President
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
consolidated balance sheets and consolidated statements of income and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,603,822
<SECURITIES> 0
<RECEIVABLES> 1,469,376
<ALLOWANCES> 0
<INVENTORY> 732,707
<CURRENT-ASSETS> 0
<PP&E> 41,443,179
<DEPRECIATION> 0
<TOTAL-ASSETS> 45,249,084
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 32,455,802
<TOTAL-LIABILITY-AND-EQUITY> 45,249,084
<SALES> 271,781
<TOTAL-REVENUES> 4,719,974
<CGS> 0
<TOTAL-COSTS> 3,571,163
<OTHER-EXPENSES> 145,281
<LOSS-PROVISION> 50,000
<INTEREST-EXPENSE> 203,357
<INCOME-PRETAX> 1,148,811
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,148,811
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,148,811
<EPS-PRIMARY> 2.30
<EPS-DILUTED> 2.30
</TABLE>
