UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1996
Commission File Number 0-23432
RIDGEWOOD ELECTRIC POWER TRUST III
(Exact name of registrant as specified in its charter.)
Delaware, U.S.A. 22-3264565
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
947 Linwood Avenue, Ridgewood, New Jersey 07450-2939
(Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code:
(201) 447-9000
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 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 [ ]
<PAGE>
<TABLE>
PART I. - FINANCIAL INFORMATION
RIDGEWOOD ELECTRIC POWER TRUST III
BALANCE SHEETS
(Unaudited)
<CAPTION>
June 30, December 31,
1996 1995
<S> <C> <C>
Assets
Cash and cash equivalents $ 3,221,614 $ 10,972,576
Investments in power
project partnerships 28,219,492 20,884,493
Due from affiliates 15,143 299,194
Interest receivable 30,000 0
Other assets 230,856 444,172
Total assets $ 31,717,105 $ 32,651,668
Liabilities and Share-
holders' Equity
Accounts payable and
accrued expenses $ 20,000 $ 72,442
20,000 72,442
Shareholders' equity
(391.8444 shares issued
and outstanding) 31,711,176 32,584,476
Managing shareholder's
accumulated deficit (14,071) (5,250)
Total shareholders' equity 31,697,105 32,579,226
Total liabilities and
shareholders' equity $ 31,717,105 $32,651,668
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
RIDGEWOOD ELECTRIC POWER TRUST III
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS AND QUARTERS
ENDED JUNE 30, 1996 AND JUNE 30, 1995
(Unaudited)
<CAPTION>
Six months Quarter Six months Quarter
ended ended June 30, ended ended
June 30,
June 30,1996 1996 June 30, 1995 1995
<S> <C> <C> <C> <C>
Income from power genera-
tion projects $ 1,027,284 881,507 $ 0
0
Dividend and interest
income 203,959 71,354 585,472
456,452
Total income 1,231,243 952,861 585,472
456,452
Management fee 396,330 191,470 0
0
Project due diligence expense 28,583 28,583 2,560
922
Administrative and
other expenses 31,607 18,268 903
(11,658)
Investment fee 0 0 340,361
111,695
Total expenses 456,520 238,321 343,824
100,959
Net income (loss) $ 774,723 $ 714,540 $ 241,648 $
355,493
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
RIDGEWOOD ELECTRIC POWER TRUST III
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS AND QUARTERS ENDED JUNE 30, 1996 AND JUNE
30, 1995
(Unaudited)
<CAPTION>
Six months Quarter Six months Quarter
ended ended June 30, ended ended
June 30,
June 30,1996 1996 June 30, 1995 1995
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income $ 774,723 $ 714,540 $ 241,648 $
355,493
Adjustments to
reconcile net income
to cash provided (used)
in operating activities:
Purchase of investments in
power generation partner-
ships (7,334,999) (1,778,676) (8,052,834)
(573,146)
Changes in assets &
liabilities:
Increase (decrease) in
due from affiliates 284,051 (15,143) 0
0
Decrease (increase)in
interest receivable 21,233 10,030 (111,652)
(111,652)
Decrease (increase) in
other assets 213,316 79,799 961
961
Increase (decrease) in
due to unconsolidated
subsidiary 0 (180,000) 0
0
Increase (decrease) in
accounts payable and
accrued expenses (52,442) (2,500) (35,389)
(200,983)
Decrease (increase) in
subscriptions receivable 0 0 (215,000)
(395,000)
Total adjustments (6,868,841) (1,886,490) (8,413,914)
(1,279,820)
Net cash used in
operating activities (6,094,118) (1,171,950) (8,172,266)
(924,327)
Cash provided by (used by)
financing activities:
Net proceeds from the sale
of Trust shares 0 0 15,047,858
5,795,575
Cash distributions to
Shareholders (1,656,844) (989,219) (670,530)
(324,432)
(1,656,844) (989,219) 14,377,328
5,471,143
Net increase (decrease)
in cash and cash equivalents (7,750,962) (2,161,169) 6,205,062
4,546,816
Cash and cash equivalents
- Beginning of period 10,972,576 5,382,783 18,237,615
19,895,861
Cash and cash equivalents
- - End of period $3,221,614 $3,221,614 $24,442,677
$24,442,677
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST III
NOTES TO FINANCIAL STATEMENTS
1. Organization and Purpose
Nature of business
Ridgewood Electric Power Trust III (the "Trust") was
formed as a Delaware business trust on December 6, 1993
by Ridgewood Energy Holding Corporation acting as the
Corporate Trustee. The managing shareholder of the
Trust is Ridgewood Power Corporation. The Trust began
offering shares on January 3, 1994. The Trust commenced
operations on April 16, 1994 and discontinued its
offering of Trust shares on May 31, 1995.
The Trust has been organized to invest in independent
power generation facilities and in the development of
these facilities. These independent power generation
facilities will include cogeneration facilities which
produce both electricity and thermal energy and other
power plants that use various fuel sources (except
nuclear). The power plants sell electricity and thermal
energy to utilities and industrial users under long-term
contracts.
"Business Development Company" election
Effective April 16, 1994, the Trust elected to be
treated as a "Business Development Company" under the
Investment Company Act of 1940 and registered its shares
under the Securities Exchange Act of 1934.
2. Summary of Significant Accounting Policies
Investments in power generation projects
The Trust holds investments in power generating projects
which are stated at fair value. Due to the illiquidity
of the investments, the fair values of the investments
are assumed to equal cost unless current available
information provides a basis for adjusting the value of
the investments.
The Trust had the following investments in power generation projects:
JUNE 30, Fair Values as of
1996 December 31, 1995
Power generation projects:
JRW Associates, L.P. $ 5,305,298 $ 5,305,298
Byron Power Partners, 3,138,072 2,958,072
L.P.
Providence Power 7,130,000 ---
EUA Projects:
Ridgewood/Rhode Island
PPLP 3,722,618 3,722,618
Ridgewood/Massachusetts
PPLP 3,223,881 3,223,881
Ridgewood/Elmsford PPLP 1,430,136 1,430,136
Other EUA Project
Partnerships 4,269,487 4,244,488
TOTALS $ 28,219,492 $ 20,884,493
Revenue Recognition
Income from investments is recorded when received.
Interest and dividend income are recorded as earned.
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST III
NOTES TO FINANCIAL STATEMENTS
Cash and cash equivalents
The Trust considers monies invested in a U.S. Treasury
Bills Fund with daily liquidation privileges to be a
cash equivalent.
Due diligence costs relating to potential power projects
Costs relating to the due diligence performed on
potential power projects are initially deferred, until
such time as the Trust determines whether or not it will
make an investment in the respective project. Those
costs relating to an accepted project are capitalized
and those costs relating to a rejected project are
expensed at that time.
Income taxes
No provision is made for income taxes in the
accompanying financial statements as the income or loss
of the Trust is included in the tax returns of the
individual shareholders.
Reclassification
Certain items in previously issued financial statements
have been reclassified for comparative purposes.
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST III
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Six months ended June 30, 1996 versus six months ended
June 30, 1995
Results of Operations
The Trust's net income of $774,723 for the first six months
of 1996 reflects the effects of the winding up of its
investment efforts in April 1996 with the acquisition of a
34.1% interest in the Providence Project, a 12 megawatt
capacity electric power plant located near Providence, Rhode
Island and fueled by landfill gas. The 1996 period's net
income was comprised of $1,027,000 of income from the power
plants owned by the Trust and $204,000 of dividend and
interest income, while comparable period net income for 1995
of $585,472 was comprised solely of dividend and interest
income on funds awaiting investment. The Trust anticipates
that dividend and interest income for the remainder of 1996
will be less than in the first half of the year because of
the reduced amount of Trust funds earning interest.
Income and cash flow earned by the Projects located in
California is seasonal, peaking in the third quarter of the
calendar year as summer heat increases demand for
electricity and falling in the fourth and first quarters,
when the Trust tends to schedule major maintenance. In
addition, during the first quarter of 1996, cash flow from
the EUA Projects purchased by the Trust in late 1995 was
retained to increase working capital. The Trust made additional
capital contributions to fund capital investments to these
Projects.
The pattern of expenses changed from the first six months of
1995 to the 1996 period as the Trust ended its investing
activities and became an operating company. Total expenses
increased 32.8% ($113,000) as the Trust began paying the
management fee ($396,000 in the 1996 period) to the Managing
Shareholder and ceased payment of the investment fee
($340,000 in the 1995 period). The other major component of
the expense increase was administrative and other expenses,
which increased $31,000 between the periods related to audit and
tax return preparation expenses. The Trust does not
anticipate significant increases in either management fee or
administrative expenses during the remainder of 1996.]
The Trust does not consolidate its financial statements with
those of the Projects it owns and does not include the
Projects' revenue, expense and other items in its financial
statements. Revenue from Projects is only recognized as it
is received as distributions by the Trust, and thus revenues
may fluctuate as the result of delays or accelerations of
distributions from Projects.
Liquidity and Capital Resources
Substantially all of the Trust's remaining uninvested
funds were applied to the purchase of a 35.7% limited
partner's interest in a limited partnership which has
acquired the Providence Project in Rhode Island, as reported
in the Trust's Current Report on Form 8-K for April 16, 1996.
The Trust has contributed $1.6 million of funds which
have been reserved by the limited partnership for
maintenance, future capital improvements and expansion of
the Project. The Trust believes that those funds held in
reserve, together with funds contributed to the limited
partnership under the same terms and conditions by Ridgewood
Electric Power Trust IV, a similar program sponsored by the
Managing Shareholder, and future cash flow are adequate to
fund all contemplated improvements.
With the investment in the Providence Project, the
Trust has substantially completed its investment program.
The Trust anticipates that remaining capital needs for the
other Projects it owns will be limited to routine
maintenance and repairs that can be funded from operating
cash flow.
<PAGE>
PART II - OTHER INFORMATION
Item #6 Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 27. Financial Data Schedule
B. Reports on Form 8-K
A Current Report on Form 8-K was filed on May 2, 1996 reporting
the acquisition of the Providence Project.
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST III
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.
RIDGEWOOD ELECTRIC POWER TRUST III
Registrant
August 13, 1996 By /s/ Robert K. Brady
Date Robert K. Brady
Senior Vice President and
Chief Financial Officer
(signing on behalf of the
Registrant and as
principal financial officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from the Registrant's unaudited interim financial
statements for the six month period ended June 30, 1996 and
is qualified in its entirety by reference to those financial
statements.
</LEGEND>
<CIK> 0000917032
<NAME> RIDGEWOOD ELECTRIC POWER TRUST III
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 3,221,614
<SECURITIES> 28,219,492<F1>
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,221,614
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 31,717,105
<CURRENT-LIABILITIES> 20,000
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 31,697,105<F2>
<TOTAL-LIABILITY-AND-EQUITY> 31,717,105
<SALES> 0
<TOTAL-REVENUES> 1,231,243
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 456,520
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 774,723
<INCOME-TAX> 0
<INCOME-CONTINUING> 774,723
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 774,723
<EPS-PRIMARY> 1977.12
<EPS-DILUTED> 1977.12
<FN>
<F1>Investments in power project partnerships.
<F2>Represents Investor Shares of beneficial interest
in Trust with capital accounts of $31,711,176 less
managing shareholder's accumulated deficit of $14,071.
</FN>
</TABLE>
