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 March 31, 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>
March 31, December 31,
1996 1995
<S> <C> <C>
Assets
Cash and cash equivalents $ 5,382,783 $ 10,972,576
Investments in power
project partnerships 26,440,816 20,884,493
Due from affiliates 0 299,194
Interest receivable 40,030 0
Other assets 310,655 444,172
Total assets $ 32,174,284 $ 32,651,668
Liabilities and Share-
holders' Equity
Accounts payable and
accrued expenses $ 22,500 $ 72,442
Due to unconsolidated
subsidiary 180,000 0
202,500 72,442
Shareholders' equity
(391.8444 shares issued
and outstanding) 31,983,108 32,584,476
Managing shareholder's
accumulated deficit (11,324) (5,250)
Total shareholders' equity 31,971,784 32,579,226
Total liabilities and
shareholders' equity $ 32,174,284 $ 32,651,668
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
RIDGEWOOD ELECTRIC POWER TRUST III
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
AND MARCH 31, 1995
(Unaudited)
<CAPTION>
Three months Three months
ended March 31, ended March 31,
1996 1995
______________ ______________
<S> <C> <C>
Income from power genera-
tion projects $ 145,777 $ 0
Dividend and interest
income 132,605 129,020
Total income 278,382 129,020
Management fee 204,860 0
Administrative and
other expenses 13,339 14,199
Investment fee 0 228,666
Total expenses 218,199 242,865
Net income (loss) $ 60,183 $(113,845)
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
RIDGEWOOD ELECTRIC POWER TRUST III
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
AND MARCH 31, 1995
(Unaudited)
<CAPTION>
Three months ended March 31,
1996 1995
____________ ____________
<S> <C> <C>
Cash flows from operating
activities:
Net income $ 60,183 $ (113,845)
Adjustmentsto
reconcile net income
to cash provided (used)
in operating activities:
Purchase of investments in
power generation partner-
ships (5,556,323) (7,479,688)
Changes in assets &
liabilities:
Increase (decrease) in
due from affiliates 299,194 0
Decrease (increase)in
interest receivable 11,203 0
Decrease (increase) in
other assets 133,517 0
Increase (decrease) in
due to unconsolidated
subsidiary 180,000 0
Increase (decrease) in
accounts payable and
accrued expenses (49,942) 165,594
Total adjustments (4,982,351) (7,314,094)
Net cash used in
operating activities (4,922,168) (7,427,949)
Cash provided by (used by)
financing activities:
Net proceeds from the sale
of Trust shares 0 9,432,283
Cash distributions to
Shareholders (667,625) (346,098)
Net increase (decrease)
in cash and cash equivalents (5,589,793) 1,658,246
Cash and cash equivalents
- Beginning of period 10,972,576 18,237,615
Cash and cash equivalents
- End of period $5,382,783 $19,895,861 0
<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.
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.
3. Subsequent Event
Northeast Landfill Power Joint Venture
The Trust, together with Ridgewood Electric Power Trust
IV, formed a partnership, Ridgewood Providence Power
Partners, L.P. ("RPLP") to acquire certain of the assets
of Northeast Landfill Power Joint Venture which owns and
operates a 12.3 (net) megawatt landfill gas fired electric
generation facility located in Johnston, Rhode Island.
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST III
NOTES TO FINANCIAL STATEMENTS
This acquisition was completed on April 16, 1996. The
Trust's investment in RPLP including provision of funds to
perform post-acquisition improvements to the plant and
increase the salable electric power pursuant to a new 2 mw
power sale agreement with the same power purchaser, was
about $7.1 million for a 36% interest in RPLP. Ridgewood
Electric Power Trust IV invested about $12.9 million for a
64% interest. As part of the acquisition cost, RPLP
assumed three non-recourse notes, totaling $6.3 million
payable to insurance companies, maturing in September
2004, with a 9.6% interest rate. The monthly installments
total about $1.1 million annually.
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST III
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Three months ended March 31, 1996 versus three months ended
March 31, 1995
Results of Operations
For the quarter ended March 31, 1996, the Trust's net
income of $278,000 was comprised of $133,000 of interest on
funds awaiting investment and $146,000 of distributions from
Projects located in California and owned by the Trust:
$69,000 from the San Joaquin Project and $79,000 from the
Byron Project. This compares to income of $129,000 in the
same period of 1995, comprised solely of interest on funds
awaiting investment. Because the Trust has completed its
investment program, interest income in future quarters will
be substantially less than in the first quarter of 1996.
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 major maintenance tends to be scheduled. No
distributions were made from the Projects acquired by
the Trust from EUA Cogenix Corporation in late 1995. During
the first quarter of 1996, cash flow from those Projects was
retained to increase working capital and to fund substantial
maintenance and equipment upgrade expenditures. The Trust
now believes that these Projects will begin distributions
to the Trust during the second quarter of 1996.
The major component of the $218,000 of expenses for the
quarter ended March 31, 1996 was the management fee of
$205,000. Accounting and legal fees related to the Trust's
annual reporting requirements made up most of the remaining
$13,000 of expenses in that quarter. For the first quarter
of 1995, no management fee was charged because the offering
of Shares was in progress. An investment fee of $229,000
was charged on Share purchases made in the quarter,
as provided by the Trust's offering documents.
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 34.1% 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 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
No reports have been filed on Form 8-K during this quarter.
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 cause this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
RIDGEWOOD ELECTRIC POWER TRUST III
Registrant
May 20, 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 theRegistrant's unaudited interim financial
statements for the quarter ended March 31, 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 5,382,783
<SECURITIES> 26,440,816<F1>
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,382,783
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 32,174,284
<CURRENT-LIABILITIES> 202,500
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 31,971,784<F2>
<TOTAL-LIABILITY-AND-EQUITY> 32,174,284
<SALES> 0
<TOTAL-REVENUES> 278,382
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 218,199
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 60,183
<INCOME-TAX> 0
<INCOME-CONTINUING> 60,183
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 60,183
<EPS-PRIMARY> 153.59
<EPS-DILUTED> 153.59
<FN>
<F1>Investments in power project partnerships.
<F2>Represents Investor Shares of beneficial interest in
Trust with capital accounts of $31,983,108 less managing
shareholder's accumulated deficit of $11,324.
</FN>
</TABLE>
