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 September 30, 1996
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:
PART I - FINANCIAL INFORMATION
CSA INCOME FUND LIMITED PARTNERSHIP III
CSA INCOME FUND LIMITED PARTNERSHIP III
STATEMENTS OF FINANCIAL POSITION AS OF SEPTEMBER 30, 1996 (UNAUDITED)
AND DECEMBER 31, 1995
______________________________________________________________________
(Unaudited)
September 30, December 31,
1996 1995
Assets
Cash and cash equivalents $ 2,816,372 $ 6,210,985
Rentals receivable 244,232 5,928
Accounts receivable-affiliates 632,921 200,169
Interest receivable 9,840 15,626
Notes receivable-lessee 85,000 85,000
Remarketing receivables 53,883 234,381
Rental equipment, at cost 28,875,710 26,648,802
Less accumulated depreciation (12,603,462) (15,490,492)
Net rental equipment 16,272,248 11,158,310
Total assets $ 20,114,496 $ 17,910,399
Liabilities and partners' capital
Liabilities:
Accounts payable - affiliates $ - $ 37,928
Accounts payable - other 27,876 36,803
Accrued management fees 39,032 49,632
Deferred income 222,876 450,786
Notes payable 9,500,752 5,609,093
Limited recourse notes payable 26,656 38,009
Total liabilities 9,817,192 6,222,251
Partners' capital:
General Partner:
Capital contribution 1,000 1,000
Cumulative net gain 12,098 3,279
Cumulative cash distributions (354,087) (331,360)
(340,989) (327,081)
Limited Partners (500,000 units):
Capital contributions net of
offering costs 44,539,778 44,539,778
Cumulative net gain 1,197,730 324,666
Cumulative cash distributions (35,099,215) (32,849,215)
10,638,293 12,015,229
Partners' capital 10,297,304 11,688,148
Total liabilities and
partners' capital $ 20,114,496 $ 17,910,399
CSA INCOME FUND LIMITED PARTNERSHIP III
STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE AND NINE MONTH
PERIODS ENDED SEPTEMBER 30, 1996 AND 1995
______________________________________________________________________
THREE MONTHS NINE MONTHS
1996 1995 1996 1995
Revenues:
Rental income $ 1,988,222 $ 2,084,979 $ 5,332,640 $ 7,380,181
Interest income 25,276 62,151 105,921 157,853
Gain on sale
of equipment 838 380,621 259,927 675,028
Gain (loss) on
foreign currency (3,706) (1,534) (5,442) 8,316
Total revenues 2,010,630 2,526,217 5,693,046 8,221,378
Costs and expenses:
Depreciation 1,441,138 1,649,794 3,994,236 5,713,194
Interest 179,620 106,244 413,351 313,290
Management fees 99,411 104,249 266,632 369,009
Storage and
Refurbishment 7,000 17,000 19,000 27,000
General and
administrative 38,235 44,038 117,944 152,548
Total expenses 1,765,404 1,921,325 4,811,163 6,575,041
Net income $ 245,226 $ 604,892 $ 881,883 $ 1,646,337
Net income allocation:
General Partner $ 2,452 $ 6,049 $ 8,819 $ 16,463
Limited Partners 242,774 598,843 873,064 1,629,874
$ 245,226 $ 604,892 $ 881,883 $ 1,646,337
Net income per
Limited Partnership
Unit $ .49 $ 1.20 $ 1.75 $ 3.26
Number of Limited
Partnership Units 500,000 500,000 500,000 500,000
CSA INCOME FUND LIMITED PARTNERSHIP III
STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE AND NINE MONTH
PERIODS ENDED SEPTEMBER 30, 1996 AND 1995
______________________________________________________________________
THREE MONTHS NINE MONTHS
1996 1995 1996 1995
Cash flows from
operations:
Cash received from
rental of
equipment $ 1,997,001 $ 3,958,859 $ 4,877,596 $ 7,732,228
Cash paid for
operating and
management expenses (137,748) (209,500) (423,103) (580,637)
Interest paid (179,620) (227,038) (413,351) (303,505)
Interest received 21,103 62,151 111,707 157,853
Net cash from
operations 1,700,736 3,584,472 4,152,849 7,005,939
Cash flows from
investments:
Value added tax
reimbursed - - - 239,724
Purchase of
equipment (856,865) (1,506,888) (10,175,250) (1,862,468)
Sale of equipment 30,046 885,153 1,490,889 2,023,162
Net cash from (used
by) investments (826,819) (621,735) (8,684,361) 400,418
Cash flows from
financing:
Accounts payable -
equipment purchases - - - (98,995)
Increase in accounts
receivable-affiliate 1,282,788 (36,918) (470,680) (320,321)
Proceeds from notes
payable 1,666,225 1,554,325 6,416,017 1,812,862
Repayment of notes
payable (1,104,590) (3,702,812) (2,535,711) (5,365,456)
Payment of cash
distributions (757,575) (757,575) (2,272,727) (2,272,727)
Net cash used by
financing 1,086,848 (2,942,980) 1,136,899 (6,244,637)
Net change in cash and
and cash equivalents 1,960,765 19,757 (3,394,613) 1,161,720
Cash and cash equivalents
at beginning of period 855,607 4,212,409 6,210,985 3,070,446
Cash and cash equivalents
at end of period $2,816,372 $4,232,166 $2,816,372 $4,232,166
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, 1995.
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 September
30, 1996 and December 31, 1995 and the results of operations and cash
flows for the periods presented therein.
CSA INCOME FUND LIMITED PARTNERSHIP III
GENERAL PARTNER'S DISCUSSION OF OPERATIONS
______________________________________________________________________
Gross rental income was $1,988,222 and $2,084,979 and net income was
$245,226 and $604,892 for the quarters ended September 30, 1996 and
1995, respectively. For the nine months ended September 30, 1996 and
September 30, 1995, gross rental income was $5,332,640 and $7,380,181
and net income was $881,883 and $1,646,337, respectively. The decrease
in gross rental income in 1996 is attributable to the reduced rental
rates for re-leased equipment and to the sale of equipment from the
Partnership's portfolio. The decrease in net income in 1996 is the
result of the decrease in gross rental income as well as a lower level
of gains on sales of equipment. Additionally, the Partnership
incurred a higher level of interest expense as more leases were
financed during the second and third quarters of 1996.
The Partnership generated $5,643,738 from operations and the sale of
equipment during the nine months ended September 30, 1996. The
Partnership used these funds, proceeds from equipment financings and
cash on hand to acquire additional equipment of $10,175,250, make
scheduled debt payments of $2,535,711 and pay cash distributions to
the partners of $2,272,727.
The Partnership distributed $.50 per Limited Partnership Unit on the
15th of July, August and September. To date, the Partnership has made
cash distributions to the Limited Partners ranging from 62% to 78% 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, revenues
generated by the Partnership from lease renewals and remarketings
after the initial lease terms have been lower than anticipated as a
result of rapid technological 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 Partnership's 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.
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 - No reports have been filed on Form
8-K during this quarter.
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: November 14, 1996 /s/ J. Frank Keohane
President and
Principal Executive Officer
Date: November 14, 1996 /s/ Richard F. Sullivan
Vice President
Principal Accounting and
Finance Officer