-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LxpmWdkc/IBRptLlMgGHLJerQ7fUOxMymyG1BlqGtWEjPyolLrpN0oFbgHpKuvqy 2ne3YZcfq+dclD0Ab7a67g== 0000948524-98-000096.txt : 19980826 0000948524-98-000096.hdr.sgml : 19980826 ACCESSION NUMBER: 0000948524-98-000096 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980825 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: POLARIS AIRCRAFT INCOME FUND III CENTRAL INDEX KEY: 0000806031 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 943023671 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 033-10122 FILM NUMBER: 98697299 BUSINESS ADDRESS: STREET 1: 201 HIGH RIDGE ROAD STREET 2: 27TH FL CITY: STAMFORD STATE: CT ZIP: 06927 BUSINESS PHONE: (203) 357- MAIL ADDRESS: STREET 1: 201 HIGH RIDGE ROAD STREET 2: 27TH FL CITY: STAMFORD STATE: CT ZIP: 06927 10-Q/A 1 JUNE 30, 1998 10-Q/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------- FORM 10-Q/A Amendment No. 1 ------------------- _X_ QUARTERLY REPORT PURSUANT TO 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 No. 33-10122 ------------------- POLARIS AIRCRAFT INCOME FUND III, A California Limited Partnership State of Organization: California IRS Employer Identification No. 94-3023671 201 High Ridge Road, Stamford, Connecticut 06927 Telephone - (203) 357-3776 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, and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No ___ This document consists of 4 pages. The undersigned registrant hereby amends Item 2 of its Quarterly Report on Form 10-Q for the period ended June 30, 1998 in its entirety as follows: Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations At June 30, 1998, Polaris Aircraft Income Fund III (the Partnership) owned a portfolio of 10 used McDonnell Douglas DC-9-30 aircraft leased to Trans World Airlines, Inc. (TWA) and certain inventoried aircraft parts out of its original portfolio of 38 aircraft. The Partnership transferred three McDonnell Douglas DC-9-10 aircraft and six Boeing 727-100 aircraft to aircraft inventory in 1992. The inventoried aircraft have been disassembled for sale of their component parts. Partnership Operations The Partnership recorded net income of $1,437,265, or $2.57 per limited partnership unit, for the three months ended June 30, 1998, as compared to net income of $1,868,968, or $3.08 per limited partnership unit, for the three months ended June 30, 1997. The Partnership recorded net income of $2,577,090 or $4.21 per limited partnership unit, for the six months ended June 30, 1998 compared to net income of $2,454,358, or $3.61 per limited partnership unit, for the six months ended June 30, 1997. Rental revenues, management fees and depreciation decreased during the three and six months ended June 30, 1998, as compared to the same periods in 1997, primarily due to the sale of aircraft to Triton Aviation Services III LLC (Triton) in 1997. The Partnership recorded other income of $785,094 during the six months ended June 30, 1997. This other income was primarily the result of the receipt of $743,476 during the second quarter of 1997 related to amounts due under the TWA maintenance credit and rent deferral agreement. Interest income decreased during the three and six months ended June 30, 1998, as compared to the same periods in 1997, due to the payoff of notes receivable from Continental Airlines, Inc. and Triton during 1997. Interest expense decreased during the three and six months ended June 30, 1998, as compared to the same periods in 1997, due to the continuing principal payments on the TWA hushkit notes payable. Operating expenses increased during the three and six months ended June 30, 1998 as compared to the same periods in 1997, due to an increase in legal expenses related to the sale of the remaining aircraft. The increase in the deferred income balance at June 30, 1998 is attributable to differences between the payments due and the rental income earned on the TWA leases for the 10 aircraft currently on lease to TWA. For income recognition purposes, the Partnership recognizes rental income over the life of the lease in equal monthly amounts. As a result, the difference between rental income earned and the rental payments due is recognized as deferred income. The rental payments due from TWA during the three and six months ended June 30, 1998 exceeded the rental income earned on the TWA leases, causing an increase in the deferred income balance. Liquidity and Cash Distributions Liquidity - The Partnership received all lease payments from its sole lessee, TWA, except for the June 1998 lease payment. On July 2, 1998, the Partnership received its $850,000 rental payment from TWA that was due on June 27, 1998. This amount was included in rent and other receivables on the balance sheet at June 30, 1998. In addition, payments totaling $141,981 have been received during 2 the first six months of 1998 from the sale of parts from the nine disassembled aircraft, as compared to payments of $296,247 during the same period in 1997. Polaris Investment Management Corporation, the general partner, has determined that the Partnership maintain cash reserves as a prudent measure to ensure that the Partnership has available funds in the event that the aircraft presently on lease to TWA require remarketing and for other contingencies, including expenses of the Partnership. The Partnership's cash reserves will be monitored and may be revised from time to time as further information becomes available in the future. Cash Distributions - Cash distributions to limited partners during the three months ended June 30, 1998 and 1997 were $1,449,884, or $2.90 per limited partnership unit, and $3,125,000, or $6.25 per limited partnership unit, respectively. Cash distributions to limited partners during the six months ended June 30, 1998 and 1997 were $16,248,700, or $32.50 per limited partnership unit, and $6,250,000, or $12.50 per limited partnership unit, respectively. The increase, as compared to 1997, is due to the distribution of the proceeds received from the prepayment of a note due from Triton Aviation Services III LLC on December 30, 1997. The timing and amount of future cash distributions are not yet known and will depend on the Partnership's future cash requirements (including expenses of the Partnership) and need to retain cash reserves as previously discussed in the Liquidity section; and the receipt of rental payments from TWA. 3 SIGNATURE Pursuant to the requirements of section 13 or 15(d) 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. POLARIS AIRCRAFT INCOME FUND III, A California Limited Partnership (Registrant) By: Polaris Investment Management Corporation, General Partner August 24, 1998 By: /S/Marc A. Meiches - ----------------------- ---------------------- Marc A. Meiches Chief Financial Officer (principal financial officer and principal accounting officer of Polaris Investment Management Corporation, General Partner of the Registrant) 4 -----END PRIVACY-ENHANCED MESSAGE-----