-----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, PD53PQ0nYLRcmb7Tg1TohQrf/Ur6kHgTqbp1aN1jqEgkQ6rlPe8alqxtWxdJAwHd sKIARjIQoWZ1X9lRdeuFcw== 0000950149-03-002713.txt : 20031114 0000950149-03-002713.hdr.sgml : 20031114 20031113190750 ACCESSION NUMBER: 0000950149-03-002713 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030930 FILED AS OF DATE: 20031114 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 SEC ACT: 1934 Act SEC FILE NUMBER: 033-10122 FILM NUMBER: 03999890 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 1 f94623be10vq.txt FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------------- FORM 10-Q -------------------------- [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2003 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 [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in rule 12b-2 of the Exchange Act). Yes [ ] No [X] This document consists of 15 pages. POLARIS AIRCRAFT INCOME FUND III, A CALIFORNIA LIMITED PARTNERSHIP FORM 10-Q - FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2003 INDEX
PAGE ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) a) Condensed Balance Sheets - September 30, 2003 and December 31, 2002............................................................. 3 b) Condensed Statements of Operations - Three and Nine Months Ended September 30, 2003 and 2002............................................. 4 c) Condensed Statements of Changes in Partners' Capital (Deficit) - Year Ended December 31, 2002 and Nine Months Ended September 30, 2003...................................... 5 d) Condensed Statements of Cash Flows - Nine Months Ended September 30, 2003 and 2002............................................. 6 e) Notes to Condensed Financial Statements....................................... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................. 10 Item 4. Controls and Procedures................................................... 13 PART II. OTHER INFORMATION Item 1. Legal Proceedings......................................................... 14 Item 6. Exhibits and Reports on Form 8-K.......................................... 14 Signature .......................................................................... 15
2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS POLARIS AIRCRAFT INCOME FUND III, A CALIFORNIA LIMITED PARTNERSHIP CONDENSED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 30, DECEMBER 31, 2003 2002 ---- ---- ASSETS: CASH AND CASH EQUIVALENTS $ 2,239,272 $ 4,118,926 RENT AND OTHER RECEIVABLES 81,836 179,691 AIRCRAFT HELD FOR SALE 200,000 185,000 AIRCRAFT ON OPERATING LEASE, net of accumulated depreciation of $16,146,776 in 2003 and $22,922,026 in 2002 200,000 1,681,624 OTHER ASSETS 4,126 - ------------- ------------- Total Assets $ 2,725,234 $ 6,165,241 ============= ============= LIABILITIES AND PARTNERS' CAPITAL (DEFICIT): PAYABLE TO AFFILIATES $ 36,254 $ 31,637 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 87,573 147,054 DEFERRED INCOME 33,635 350,601 ------------- ------------ Total Liabilities 157,462 529,292 ------------- ------------- PARTNERS' CAPITAL (DEFICIT): General Partner (3,864,754) (3,784,552) Limited Partners, 499,733 units in 2003 and 499,824 units in 2002 issued and outstanding 6,432,526 9,420,501 ------------- ------------- Total Partners' Capital 2,567,772 5,635,949 ------------- ------------- Total Liabilities and Partners' Capital $ 2,725,234 $ 6,165,241 ============= =============
The accompanying notes are an integral part of these condensed statements. 3 POLARIS AIRCRAFT INCOME FUND III, A CALIFORNIA LIMITED PARTNERSHIP CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2003 2002 2003 2002 ---- ---- ---- ---- REVENUES: Rent from operating leases $ 441,109 $ 640,218 $ 1,376,965 $ 1,920,654 Interest 5,555 15,113 17,624 42,276 Gain on sale of aircraft - - - 180,000 Lessee return condition settlement 44,270 - 44,270 - Lessee settlements - 47,861 76,279 47,861 ----------- ------------- ----------- ------------ Total Revenues 490,934 703,192 1,515,138 2,190,791 ----------- ------------- ----------- ------------ EXPENSES: Depreciation 803,786 438,161 1,466,624 1,315,515 Management fees to general partner 12,386 16,638 38,510 50,682 Operating 13,472 19,557 42,604 27,755 Legal fees 16,654 4,704 18,677 25,862 Administration and other 69,034 47,359 240,100 205,006 ----------- ------------- ----------- ------------ Total Expenses 915,332 526,419 1,806,515 1,624,820 ----------- ------------- ----------- ------------ NET INCOME (LOSS) $ (424,398) $ 176,773 $ (291,377) $ 565,971 =========== ============= =========== ============ NET INCOME (LOSS) ALLOCATED TO THE GENERAL PARTNER $ (4,244) $ 1,768 $ 197,478 $ 233,695 =========== ============= =========== ============ NET INCOME (LOSS) ALLOCATED TO LIMITED PARTNERS $ (420,154) $ 175,005 $ (488,855) $ 332,276 =========== ============= =========== ============ NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT $ (0.84) $ 0.35 $ (0.98) $ 0.66 =========== ============= =========== ============
The accompanying notes are an integral part of these condensed statements. 4 POLARIS AIRCRAFT INCOME FUND III, A CALIFORNIA LIMITED PARTNERSHIP CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (UNAUDITED)
YEAR ENDED DECEMBER 31, 2002 AND NINE MONTHS ENDED SEPTEMBER 30, 2003 GENERAL LIMITED PARTNER PARTNERS TOTAL ------- -------- ----- Balance, December 31, 2001 $(3,880,841) $ 10,192,419 $ 6,311,578 Net income 235,167 477,982 713,149 Cash distribution to partners (138,878) (1,249,900) (1,388,778) ----------- ------------- ------------ Balance, December 31, 2002 (3,784,552) 9,420,501 5,635,949 Net income (loss) 197,478 (488,855) (291,377) Cash distribution to partners (277,680) (2,499,120) (2,776,800) ----------- ------------- ------------ Balance, September 30, 2003 $(3,864,754) $ 6,432,526 $ 2,567,772 =========== ============= ============
The accompanying notes are an integral part of these condensed statements. 5 POLARIS AIRCRAFT INCOME FUND III, A CALIFORNIA LIMITED PARTNERSHIP CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 2003 2002 ---- ---- OPERATING ACTIVITIES: Net income (loss) $ (291,377) $ 565,971 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 1,466,624 1,315,515 Gain on sale of aircraft - (180,000) Changes in operating assets and liabilities: Decrease (increase) in rent and other receivables 97,855 (320) Increase (decrease) in payable to affiliates 4,617 (388,111) Decrease in accounts payable and accrued liabilities (59,481) (65,927) Decrease in deferred income (316,966) (480,653) Increase in other assets (4,126) - ------------ ------------- Net cash provided by operating activities 897,146 766,475 ------------ ------------- INVESTING ACTIVITIES: Proceeds from sale of aircraft - 550,000 ------------ ------------- Net cash provided by investing activities - 550,000 ------------ ------------- FINANCING ACTIVITIES: Cash distributions to partners (2,776,800) (1,388,778) ------------ ------------- Net cash used in financing activities (2,776,800) (1,388,778) ------------ ------------- CHANGES IN CASH AND CASH EQUIVALENTS (1,879,654) (72,303) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,118,926 3,784,951 ------------ ------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,239,272 $ 3,712,648 ============ ============= NON-CASH INVESTING AND FINANCING ACTIVITIES: Transfer of operating lease assets to assets held for sale $ 100,000 $ - ============ =============
The accompanying notes are an integral part of these condensed statements. 6 POLARIS AIRCRAFT INCOME FUND III, A CALIFORNIA LIMITED PARTNERSHIP NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1. ORGANIZATION AND THE PARTNERSHIP Polaris Aircraft Income Fund III, A California Limited Partnership (the Partnership), was formed on June 27, 1984 for the purpose of acquiring and leasing aircraft. The Partnership will terminate no later than December 2020. Upon organization, both the General Partner and the initial Limited Partner contributed $500 to capital. The Partnership recognized no profits and losses during the periods ended December 31, 1984, 1985 and 1986. The offering of depositary units (units), representing assignments of Limited Partnership interest, terminated on September 30, 1987 at which time the Partnership had sold 500,000 units of $500, representing $250,000,000. All unit holders were admitted to the Partnership on or before September 30, 1987. During January 1998, 40 units were redeemed by the Partnership in accordance with section 18 of the Limited Partnership Agreement (the Agreement). During the three months ended September 30, 2003, 13 units were abandoned. At September 30, 2003, there were 499,733 units outstanding, net of redemptions. Polaris Investment Management Corporation (PIMC), the sole General Partner of the Partnership (the General Partner), supervises the day-to-day operations of the Partnership. Polaris Depository Company III (PDC) serves as the depositary. PIMC and PDC are wholly-owned subsidiaries of Polaris Aircraft Leasing Corporation (PALC). Polaris Holding Company (PHC) is the parent company of PALC. General Electric Capital Corporation (GE Capital), an affiliate of General Electric Company, owns 100% of PHC's outstanding common stock. PIMC has entered into a services agreement dated as of July 1, 1994 with GE Capital Aviation Services, Inc. (GECAS). Amounts paid and allocations to affiliates are described in Notes 3 and 4. At September 30, 2003, the Partnership owned a portfolio of four used McDonnell Douglas DC-9-30 commercial jet aircraft out of its original portfolio of 38 aircraft. Two of these aircraft are on lease to TWA Airlines LLC (TWA LLC), a wholly owned subsidiary of American Airlines, Inc. (American). The two remaining aircraft are stored in New Mexico and are being remarketed for sale. NOTE 2. ACCOUNTING PRINCIPLES AND POLICIES In the opinion of management, the condensed financial statements presented herein include all adjustments, consisting only of normal recurring items, necessary to summarize fairly the Partnership's financial position and results of operations. The financial statements have been prepared in accordance with the instructions of the Quarterly Report to the Securities and Exchange Commission (SEC) Form 10-Q. The condensed balance sheet at December 31, 2002, has been derived from the audited financial statements at that date but does not include all of the information and note disclosures required by accounting principles generally accepted in the United States (GAAP). These statements should be read in conjunction with the financial statements and notes thereto for the years ended December 31, 2002, 2001, and 2000 included in the Partnership's 2002 Annual Report to the SEC on Form 10-K. Certain prior period amounts have been reclassified to conform to the current period presentation. 7 NOTE 3. RELATED PARTIES Under the Agreement, the Partnership paid or agreed to pay the following amounts for the current quarter to the General Partner, PIMC, in connection with services rendered or payments made on behalf of the Partnership:
PAYMENTS MADE DURING THE THREE MONTHS ENDED PAYABLE AT SEPTEMBER 30, 2003 SEPTEMBER 30, 2003 ------------------ ------------------ Aircraft Management Fees $ 18,000 $ 6,519 Out-of-Pocket Operating Expense Reimbursement 45,922 24,805 Out-of-Pocket Administrative Expense Reimbursement 78,665 4,930 ------------ ----------- $ 142,587 $ 36,254 ============ ============
NOTE 4. PARTNERS' CAPITAL The Agreement stipulates different methods by which revenue, income and loss from operations and gain or loss on the sale of aircraft are to be allocated to the General Partner and the limited partners. Such allocations are made using income or loss calculated under GAAP for book purposes, which varies from income or loss calculated for tax purposes. Cash available for distributions, including the proceeds from the sale of aircraft, is distributed 10% to the General Partner and 90% to the limited partners. The different methods of allocating items of income, loss and cash available for distribution combined with the calculation of items of income and loss for book and tax purposes result in book basis capital accounts that may vary significantly from tax basis capital accounts. The ultimate liquidation and distribution of remaining cash will be based on the tax basis capital accounts following liquidation, in accordance with the Agreement. NOTE 5. AIRCRAFT AND DEPRECIATION The Partnership periodically reviews the estimated realizability of the residual values at the projected end of each aircraft's economic life. For any downward adjustment in estimated residual value or decrease in the projected remaining economic life, the depreciation expense over the projected remaining economic life of the aircraft will be increased. If the projected net cash flow for each aircraft (projected rental revenue, net of management fees, less projected maintenance costs, if any, plus the estimated residual value) is less than the carrying value of the aircraft, an impairment loss is recognized. Pursuant to Statement of Financial Accounting Standards 144 "Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS 144), measurement of 8 an impairment loss will be based on the "fair value" of the asset as defined in the statement. During the nine months ended September 30, 2003, the Partnership recognized additional depreciation expense of $316,999 as a result of determining that future net cash flows were less than the carrying value of aircraft on operating lease. Aircraft held for sale are carried at the lower of cost or fair value less cost to sell. During the nine months ended September 30, 2003, the Partnership also recognized additional depreciation expense of $170,000 on aircraft held for sale due to changes in estimated fair market values. Management believes the assumptions related to the fair value of impaired assets represents the best estimates based on reasonable and supportable assumptions and projections. NOTE 6. SALE OF AIRCRAFT On February 13, 2002, the General Partner, on behalf of the Partnership, sold one DC-9-30 aircraft to Amtec Corporation for $250,000 in cash. The Partnership recognized a gain on the sale of $65,000 in the three months ended March 31, 2002. On May 29, 2002, PIMC, on behalf of the Partnership, sold one DC-9-30 aircraft to American Airlines for $300,000 in cash. The Partnership recognized a gain on the sale of $115,000. 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS BUSINESS OVERVIEW At September 30, 2003, Polaris Aircraft Income Fund III, A California Limited Partnership (the Partnership), owned a portfolio of four used McDonnell Douglas DC-9-30 commercial jet aircraft out of its original portfolio of 38 aircraft. Two of these aircraft are on lease to TWA Airlines LLC (TWA LLC), a wholly owned subsidiary of American Airlines, Inc. (American). All remaining leases will expire by December 31, 2003, after which these aircraft will be remarketed for sale. The two remaining aircraft are being stored in New Mexico and are being remarketed for sale. The Partnership plans to liquidate all its assets in an orderly manner, make a final distribution, and terminate the Partnership thereafter; however, it is uncertain when this liquidation will occur because the General Partner is unable to predict when all of the Partnership's remaining assets will be sold. This discussion should be read in conjunction with the management's discussion included in the Partnership's 2002 Annual Report to the SEC on Form 10-K. PARTNERSHIP OPERATIONS The Partnership recorded a net loss of $424,398, or $0.84 per limited partnership unit, for the three months ended September 30, 2003, as compared to net income of $176,773, or $0.35 per limited partnership unit, for the three months ended September 30, 2002. The Partnership recorded a net loss of $291,377, which resulted in a loss of $0.98 per limited partnership unit, for the nine months ended September 30, 2003, compared to net income of $565,971, or $0.66 per limited partnership unit, for the nine months ended September 30, 2002. The decreases in net income are primarily due to an increase in write downs on aircraft on operating leases and held for sale, decreases in rental and interest income and no recognized gains on sale of aircraft, as well as increases in operating expenses, partially offset by an increase in revenues from lessee return condition settlement and decreases in depreciation and management fees to the General Partner, as discussed below. Rent from operating leases decreased to $441,109 and $1,376,965 in the three and nine months ended September 30, 2003, respectively, as compared to $640,218 and $1,920,654 for the respective periods in 2002 primarily due to fewer aircraft on lease. Additionally, the decrease in rent from operating leases was also caused by lower recognition of deferred revenue of $101,110 and $316,966 in the three and nine months ended September 30, 2003, respectively, as compared to $160,218 and $480,653 in the same periods in 2002. Interest income decreased during the three and nine months ended September 30, 2003, as compared to the same periods in 2002, primarily due to lower average cash reserves and lower interest rates over the same periods. There was no recognized gain on sale of aircraft during the nine months ended September 30, 2003, as compared to the same period in 2002, due to the sale of two of the Partnership's aircraft during 2002, resulting in a gain of $180,000. There were no aircraft sales in 2003. Lessee settlements increased during the nine months ended September 30, 2003, as compared to the same periods in 2002. The increase for the nine months ended September 30, 2003, was due to a payment of $76,279 received in the second quarter of 2003, from TWA's bankrupt estate which represents a portion of the $465,277 administrative rent claims. 10 Lessee return condition settlement increased during the three and nine months ended September 30, 2003, as compared to the same periods in 2002. The increase for both periods ended September 30, 2003, was due to a payment received based on the returned condition of an aircraft that went off lease on September 15, 2003. Depreciation expense increased during the three and nine months ended September 30, 2003, as compared to the same periods in 2002, primarily because the General Partner determined that the carrying value of the aircraft on lease and held for sale exceeded current fair market value based on recent purchase offers on the aircraft held for sale and therefore recognized additional depreciation expense. No such adjustments to market value through additional depreciation expense were made during the 2002 period. Management fees to the General Partner decreased for the three and nine months ended September 30, 2003, as compared to the same periods in 2002, primarily as a result of fewer aircraft being on lease. Operating expense decreased during the three months ended September 30, 2003, as compared to the same period in 2002, primarily due to insurance. This was offset by increased maintenance and storage costs associated with the aircraft as they came off lease and were held for sale. Operating expense increased during the nine months ended September 30, 2003, as compared to the same period in 2002, primarily due to maintenance and storage related costs associated with the aircraft as they came off lease and were held for sale. At September 30, 2003, there were two aircraft remaining in storage. Administration and other expense increased during the three and nine months ended September 30, 2003, as compared to the same periods in 2002, primarily due to increased audit fees and printing and postage. Legal fees increased for the three months ended September 30, 2003; however they decreased for the nine months ended September 30, 2003. The increase for the three months ended September 30, 2003 is due to an increase in various SEC and investor report matters. Legal fees were higher for the nine months ended September 30, 2002, due to legal fees incurred to comply with an SEC prompted court order related to transfers of units to entities owned by an investor. There were no such fees in the 2003 period. LIQUIDITY AND CASH DISTRIBUTIONS LIQUIDITY - The Partnership received all payments due from its sole lessee, TWA Airlines LLC, for the aircraft remaining on lease during the nine months ended September 30, 2003. PIMC, the General Partner, has determined that cash reserves be maintained as a prudent measure to ensure that the Partnership has available funds for winding up the affairs of the Partnership and for other contingencies. The Partnership plans to liquidate all its assets in an orderly manner, make a final distribution, and terminate the Partnership thereafter; however, it is uncertain when this liquidation will occur because the General Partner is unable to predict when all of the Partnership's remaining assets will be sold. The Partnership's cash reserves will be monitored and may be revised from time to time as further information becomes available in the future. 11 CASH DISTRIBUTIONS - Cash distributions to limited partners during the nine months ended September 30, 2003 and 2002, were $2,499,120, or $5.00 per limited partnership unit, and $1,249,900, or $2.50 per unit, respectively. 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), the need to retain cash reserves as previously discussed in the Liquidity section, the receipt of rental payments from TWA LLC, and payments generated from aircraft sales proceeds. 12 ITEM 4. CONTROLS AND PROCEDURES As required by Rule 13a-15(b), PIMC management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation as of the end of the period covered by this report, of the effectiveness of the Partnership's disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Partnership's disclosure controls and procedures were effective as of the end of the period covered by this report. As required by Rule 13a-15(d), PIMC management, including the Chief Executive Officer and Chief Financial Officer, also conducted an evaluation of the Partnership's internal control over financial reporting to determine whether any changes occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, the Partnership's internal control over financial reporting. Based on that evaluation, there has been no such change during the quarter covered by this report. 13 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS As discussed in Item 3 of Part I of Polaris Aircraft Income Fund III's (the Partnership) 2002 Annual Report to the Securities and Exchange Commission (SEC) on Form 10-K (Form 10-K) and in Item 1 of Part II of the Partnership's Quarterly Report to the SEC on Form 10-Q (Form 10-Q) for the period ended June 30, 2003, there is one pending legal proceeding involving the Partnership. There have been no material developments with respect to such proceeding during the period covered by this report. OTHER PROCEEDINGS - Item 10 in Part III of the Partnership's 2002 Form 10-K and Item 1 of Part II of the Partnership's Quarterly Report to the SEC on Form 10-Q for the period ended June 30, 2003 discuss certain actions which have been filed against Polaris Investment Management Corporation and others in connection with the sale of interests in the Partnership and the management of the Partnership. The Partnership is not a party to these actions. There have been no material developments with respect to any of the actions described therein during the period covered by this report. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits (numbered in accordance with Item 601 of Regulation S-K) 31.1 CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. b) Reports on Form 8-K No reports on Form 8-K were filed by the Registrant during the quarter for which this report is filed. 14 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 November 14, 2003 By: /s/ Stephen E. Yost ------------------------------- Stephen E. Yost, Chief Financial Officer 15 EX-31.1 3 f94623bexv31w1.txt EXHIBIT 31.1 EXHIBIT 31.1 POLARIS AIRCRAFT INCOME FUND III, A CALIFORNIA LIMITED PARTNERSHIP QUARTERLY CERTIFICATION I, William R Carpenter, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Polaris Aircraft Income Fund III (A California Limited Partnership); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 14, 2003 By: Polaris Investment Management Corporation General Partner /s/ William R. Carpenter - ------------------------------------ William R. Carpenter President EX-31.2 4 f94623bexv31w2.txt EXHIBIT 31.2 EXHIBIT 31.2 POLARIS AIRCRAFT INCOME FUND III, A CALIFORNIA LIMITED PARTNERSHIP QUARTERLY CERTIFICATION I, Stephen E. Yost, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Polaris Aircraft Income Fund III (A California Limited Partnership); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 14, 2003 By: Polaris Investment Management Corporation General Partner /s/ Stephen E. Yost - ---------------------------------- Steven E. Yost Chief Financial Officer EX-32.1 5 f94623bexv32w1.txt EXHIBIT 32.1 EXHIBIT 32.1 POLARIS AIRCRAFT INCOME FUND III, A CALIFORNIA LIMITED PARTNERSHIP CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of Polaris Investment Management Corporation (the General Partner), does hereby certify, to such officer's knowledge, that: The Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 of Polaris Aircraft Income Fund III (A California Limited Partnership) (the Partnership) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Partnership. Dated: November 14, 2003 /s/ William R Carpenter - --------------------------------------- Name: William R. Carpenter Title: President of Polaris Investment Management Corporation (the General Partner) Dated: November 14, 2003 /s/ Stephen E. Yost - --------------------------------------- Name: Stephen E Yost Title: Chief Financial Officer of Polaris Investment Management Corporation (the General Partner) A signed original of this written statement required by Section 906 or other document authenticating, acknowledging, or otherwise adopting the signatures that appear in typed form within the electronic version of this written statement required by Section 906, has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----