TEXTAINER FINANCIAL SERVICES CORPORATION
                        650 California Street, 16th Floor
                             San Francisco, CA 94108


March 28, 2002


Securities and Exchange Commission
Washington, DC  20549

Ladies and Gentlemen:

Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,  we are
submitting herewith for filing on behalf of Textainer Equipment Income Fund III,
L.P. (the  "Partnership")  the Partnership's  Annual Report on Form 10-K for the
fiscal year ended December 31, 2001.

The financial  statements included in the enclosed Annual Report on Form 10-K do
not reflect a change from the  preceding  year in any  accounting  principles or
practices, or in the method of applying any such principles or practices.

This filing is being effected by direct  transmission to the Commission's  EDGAR
System.

Sincerely,

Nadine Forsman
Controller
<PAGE>
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                               Washington DC 20549

                                    FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2001

                         Commission file number 0-20140

                    TEXTAINER EQUIPMENT INCOME FUND III, L.P.
                    -----------------------------------------
             (Exact name of Registrant as specified in its charter)

           California                                          94-3121277
  (State or other jurisdiction                               (IRS Employer
of incorporation or organization)                          Identification No.)

 650 California Street, 16th Floor
          San Francisco, CA                                       94108
(Address of Principal Executive Offices)                        (ZIP Code)

                                 (415) 434-0551
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

                                      NONE

Securities registered pursuant to Section 12(g) of the Act:

                      LIMITED PARTNERSHIP DEPOSITARY UNITS
                                (TITLE OF CLASS)

              LIMITED PARTNERSHIP INTERESTS (UNDERLYING THE UNITS)
                                (TITLE OF CLASS)

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.
[ X ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
[ X ]

State the aggregate  market value of the voting stock held by  nonaffiliates  of
the Registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold,  or the  average  bid and ask  prices of such
stock, as of a specified date within 60 days prior to the date of the filing.

Not Applicable.
--------------

Documents Incorporated by Reference

The Registrant's Prospectus as contained in Pre-Effective Amendment No. 2 to the
Registrant's Registration Statement dated and filed with the Commission December
21, 1990, as supplemented by Post-Effective Amendments No. 1, 2 and 3 filed with
the  Commission  under  Section 8(c) of the  Securities  Act of 1933 on March 1,
1991, January 13, 1992 and February 4, 1992, respectively.
<PAGE>

                                     PART I

ITEM 1.      DESCRIPTION OF BUSINESS

For more detailed information about the Registrant's  business, see "Business of
the Partnership" in the Registrant's Prospectus as supplemented.

(a)            General Development of Business

               The Registrant is a California Limited Partnership formed on July
               26, 1990 to purchase,  own,  operate,  lease,  and sell equipment
               used in the containerized cargo shipping industry. The Registrant
               commenced   offering  units  representing   limited   partnership
               interests (Units) to the public on January 16, 1991 in accordance
               with its Registration  Statement,  and ceased to offer such Units
               as of May 4, 1992. The Registrant  raised a total of $125,000,000
               from the offering and invested a substantial portion of the money
               raised in equipment.  The Registrant has since engaged in leasing
               this and other equipment in the international shipping industry.

               In April 2002,  the  Registrant  will enter into its  liquidation
               phase.  During this phase,  the Registrant  will no longer add to
               its container  fleet but will instead sell its  containers (i) in
               one or more large transactions or (ii) gradually,  either as they
               reach the end of their  useful  marine  lives or when an analysis
               indicates that their sale is warranted  based on existing  market
               conditions and the container's age, location and condition. Sales
               proceeds,  after reserves for working capital,  will generally be
               distributed to the Partners.  The  Registrant  will be terminated
               and  dissolved on the earlier of December 31, 2010 or the sale of
               all or substantially all of its equipment.

               See Item 10 herein for a description of the Registrant's  General
               Partners.  See Item 7 herein for a description  of current market
               conditions affecting the Registrant's business.

(b)            Financial Information About Industry Segments

               Inapplicable.

(c)            Narrative Description of Business

(c)(1)(i)      A  container  leasing  company   generally,   and  the Registrant
               specifically,   is   an  operating   business   comparable  to  a
               rental  car  business.  A  customer  can  lease a car from a bank
               leasing department for a monthly charge which represents the cost
               of the car, plus interest,  amortized over the term of the lease;
               or the  customer  can rent the same car from a rental car company
               at a much higher daily lease rate. The customer is willing to pay
               the  higher  daily  rate  for  the  convenience  and  value-added
               features  provided by the rental car company,  the most important
               of  which  is the  ability  to pick up the car  where  it is most
               convenient,  use it for the desired period of time, and then drop
               it off at a  location  convenient  to the  customer.  Rental  car
               companies  compete  with one another on the basis of lease rates,
               availability  of cars, and the provision of additional  services.
               They generate revenues by maintaining the highest lease rates and
               the  highest  utilization  factors  that market  conditions  will
               allow,  and by augmenting this income with proceeds from sales of
               insurance,  drop-off  fees,  and other special  charges.  A large
               percentage of lease revenues  earned by car rental  companies are
               generated under corporate rate agreements  wherein,  for a stated
               period of time, employees of a participating corporation can rent
               cars at specific terms, conditions and rental rates.

               Container  leasing  companies  and the  Registrant  operate  in a
               similar  manner  by  owning  a  worldwide  fleet  of new and used
               transportation   containers  and  leasing  these   containers  to
               international  shipping  companies hauling various types of goods
               among numerous trade routes.  All lessees pay a daily rental rate
               and in certain  markets  may pay  special  handling  fees  and/or
               drop-off charges. In addition to these fees and charges, a lessee
               must either provide  physical  damage and liability  insurance or
               purchase a damage waiver from the  Registrant,  in which case the
               Registrant  agrees to pay the cost of repairing  certain physical
               damage to containers.  Container  leasing  companies compete with
               one another on the basis of lease rates,  fees charged,  services
               provided   and   availability   of   equipment.   To  ensure  the
               availability  of equipment to its  customers,  container  leasing
               companies and the  Registrant  may pay to  reposition  containers
               from  low  demand  locations  to  higher  demand  locations.   By
               maintaining  the highest  lease  rates and the highest  equipment
               utilization factors allowed by market conditions,  the Registrant
               attempts to generate revenue and profit.

               The majority of the Registrant's equipment is leased under master
               leases,  which are  comparable to the corporate  rate  agreements
               used by rental car companies.  The master leases provide that the
               lessee,  for a specified  period of time, may rent  containers at
               specific terms,  conditions and rental rates.  Although the terms
               of the master lease  governing each container  under lease do not
               vary,  the number of containers in use can vary from time to time
               within the term of the master lease.  The terms and conditions of
               the master lease provide that the lessee pays a daily rental rate
               for the entire time the container is in his  possession  (whether
               or not he is actively using it), is  responsible  for any damage,
               and must insure the container  against  liabilities.  Some of the
               Partnership's   equipment   is  leased  under   long-term   lease
               agreements.  Unlike  master  lease  agreements,  long-term  lease
               agreements  provide  for  containers  to be leased for periods of
               between three to five years. Such leases are generally cancelable
               with a  penalty  at the end of each  twelve-month  period.  Under
               direct finance leases, the containers are usually leased from the
               Partnership for the remainder of the container's useful life with
               a purchase  option at the end of the lease term.  Direct  finance
               leases currently cover a minority of the Partnership's equipment.
               For a more detailed discussion of the leases for the Registrant's
               equipment,   see  "Leasing   Policy"   under   "Business  of  the
               Partnership" in the Registrant's Prospectus as supplemented.  The
               Registrant also sells containers in the course of its business as
               opportunities arise, at the end of the container's useful life or
               if market and economic  considerations indicate that a sale would
               be   beneficial.   See  Item  7  herein  and   "Business  of  the
               Partnership" in Registrant's Prospectus, as supplemented.

(c)(1)(ii)     Inapplicable.

(c)(1)(iii)    Inapplicable.

(c)(1)(iv)     Inapplicable.

(c)(1)(v)      Inapplicable.

(c)(1)(vi)     Inapplicable.

(c)(1)(vii)    No   single   lessee  had  generated   lease   revenue  for   the
               years ended  December  31,  2001,  2000 and 1999 which was 10% or
               more of the total revenue of the Registrant.

(c)(1)(viii)   Inapplicable.

(c)(1)(ix)     Inapplicable.

(c)(1)(x)      There   are   approximately    80   container  leasing  companies
               of  which  the top ten  control  approximately  88% of the  total
               equipment held by all container  leasing  companies.  The top two
               container leasing companies combined control approximately 31% of
               the total  equipment  held by all  container  leasing  companies.
               Textainer  Equipment  Management  Limited,  an Associate  General
               Partner of the Registrant and the manager of its marine container
               equipment,  is the third largest  container  leasing  company and
               manages  approximately 13% of the equipment held by all container
               leasing  companies.  The  customers  for  leased  containers  are
               primarily  international  shipping lines. The Registrant alone is
               not a material  participant  in the worldwide  container  leasing
               market.   The  principal   methods  of  competition   are  price,
               availability  and  the  provision  of  worldwide  service  to the
               international  shipping  community.  Competition in the container
               leasing market has increased over the past few years. Since 1996,
               shipping  alliances and other  operational  consolidations  among
               shipping  lines have allowed  shipping  lines to begin  operating
               with fewer containers,  thereby  decreasing the demand for leased
               containers and allowing  lessees to gain concessions from lessors
               about price,  special charges or credits and, in certain markets,
               the  age   specification  of  containers   rented.   Furthermore,
               primarily  as a result  of lower  new  container  prices  and low
               interest  rates,  shipping  lines now own,  rather than lease,  a
               higher  percentage  of  containers.  The  decrease in demand from
               shipping  lines,  along  with the  entry of new  leasing  company
               competitors  offering low container  rental rates,  has increased
               competition among container lessors such as the Registrant.

(c)(1)(xi)     Inapplicable.

(c)(1)(xii)    Inapplicable.

(c)(1)(xiii)   The   Registrant   has   no     employees.  Textainer   Financial
               Services   Corporation   (TFS),  a  wholly  owned  subsidiary  of
               Textainer Capital Corporation (TCC), the Managing General Partner
               of the Registrant,  is responsible for the overall  management of
               the  business of the  Registrant  and at December  31, 2001 had 4
               employees.  Textainer  Equipment  Management  Limited  (TEM),  an
               Associate  General Partner,  is responsible for the management of
               the leasing operations of the Registrant and at December 31, 2001
               had a total of 157 employees.

(d)            Financial  Information  about Foreign and Domestic Operations and
               Export Sales.

               The Registrant is involved in the leasing of shipping  containers
               to  international  shipping  companies for use in world trade and
               approximately 13%, 15% and 15% of the Registrant's rental revenue
               during  the  years  ended  December  31,  2001,  2000  and  1999,
               respectively,  was derived from operations  sourced or terminated
               domestically.  These percentages do not reflect the proportion of
               the Partnership's income from operations  generated  domestically
               or in domestic waterways.  Substantially all of the Partnership's
               income from operations is derived from assets employed in foreign
               operations. See "Business of the Partnership" in the Registrant's
               Prospectus, as supplemented, and for a discussion of the risks of
               leasing  containers  for use in world trade see "Risk Factors and
               Forward-Looking Statements" in Item 7 herein.

ITEM 2.      PROPERTIES

As of December 31, 2001, the Registrant owned the following types and quantities
of equipment:

         20-foot standard dry freight containers                           7,419
         40-foot standard dry freight containers                           9,765
         40-foot high cube dry freight containers                          7,377
                                                                         -------
                                                                          24,561
                                                                         =======

During  December 2001,  approximately  58% of these  containers were on lease to
international shipping companies, and the balance were being stored primarily at
a large  number of storage  depots  located  worldwide.  The  Partnership  sells
containers  when (i) a  container  reaches the end of its useful life or (ii) an
analysis  indicates  that  the  sale  is  warranted  based  on  existing  market
conditions and the  container's  age,  location and  condition.  At December 31,
2001,  approximately  11% of the  Partnership's  off-lease  equipment  had  been
identified  as being for sale.  The  Partnership  expects more  containers to be
identified for sale as the Partnership begins its liquidation phase.

For  information  about  the  Registrant's   property,   see  "Business  of  the
Partnership" and "Risk Factors" in the Registrant's Prospectus, as supplemented.
See also Item 7, "Results of Operations"  regarding  current and possible future
write-downs of some of the Registrant's property.

ITEM 3.      LEGAL PROCEEDINGS

The Registrant is not subject to any legal proceedings.

ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

Inapplicable.

                                     PART II

ITEM 5.      MARKET FOR THE  REGISTRANT'S COMMON  EQUITY AND RELATED STOCKHOLDER
             MATTERS

ITEM 201:

(a)      Market Information.

(a)(1)(i)           The Registrant's limited partnership  Units are not publicly
                    traded  and    there  is   no  established   trading  market
                    for such Units. The Registrant has a program whereby limited
                    partners may redeem Units for a specified  redemption price.
                    The program  operates only when the Managing General Partner
                    determines,  among other matters,  that payment for redeemed
                    units  will not  impair the  capital  or  operations  of the
                    Registrant.

(a)(1)(ii)          Inapplicable.

(a)(1)(iii)         Inapplicable.

(a)(1)(iv)          Inapplicable.

(a)(1)(v)           Inapplicable.

(a)(2)              Inapplicable.

(b)      Holders.

(b)(1)              As of  January  1, 2002, there were 7,577  holders of record
                    of limited partnership interests in the Registrant.

(b)(2)              Inapplicable.

(c)      Dividends.

                    Inapplicable.

At December 31, 2001, the Registrant was paying  distributions  at an annualized
rate equal to 5% of a Unit's  initial cost, or $1.00 per Unit.  For  information
about the amount of distributions paid during the five most recent fiscal years,
see Item 6 "Selected  Financial  Data".  Distributions  are made  monthly by the
Registrant to its limited partners.

ITEM 701:           Inapplicable.


<TABLE>
<CAPTION>


ITEM 6.      SELECTED FINANCIAL DATA

                                                           (Amounts in thousands except for per unit amounts)

                                                                         Years Ended December 31,
                                               ---------------------------------------------------------------------
                                                      2001          2000          1999           1998           1997
                                                      ----          ----          ----           ----           ----
<S>                                                    <C>           <C>           <C>            <C>            <C>
Rental income.............................        $ 11,858      $ 15,135      $ 15,224       $ 18,904       $ 19,361

(Loss) income from operations.............        $ (1,433)     $  2,466      $   (179)      $  3,769       $  5,096

Net (loss) earnings.......................        $ (1,340)     $  2,710      $    (21)      $  3,886       $  5,173

Net (loss) earnings per unit of
  limited partner interest................        $  (0.23)     $   0.43      $  (0.02)      $   0.61       $   0.82

Distributions per unit of
  limited partner interest................        $   1.23      $   1.40      $   1.61       $   1.77       $   1.85

Distributions per unit of limited
   partner interest representing
   a return of capital....................        $   1.23      $   0.97      $   1.61       $   1.16       $   1.03

Total assets..............................        $ 49,045      $ 59,080      $ 64,803       $ 74,579       $ 82,248
</TABLE>
<PAGE>

  ITEM 7.    MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
             RESULTS OF OPERATIONS

           (Amounts in thousands except for unit and per unit amounts)

The Financial Statements contain information which will assist in evaluating the
financial  condition of the  Partnership  for the years ended December 31, 2001,
2000 and 1999.  Please refer to the  Financial  Statements  and Notes thereto in
connection with the following discussion.

Textainer  Financial Services  Corporation (TFS) is the Managing General Partner
of the  Partnership  and  is a  wholly-owned  subsidiary  of  Textainer  Capital
Corporation (TCC).  Textainer  Equipment  Management Limited (TEM) and Textainer
Limited (TL) are  Associate  General  Partners of the  Partnership.  The General
Partners manage and control the affairs of the Partnership.

Liquidity and Capital Resources

From  January  16,  1991  until May 4, 1992,  the  Partnership  offered  limited
partnership  interests  to the  public.  The  Partnership  received  its minimum
subscription  amount  of  $1,000  on  February  11,  1991 and on May 4, 1992 the
Partnership's offering of limited partnership interest was closed at $125,000.

In April 2002, the Partnership will enter its liquidation  phase, which may last
from two to six or more years  depending on whether the  containers are sold (i)
in one or more large  transactions or (ii)  gradually,  either as they reach the
end of their useful marine lives or when an analysis  indicates  that their sale
is  warranted  based on existing  market  conditions  and the  container's  age,
location and condition.  The Partnership anticipates that all excess cash, after
redemptions and working capital reserves, will be distributed to the general and
limited partners on a monthly basis.  These  distributions  will consist of cash
from operations and/or cash from sales proceeds.

As the Partnership's container fleet decreases, cash from operations is expected
to decrease,  while cash from sales  proceeds is expected to fluctuate  based on
the number of containers sold and the actual sales price per container received.
Consequently,  the  Partnership  anticipates  that a large portion of all future
distributions will be a return of capital.

The final  termination and winding up of the Partnership,  as well as payment of
liquidating and/or final distributions, will occur at the end of the liquidation
phase when all or substantially  all of the  Partnership's  containers have been
sold and the Partnership begins its dissolution.

The Partnership invests working capital,  cash flow from operations prior to its
distribution  to the partners and proceeds  from  container  sales that have not
been used to purchase  containers  in  short-term,  liquid  investments.  Rental
income is the  Partnership's  principal source of liquidity and provides a major
source of funds for distributions.  Rental income has been adversely affected by
current market conditions for leased containers, and these market conditions may
continue or worsen.  Market  conditions  are discussed more fully in "Results of
Operations." The  Partnership's  cash is affected by cash provided by or used in
operating, investing and financing activities. These activities are discussed in
detail below.

Limited partners are currently receiving monthly  distributions in an annualized
amount equal to 5% of their original investment.  During the year ended December
31, 2001,  the  Partnership  declared  cash  distributions  to limited  partners
pertaining to the period from December 2000 through November 2001, in the amount
of $7,522. On a cash basis,  $6,618 of these distributions was from current year
operating activities and the remainder was from cash provided by previous years'
operations  that had not been  distributed  or used to  purchase  containers  or
redeem units. On a financial  statement basis, all of these distributions were a
return of capital.

From time to time,  the  Partnership  redeems units from limited  partners for a
specified  redemption  value,  which  is  set  by  formula.  Up  to  2%  of  the
Partnership's outstanding units may be redeemed each year, although the 2% limit
may be exceeded at the Managing General  Partner's  discretion.  All redemptions
are subject to the Managing  General  Partner's  good faith  determination  that
payment for the redeemed units will not (i) cause the Partnership to be taxed as
a  corporation,  (ii) impair the capital or  operations of the  Partnership,  or
(iii) impair the ability of the Partnership to pay  distributions  in accordance
with its  distribution  policy.  During the year ended  December 31,  2001,  the
Partnership  redeemed  26,537  units  for a total  dollar  amount  of $198.  The
Partnership used cash flow from operations to pay for the redeemed units.

At December 31, 2001, the Partnership had no commitments to purchase containers.

Net cash provided by operating  activities for the years ended December 31, 2001
and 2000, was $6,895 and $9,953, respectively. The decrease of $3,058 or 31% was
primarily  attributable  to the  decrease in net (loss)  earnings,  adjusted for
non-cash  transactions  and  the  fluctuations  in  gross  accounts  receivable,
partially  offset  by  fluctuations  in due from  affiliates,  net.  Net  (loss)
earnings,  adjusted for non-cash  transactions,  decreased  primarily due to the
decline  in  rental  income,  which  is  discussed  more  fully in  "Results  of
Operations".  The decrease in gross accounts  receivable of $818 during the year
ended December 31, 2001 was primarily due to the decrease in rental income.  The
decrease in gross accounts  receivable of $1,257 during the comparable period in
2000 was  primarily  due to the  decrease  in the average  collection  period of
accounts receivable. The fluctuations in due from affiliates, net, resulted from
timing  differences in the payment of expenses,  fees and  distributions and the
remittance of net rental revenues and sales proceeds, as well as fluctuations in
these amounts.

For the year ended December 31, 2001, net cash provided by investing  activities
(the purchase and sale of  containers)  was $1,310  compared to net cash used in
investing  activities  of $1,594  for the  comparable  period in 2000.  Net cash
provided by investing activities increased by $2,904 due to the decrease in cash
used for container  purchases  offset by the decrease in proceeds from container
sales.  Cash  used for  container  purchases  decreased  due to the  Partnership
purchasing  fewer  containers  at a lower  average  cost  during  the year ended
December 31, 2001 than in the same period in 2000.  This  decrease was partially
offset by the timing  differences in the accrual and payment of these purchases.
The  Partnership  sold more containers in low demand  locations  during the year
ended  December 31, 2001 than in the same period in 2000,  but a decrease in the
average sales price and timing  differences  in the accrual and receipt of these
sales proceeds  resulted in the decrease in total proceeds from container  sales
between the periods.  The sales prices  received on container sales continued to
decrease as a result of current market conditions, which have adversely affected
the value of used  containers.  Until market  conditions  improve in certain low
demand  locations,  the  Partnership  plans  to  continue  selling  some  of its
containers that are off-lease in these locations as well as other  containers as
the Partnership  begins its liquidation  phase as discussed above. The number of
containers  sold,  both in low demand  locations and  elsewhere,  as well as the
average  sales price,  will affect how much the  Partnership  will pay in future
distributions.

Results of Operations

The  Partnership's  income from operations,  which consists  primarily of rental
income  less  costs  and  expenses  (including  container  depreciation,  direct
container  expenses,   management  fees,  and  reimbursement  of  administrative
expenses)  was directly  related to the size of the  container  fleet during the
years ended  December 31, 2001,  2000 and 1999, as well as certain other factors
as discussed below. The following is a summary of the container fleet (in units)
available for lease during those periods:

                                                    2001        2000        1999
                                                    ----        ----        ----

     Beginning container fleet...............     27,152      27,225      29,237
     Ending container fleet..................     24,561      27,152      27,225
     Average container fleet.................     25,857      27,189      28,231


The average  container  fleet  decreased 5% and 4% from the years ended December
31, 2000 to 2001 and from December 31, 1999 to 2000, respectively, primarily due
to sales of containers. Although sales proceeds were used to purchase additional
containers,  fewer  containers  were  bought than sold as used  container  sales
prices were lower than new container prices. The Partnership's primary source of
funds for container  purchases was sales proceeds.  The Partnership expects that
the size of its container fleet will further  decline as the Partnership  begins
its  liquidation  phase in April  2002.  As the  Partnership's  container  fleet
decreases, rental income is expected to decrease as well.

Rental income and direct container expenses are also affected by the utilization
of the container  fleet,  which was 64%, 78% and 72% on average during the years
ended December 31, 2001, 2000 and 1999,  respectively.  The remaining  container
fleet is off-lease  and is being  stored  primarily at a large number of storage
depots. At December 31, 2001, the Partnership's  off-lease containers (in units)
were located in the following locations:

      America                                   2,552
      Europe                                    1,284
      Asia                                      6,123
                                                -----
      Total off-lease containers                9,959
                                                =====

At December 31, 2001 approximately 11% of the Partnership's off-lease containers
had been specifically identified as for sale.

In addition to  utilization,  rental  income is affected by daily rental  rates,
which declined slightly between the periods, as discussed below.

The  following is a comparative  analysis of the results of  operations  for the
years ended December 31, 2001, 2000 and 1999.

The Partnership's (loss) income from operations for the years ended December 31,
2001 and 2000 was ($1,433) and $2,466, respectively, on rental income of $11,858
and $15,135, respectively. The decrease in rental income of $3,277, or 22%, from
the year  ended  December  31,  2000 to the year  ended  December  31,  2001 was
attributable to the decrease in container rental income, partially offset by the
increase in other rental income, which is discussed below. Income from container
rentals,  the  major  component  of total  revenue,  decreased  $3,284,  or 24%,
primarily due to the decreases in average  on-hire  utilization of 18%,  average
fleet  size of 5% and  average  rental  rates of 5%  between  the  periods.  The
majority of the  Partnership's  rental income was generated  from the leasing of
the Partnership's containers under master operating leases.

The Partnership's income (loss) from operations for the years ended December 31,
2000 and 1999 was $2,466 and ($179),  respectively,  on rental income of $15,135
and $15,224, respectively. The decrease in rental income of $89, or 1%, from the
year  ended  December  31,  1999  to  the  year  ended  December  31,  2000  was
attributable  to a decrease  in other  rental  income,  offset by an increase in
income from container rentals. Income from container rentals, increased $258, or
2%,  primarily due to the increase in average on-hire  utilization of 8%, offset
by the decreases in the average  container  fleet of 4% and average rental rates
of 4%.

In the fourth  quarter of 2000,  utilization  began to decline and  continued to
decline  during 2001 and into the  beginning  of 2002.  This  decline was due to
lower overall demand by shipping lines for leased containers, which is primarily
a result of the  worldwide  economic  slowdown.  Two other factors are currently
reducing  the demand for leased  containers.  Shipping  lines have added  larger
vessels to their fleets, which combined with lower cargo volume growth, has made
it easier for them to use otherwise  empty vessel space to reposition  their own
containers back to high demand locations.  Additionally,  in anticipation of the
delivery of these new, larger  vessels,  many shipping lines placed large orders
for new  containers in 2000 and 2001,  thus  temporarily  reducing their need to
lease containers.  These orders for additional  containers are part of a general
increase in vessel  capacity for the  shipping  lines.  This  increase in vessel
capacity  amounted to 12% in 2001. An additional  increase in vessel capacity of
approximately 12% is expected in 2002,  because the shipping lines placed orders
for  additional  ships before  recognizing  the slowdown in world trade.  To the
extent that this increased vessel capacity remains underutilized, shipping lines
may seek to cut costs in order to sustain  profits or reduce  losses,  which may
put further downward pressure on demand for containers.

As a result of the lower  demand,  the trade  imbalance  between  Asia and North
America and Asia and Europe has eased slightly.  Combined with the excess vessel
capacity,  these  factors  have made it easier,  although not  necessarily  less
expensive,  to reposition  containers.  During the year ended December 31, 2001,
the  Partnership  was  able to  reposition  newer  containers  from  low  demand
locations in North America and Europe to historically higher demand locations in
Asia. As a consequence,  the build-up of containers in North America and Europe,
which persisted over the past several years, has eased slightly.  For the number
of off-lease  containers  located in the lower  demand  locations of America and
Europe, see chart above.

Nevertheless,  the Partnership  continues to sell (rather than  reposition) some
containers  located in low demand locations.  The decision to sell containers is
based on the current  expectation  that the  economic  benefit of selling  these
containers is greater than the estimated  economic  benefit of continuing to own
these  containers.  The  majority of the  containers  sold during the year ended
December 31, 2001 and 2000 were older containers.  The expected economic benefit
of continuing to own these containers was significantly  less than that of newer
containers.  This was due to their shorter  remaining  marine life,  the cost to
reposition them and the shipping lines'  preference for leasing newer containers
when they have a choice.

Once the decision had been made to sell containers,  the Partnership  wrote down
the value of these  specifically  identified  containers to their estimated fair
value,  which was  based on  recent  sales  prices  less  cost of sales.  Due to
unanticipated  declines in  container  sales  prices,  the actual  sales  prices
received  on  some  containers  were  lower  than  the  estimates  used  for the
write-down,  resulting in the Partnership incurring losses upon the sale of some
of these containers.  Until market conditions improve, the Partnership may incur
further  write-downs  and/or losses on the sale of such  containers.  Should the
decline in economic  value of continuing to own such  containers  turn out to be
permanent,  the Partnership may be required to increase its depreciation rate or
write-down the value of some or all of its container rental equipment.

Despite  the  decline in demand for leased  containers  discussed  above and the
decline in new container  purchase prices,  rental rates were comparable  during
these periods. Until such time as the worldwide economies improve,  particularly
those of the United States and Europe,  and cargo volumes  increase to the point
where this year's 12% increase in worldwide  vessel capacity is absorbed,  there
may be no significant improvements in utilization or rental rates.

The  General  Partners  do not  foresee  material  changes  in  existing  market
conditions for the near term. Should there be a worldwide recession,  demand for
leased  containers  could decline further and result in a decline in lease rates
and  further  declines in  utilization  and  container  sale  prices,  adversely
affecting the Partnership's operating results.

Other rental income consists of other lease-related items, primarily income from
charges to lessees for dropping off containers in surplus locations less credits
granted to lessees for  leasing  containers  from  surplus  locations  (location
income),  income  from  charges to lessees for  handling  related to leasing and
returning  containers (handling income) and income from charges to lessees for a
Damage Protection Plan (DPP). For the year ended December 31, 2001, other rental
income was $1,467,  an increase of $7 from the  equivalent  period in 2000.  The
increase was primarily due to an increase in location income of $169,  offset by
decreases  in handling  and DPP income of $121 and $43,  respectively.  Location
income increased  primarily due to the decline in credits granted to lessees for
picking up  containers  from  surplus  locations  as there were fewer  lease-out
opportunities  for which credits  could be offered.  Handling  income  decreased
despite the increase in the average  handling  charge per container,  due to the
decrease in  container  movement  from the year ended  December  31, 2000 to the
equivalent  period in 2001. DPP income  declined due to a decrease in the number
of containers  covered under DPP, offset by an increase in the average DPP price
charged per container.

For the year ended December 31, 2000, other rental income was $1,460, a decrease
of $347 from the  equivalent  period in 1999.  The decrease was primarily due to
decreases  in  location,  DPP and  handling  income  of  $147,  $138,  and  $61,
respectively. The decline in location income was due to a decrease in charges to
lessees for dropping off containers in certain  locations,  offset by a decrease
in credits granted to lessees for picking up containers from surplus  locations.
DPP income  declined  due to a decrease  in the  average  DPP price  charged per
container and a decrease in the number of containers covered under DPP. Handling
income declined primarily due to the decline in container movement.

Direct container expenses increased $339, or 9% from the year ended December 31,
2000 to the same period in 2001, primarily due to an increase in storage expense
of $885,  offset  by  decreases  in  repositioning,  maintenance,  and  handling
expenses of $233, $155, and $89, respectively.  Storage expense increased due to
the decrease in average  utilization  noted above and a higher  average  storage
cost per  container.  Repositioning  expense  decreased due to a decrease in the
average  repositioning  cost per  container.  The  decrease  was  offset  by the
inclusion of certain credits given to lessees to reposition containers which had
previously  been  applied  against  location  income as noted above and a slight
increase in the number of containers repositioned during the year ended December
31, 2001 compared to the same period in 2000.  Maintenance expense decreased due
to the decrease in the number of containers requiring maintenance and a decrease
in the average  maintenance cost per container.  The decline in handling expense
was primarily due to a decline in container movement.

Direct  container  expenses  decreased $842, or 18% from the year ended December
31, 1999 to the same period in 2000.  The decrease was primarily due to declines
in  storage,  DPP and  handling  expenses of $585,  $361 and $116,  offset by an
increase  in  repositioning  expense.   Storage  expense  declined  due  to  the
improvement  in  utilization  noted above and a lower  average  storage cost per
container. DPP expense declined primarily due to decreases in the average repair
cost per DPP  container  and in the  number of  containers  covered  under  DPP.
Handling expense decreased due to the decrease in container movement and a lower
average handling cost per container. The increase in repositioning costs was due
to the  increase in the average cost to  reposition a container  due to the high
demand for  limited  vessel  capacity,  offset by the  decrease in the number of
containers repositioned.

Bad debt  (benefit)  expense  was  ($44),  ($23)  and $353 for the  years  ended
December 31, 2001,  2000 and 1999,  respectively.  The  fluctuations in bad debt
benefit/expense  reflect the required adjustment to the bad debt reserve and are
based  on  management's  then  current  estimates  of the  portion  of  accounts
receivable  that  may  not be  collected,  and  which  will  not be  covered  by
insurance.   These  estimates  are  based  primarily  on  management's   current
assessment of the  financial  condition of the  Partnership's  lessees and their
ability to make their required payments.  The benefits recorded during the years
ended  December 31, 2001 and 2000 reflect  lower reserve  requirements  from the
previous year and the expense  recorded  during the year ended December 31, 1999
reflects a greater reserve requirement from the previous year.

Depreciation  expense  decreased  $365,  or 6%, and $402,  or 7%, from the years
ended  December 31, 2000 to 2001 and  December  31, 1999 to 2000,  respectively,
primarily due to the declines in the average fleet size.

New  container  prices  steadily  declined  from  1995  through  1999.  Although
container  prices  increased in 2000,  these prices declined again in 2001. As a
result,  the cost of new containers  purchased in recent years is  significantly
less  than  the  average  cost of  containers  purchased  in  prior  years.  The
Partnership  evaluated the  recoverability  of the recorded  amount of container
rental  equipment  at December 31, 2001 and 2000 for  containers  to be held for
continued  use and  determined  that a reduction to the carrying  value of these
containers was not required.  The Partnership also evaluated the  recoverability
of the recorded amount of containers  identified for sale in the ordinary course
of business  and  determined  that a reduction  to the  carrying  value of these
containers  was  required.  The  Partnership  wrote  down  the  value  of  these
containers to their estimated fair value, which was based on recent sales prices
less cost to sell.  During the years ended December 31, 2001,  2000 and 1999 the
Partnership recorded write-down expenses of $1,110, $595 and $733, respectively,
on 1,841,  890 and  1,398  containers  identified  as for sale and  requiring  a
reserve.  At December 31, 2001 and 2000, the net book value of the 1,054 and 283
containers identified as for sale was $1,667 and $493, respectively.

The  Partnership  sold 1,091 of these  previously  written down containers for a
loss of $119 during the year ended  December  31,  2001 and sold 984  previously
written down containers for a loss of $57 during the same period in 2000. During
the year ended December 31, 1999, the Partnership sold 1,998 previously  written
down containers for a loss of $290. The Partnership  incurred losses on the sale
of some containers  previously  written down as the actual sales prices received
on these  containers  were lower than the  estimates  used for the  write-downs,
primarily due to unexpected declines in container sale prices.

The Partnership also sold containers that had not been written down and recorded
losses of $576, $84 and $691 during the years ended December 31, 2001,  2000 and
1999, respectively.

As more  containers are  subsequently  identified for sale or if container sales
prices decline,  the Partnership may incur additional  write-downs on containers
and/or may incur losses on the sale of containers. The Partnership will continue
to evaluate  the  recoverability  of the  recorded  amount of  container  rental
equipment and cautions that a write-down of container rental equipment and/or an
increase in its depreciation  rate may be required in future periods for some or
all of its container rental equipment.

Management  fees to  affiliates  decreased  $278 or 20% and $70 or 5%,  from the
years  ended  December  31,  2000  to  2001  and  December  31,  1999  to  2000,
respectively.  The  decreases  were  due to  decreases  in  both  equipment  and
incentive  management  fees.  Equipment  management  fees  decreased  due to the
decrease in rental income,  upon which  equipment  management fees are primarily
based.  These fees were  approximately  7% of rental  income for these  periods.
Incentive  management  fees,  which are based on the  Partnership's  limited and
general  partner  distributions  made from cash from  operations  and  partners'
capital decreased $53 due to (i) decreases in the limited partner  distributions
percentages  from 7% to 5% of  initial  partners'  capital in July 2001 and from
8.25% to 7% in October  1999 and (ii)  decreases  in  partners'  capital  due to
redemptions of limited  partners units during the years ended December 31, 2001,
2000 and 1999.

General and administrative  costs to affiliates decreased $131 or 18% and $49 or
6%, from the years ended  December  31,  2000 to 2001 and  December  31, 1999 to
2000,  respectively.  These  decreases  were  primarily due to a decrease in the
allocation of overhead costs from TEM, as the Partnership  represented a smaller
portion of the total fleet managed by TEM.

The  Partnership  Agreement  provides  for the  ongoing  payment to the  General
Partners of the management fees and the reimbursement of the expenses  discussed
above.  Since these fees and expenses are  established  by the  Agreement,  they
cannot be considered the result of arms' length negotiations with third parties.
The Partnership Agreement was formulated at the Partnership's  inception and was
part of the terms  upon which the  Partnership  solicited  investments  from its
limited partners. The business purpose of paying the General Partners these fees
is to  compensate  the  General  Partners  for the  services  they render to the
Partnership.  Reimbursement  for  expenses  is made to offset  some of the costs
incurred by the General  Partners in managing the  Partnership and its container
fleet.  More details about these fees and expenses are included in footnote 2 to
the Financial Statements.

Loss on sale of containers  increased $554 from the year ended December 31, 2000
to the  comparable  period  in  2001.  The  increase  was  primarily  due to the
Partnership  selling more  containers  at a lower average sales price during the
year ended December 31, 2001, compared to the same period in 2000.

Loss on sale of containers was $141 and $981 during the years ended December 31,
2000 and 1999,  respectively.  The  decrease in loss on sale of  containers  was
primarily due to the Partnership  selling fewer containers during the year ended
December 31, 2000 than in the same period in 1999.  The decline in the number of
container sold was primarily due to there being fewer lower demand locations and
fewer  containers  in these  locations,  the  latter  resulting  primarily  from
previous sales efforts.

Net earnings per limited partnership unit fluctuated from earnings of $0.43 to a
loss of $0.23 from the year ended December 31, 2000 to the equivalent  period in
2001, reflecting the decrease in net earnings allocated to limited partners from
earnings of $2,620 to a loss of $1,419,  respectively.  Net earnings per limited
partnership  unit  increased  from a loss of $0.02 to earnings of $0.43 from the
year ended  December 31, 1999 to the comparable  period in 2000,  reflecting the
increase in net earnings  allocated to limited  partners  from a loss of $125 to
earnings of $2,620, respectively.  The allocation of net earnings (loss) for the
years ended  December 31, 2001,  2000 and 1999 included a special  allocation of
gross income to the General  Partners of $92,  $63, and $104,  respectively,  in
accordance with the Partnership Agreement.

Critical Accounting Policies and Estimates

The Partnership's discussion and analysis of its financial condition and results
of operations are based upon the Partnership's financial statements,  which have
been prepared in accordance with accounting principles generally accepted in the
United States of America.  Certain  estimates and  assumptions  were made by the
Partnership's  management  that  affect  the  reported  amounts  of  assets  and
liabilities and disclosures of contingent  assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. The Partnership's management evaluates its estimates on an
on-going  basis,  including  those  related to the container  rental  equipment,
accounts receivable and accruals.

These  estimates  are  based  on  historical  experience  and on  various  other
assumptions  that are believed to be  reasonable  under the  circumstances,  the
results of which  form the basis for making  judgments  regarding  the  carrying
values of assets  and  liabilities.  Actual  results  could  differ  from  those
estimates under different assumptions or conditions.

The Partnership's management believes the following critical accounting policies
affect its more  significant  judgments and estimates used in the preparation of
its financial statements.

The Partnership  maintains allowances for doubtful accounts for estimated losses
resulting  from the  inability of its lessees to make required  payments.  These
allowances  are  based  on  management's  current  assessment  of the  financial
condition of the Partnership's  lessees and their ability to make their required
payments.  If the  financial  condition  of the  Partnership's  lessees  were to
deteriorate,  resulting  in an  impairment  of their  ability to make  payments,
additional  allowances  may  be  required,  which  would  adversely  affect  the
Partnership's operating results.

The  Partnership  depreciates  its container  rental  equipment based on certain
estimates  related to the  container's  useful  life and  salvage  value.  These
estimates are based upon assumptions  about future demand for leased  containers
and the  estimated  sales price at the end of the  container's  useful life.  If
these  estimates  were  subsequently  revised based on permanent  changes in the
container leasing market, the Partnership would revise its depreciation  policy,
which could adversely affect the Partnership's operating results.

Additionally,  the  recoverability  of the  recorded  amounts of  containers  is
evaluated to ensure that the recorded  amount does not exceed the estimated fair
value of the  containers.  If it is determined  that the recorded amount exceeds
the  estimated  fair  value,  the  Partnership  writes  down the  value of those
containers.  In  determining  the  estimated  fair value,  assumptions  are made
regarding future demand and market  conditions for leased  containers as well as
for used containers and the sales prices for used  containers.  If actual market
conditions are less favorable than those projected or if actual sales prices are
lower than those  estimated by the  Partnership,  additional  write-downs may be
required.  Any additional  write-downs  would adversely affect the Partnership's
operating results.

Accounting Pronouncement

In August 2001, the Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards ("SFAS") No. 144, "Accounting for Impairment or
Disposal  of  Long-Lived  Assets".   SFAS  No.  144  supercedes  SFAS  No.  121,
"Accounting  for the  Impairment  of  Long-Lived  Assets to be Disposed of", and
elements of Accounting  Principles  Board Opinion 30,  "Reporting the Results of
Operations  - Reporting  the Effects on Disposal of a Segment of a Business  and
Extraordinary, Unusual or Infrequently Occurring Events and Transactions."

SFAS No. 144 establishes a  single-accounting  model for long-lived assets to be
disposed of while  maintaining  many of the  provisions  relating to  impairment
testing and  valuation.  The Statement  will be effective on January 1, 2002 and
the  Partnership  is currently  assessing  the impact  adoption will have on the
financial condition and operating results of the Partnership.

Risk Factors and Forward Looking Statements

Although  substantially  all of the  Partnership's  income  from  operations  is
derived from assets employed in foreign operations, virtually all of this income
is  denominated  in United  States  dollars.  The  Partnership's  customers  are
international  shipping  lines,  which transport  goods on  international  trade
routes.  The  domicile  of the lessee is not  indicative  of where the lessee is
transporting  the  containers.  The  Partnership's  business risk in its foreign
operations lies with the  creditworthiness of the lessees, and the Partnership's
ability to keep its containers under lease,  rather than the geographic location
of the  containers or the domicile of the lessees.  The containers are generally
operated on the international high seas rather than on domestic  waterways.  The
containers are subject to the risk of war or other political, economic or social
occurrence  where  the  containers  are used,  which  may  result in the loss of
containers,  which,  in turn,  may have a material  impact on the  Partnership's
results of operations and financial condition.

Other risks of the Partnership's  leasing  operations include  competition,  the
cost of  repositioning  containers  after  they come  off-lease,  the risk of an
uninsured loss, including bad debts,  increases in maintenance expenses or other
costs of  operating  the  containers,  and the effect of world  trade,  industry
trends  and/or  general  business  and  economic  cycles  on  the  Partnership's
operations. See "Risk Factors" in the Partnership's Prospectus, as supplemented,
for additional information on risks of the Partnership's business. See "Critical
Accounting  Policies and Estimates"  above for information on the  Partnership's
critical  accounting policies and how changes in those estimates could adversely
affect the Partnership's results of operations.

The foregoing includes forward-looking statements and predictions about possible
or  future  events,  results  of  operations  and  financial  condition.   These
statements  and  predictions  may  prove  to  be  inaccurate,   because  of  the
assumptions  made by the  Partnership  or the  General  Partners  or the  actual
development  of  future  events.  No  assurance  can be given  that any of these
forward-looking statements or predictions will ultimately prove to be correct or
even substantially correct. The risks and uncertainties in these forward-looking
statements  include,  but are not  limited  to,  changes  in demand  for  leased
containers,  changes in global  business  conditions  and their  effect on world
trade,  future  modifications  in the way in  which  the  Partnership's  lessees
conduct their business or of the  profitability of their business,  increases or
decreases in new container  prices or the  availability  of financing  therefor,
alterations in the costs of maintaining and repairing used containers, increases
in competition,  changes in the Partnership's  ability to maintain insurance for
its  containers  and its  operations,  the effects of  political  conditions  on
worldwide  shipping and demand for global trade or of other general business and
economic cycles on the  Partnership,  as well as other risks detailed herein and
from time to time in the Partnership's  filings with the Securities and Exchange
Commission.  The  Partnership  does  not  undertake  any  obligation  to  update
forward-looking statements.

ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Inapplicable.

ITEM 8.      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Attached pages 15 to 28.
<PAGE>

                          Independent Auditors' Report
                          ----------------------------


The Partners
Textainer Equipment Income Fund III, L.P.:

We have audited the  accompanying  balance sheets of Textainer  Equipment Income
Fund III, L.P. (a California  limited  partnership)  as of December 31, 2001 and
2000, and the related statements of operations, partners' capital and cash flows
for each of the years in the three-year  period ended  December 31, 2001.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Textainer Equipment Income Fund
III, L.P. as of December 31, 2001 and 2000,  and the results of its  operations,
its partners' capital and its cash flows for each of the years in the three-year
period  ended  December  31,  2001  in  conformity  with  accounting  principles
generally accepted in the United States of America.



                                  /s/ KPMG LLP



San Francisco, California
February 11, 2002


<PAGE>
<TABLE>
<CAPTION>

TEXTAINER EQUIPMENT INCOME FUND III, L.P.
(a California Limited Partnership)

Balance Sheets

December 31, 2001 and 2000
(Amounts in thousands)
----------------------------------------------------------------------------------------------------------

                                                                           2001                 2000
                                                                     ----------------     ----------------
<S>                                                                        <C>                  <C>
Assets
Container rental equipment, net of accumulated
   depreciation of  $42,049 (2000:  $42,262)                         $        42,867      $        52,490
Cash                                                                           3,253                2,875
Accounts receivable, net of allowance for doubtful
   accounts of $232 (2000: $465)                                               2,455                2,993
Due from affiliates, net (note 2)                                                454                  707
Prepaid expenses                                                                  16                   15
                                                                     ----------------     ----------------

                                                                     $        49,045      $        59,080
                                                                     ================     ================
Liabilities and Partners' Capital
Liabilities:
   Accounts payable                                                  $           490      $           492
   Accrued liabilities                                                           331                  398
   Accrued recovery costs (note 1(j))                                            194                  193
   Accrued damage protection plan costs (note 1(k))                              162                  279
   Warranty claims (note 1(l))                                                    69                  109
   Deferred quarterly distributions (note 1(g))                                   54                   79
   Container purchases payable                                                     -                  646
                                                                     ----------------     ----------------

      Total liabilities                                                        1,300                2,196
                                                                     ----------------     ----------------

Partners' capital:
   General partners                                                                -                    -
   Limited partners                                                           47,745               56,884
                                                                     ----------------     ----------------

      Total partners' capital                                                 47,745               56,884
                                                                     ----------------     ----------------


                                                                     $        49,045      $        59,080
                                                                     ================     ================

See accompanying notes to financial statements
</TABLE>



<PAGE>
<TABLE>
<CAPTION>


TEXTAINER EQUIPMENT INCOME FUND III, L.P.
(a California Limited Partnership)

Statements of Operations

Years ended December 31, 2001, 2000 and 1999
(Amounts in thousands except for unit and per unit amounts)
--------------------------------------------------------------------------------------------------------------

                                                               2001               2000              1999
                                                         -----------------   ---------------   ---------------
<S>                                                                <C>               <C>             <C>
Rental income                                            $         11,858    $       15,135    $       15,224
                                                         -----------------   ---------------   ---------------

Costs and expenses:
      Direct container expenses                                     4,190             3,851             4,693
      Bad debt (benefit) expense                                      (44)              (23)              353
      Depreciation (note 1(e))                                      5,381             5,746             6,148
      Write-down of containers (note 1(e))                          1,110               595               733
      Professional fees                                                30                62                70
      Management fees to affiliates (note 2)                        1,126             1,404             1,474
      General and administrative costs
        to affiliates (note 2)                                        605               736               785
      Other general and administrative costs                          198               157               166
      Loss on sale of containers                                      695               141               981
                                                         -----------------   ---------------   ---------------

                                                                   13,291            12,669            15,403
                                                         -----------------   ---------------   ---------------

      (Loss) income from operations                                (1,433)            2,466              (179)
                                                         -----------------   ---------------   ---------------

Other  income:
      Interest income                                                  93               244               158
                                                         -----------------   ---------------   ---------------

                                                                       93               244               158
                                                         -----------------   ---------------   ---------------

      Net (loss) earnings                                $         (1,340)   $        2,710    $          (21)
                                                         =================   ===============   ===============

Allocation of net (loss) earnings (note 1(g)):
      General partners                                   $             79    $           90    $          104
      Limited partners                                             (1,419)            2,620              (125)
                                                         -----------------   ---------------   ---------------

                                                         $         (1,340)   $        2,710    $          (21)
                                                         =================   ===============   ===============
Limited partners' per unit share
      of net (loss) earnings                             $          (0.23)   $         0.43    $        (0.02)
                                                         =================   ===============   ===============
Limited partners' per unit share
      of distributions                                   $           1.23    $         1.40    $         1.61
                                                         =================   ===============   ===============
Weighted average number of limited
      partnership units outstanding (note 1(m))                 6,095,766         6,127,711         6,136,934
                                                         =================   ===============   ===============


See accompanying notes to financial statements
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

TEXTAINER EQUIPMENT INCOME FUND III, L.P.
(a California Limited Partnership)

Statements of Partners' Capital

Years ended December 31, 2001, 2000 and 1999
(Amounts in thousands)
-----------------------------------------------------------------------------------------------------

                                                              Partners' Capital
                                           ----------------------------------------------------------
                                              General                Limited               Total
                                           --------------         -------------        --------------
<S>                                           <C>                     <C>                  <C>

Balances at December 31, 1998              $           -          $     73,166         $      73,166

Distributions                                       (104)               (9,873)               (9,977)

Redemptions (note 1(n))                                -                  (157)                 (157)

Net loss                                             104                  (125)                  (21)
                                           --------------         -------------        --------------

Balances at December 31, 1999                          -                63,011                63,011
                                           --------------         -------------        --------------


Distributions                                        (90)               (8,581)               (8,671)

Redemptions (note 1(n))                                -                  (166)                 (166)

Net earnings                                          90                 2,620                 2,710
                                           --------------         -------------        --------------

Balances at December 31, 2000                          -                56,884                56,884
                                           --------------         -------------        --------------


Distributions                                        (79)               (7,522)               (7,601)

Redemptions (note 1(n))                                -                  (198)                 (198)

Net loss                                              79                (1,419)               (1,340)
                                           --------------         -------------        --------------

Balances at December 31, 2001              $           -          $     47,745         $      47,745
                                           ==============         =============        ==============


See accompanying notes to financial statements


</TABLE>

<PAGE>
<TABLE>
<CAPTION>

TEXTAINER EQUIPMENT INCOME FUND III, L.P.
(a California Limited Partnership)

Statements of Cash Flows
Years ended December 31, 2001, 2000 and 1999
(Amounts in thousands)
------------------------------------------------------------------------------------------------------------------------------

                                                                                2001               2000               1999
                                                                          ---------------    ---------------    --------------
<S>                                                                             <C>                <C>                 <C>
Cash flows from operating activities:
   Net (loss) earnings                                                    $       (1,340)    $        2,710     $         (21)
   Adjustments to reconcile net (loss) earnings to net cash provided
      by operating activities:
         Depreciation and container write-downs                                    6,491              6,341             6,881
         (Decrease) increase in allowance for doubtful accounts                     (233)              (291)              317
         Loss on sale of containers                                                  695                141               981
         Decrease (increase)  in assets:
            Accounts receivable                                                      818              1,257               145
            Due from affiliates, net                                                 690               (211)               31
            Prepaid expenses                                                          (1)                 3                 8
         (Decrease) increase in liabilities:
            Accounts payable and accrued liabilities                                 (69)               172                53
            Accrued recovery costs                                                     1                 28                49
            Accrued damage protection plan costs                                    (117)              (157)              145
            Warranty claims                                                          (40)               (40)              (39)
                                                                          ---------------    ---------------    --------------

            Net cash provided by operating activities                              6,895              9,953             8,550
                                                                          ---------------    ---------------    --------------

Cash flows from investing activities:
     Proceeds from sale of containers                                              2,744              3,030             4,947
     Container purchases                                                          (1,434)            (4,624)           (3,446)
                                                                          ---------------    ---------------    --------------

            Net cash provided by (used in) investing activities                    1,310             (1,594)            1,501
                                                                          ---------------    ---------------    --------------

Cash flows from financing activities:
    Redemptions of limited partnership units                                        (198)              (166)             (157)
    Distributions to partners                                                     (7,629)            (8,673)           (9,994)
                                                                          ---------------    ---------------    --------------

            Net cash used in financing activities                                 (7,827)            (8,839)          (10,151)
                                                                          ---------------    ---------------    --------------

Net increase (decrease) in cash                                                      378               (480)             (100)

Cash at beginning of period                                                        2,875              3,355             3,455
                                                                          ---------------    ---------------    --------------

Cash at end of period                                                     $        3,253     $        2,875     $       3,355
                                                                          ===============    ===============    ==============



See accompanying notes to financial statements
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

TEXTAINER EQUIPMENT INCOME FUND III, L.P.
(a California Limited Partnership)

Statements of Cash Flows - Continued

Years ended December 31, 2001, 2000 and 1999
(Amounts in thousands)
--------------------------------------------------------------------------------

Supplemental Disclosures:

Supplemental schedule of non-cash investing and financing activities:

The following table summarizes the amounts of container purchases, distributions
to partners  and  proceeds  from sale of  containers  which had not been paid or
received  by the  Partnership  as of December  31,  2001,  2000,  1999 and 1998,
resulting in  differences  in amounts  recorded and amounts of cash disbursed or
received by the  Partnership,  as shown in the  Statements of Cash Flows for the
years ended December 31, 2001, 2000 and 1999.

                                                                     2001          2000           1999           1998
                                                                     ----          ----           ----           ----
<S>                                                                   <C>           <C>            <C>            <C>
Container purchases included in:
   Due (from) to affiliates..............................            $ (7)         $  -           $  -           $ 16
   Container purchases payable...........................               -           646            243             56

Distributions to partners included in:
   Due to affiliates.....................................               5             8              8              9
   Deferred quarterly distributions......................              54            79             81             97

Proceeds from sale of containers included in:
   Due from affiliates...................................             708           281            601            812

The following table summarizes the amounts of container purchases, distributions
to partners and proceeds from sale of containers recorded by the Partnership and
the amounts  paid or received as shown in the  Statements  of Cash Flows for the
years ended December 31, 2001, 2000 and 1999.

                                                                                   2001           2000           1999
                                                                                   ----           ----           ----

Container purchases recorded.........................................            $  781         $5,027         $3,617
Container purchases paid.............................................             1,434          4,624          3,446

Distributions to partners declared...................................             7,601          8,671          9,977
Distributions to partners paid.......................................             7,629          8,673          9,994

Proceeds from sale of containers recorded............................             3,171          2,710          4,736
Proceeds from sale of containers received............................             2,744          3,030          4,947

The  Partnership  has  entered  into direct  finance  leases,  resulting  in the
transfer of containers from container rental  equipment to accounts  receivable.
The carrying  values of containers  transferred  during the years ended December
31, 2001, 2000 and 1999 were $47, $102 and $134, respectively.

See accompanying notes to financial statements
</TABLE>

<PAGE>

TEXTAINER EQUIPMENT INCOME FUND III, L.P.
(a California Limited Partnership)

Notes to Financial Statements

Years ended December 31, 2001, 2000 and 1999
(Amounts in thousands except for unit and per unit amounts)
--------------------------------------------------------------------------------

Note 1.  Summary of Significant Accounting Policies

     (a)  Nature of Operations

     Textainer Equipment Income Fund III, L.P. (TEIF III or the Partnership),  a
     California limited partnership, with a maximum life of 20 years, was formed
     on July 26, 1990. The  Partnership  was formed to engage in the business of
     owning,  leasing and  selling  both new and used  equipment  related to the
     international  containerized  cargo shipping industry,  including,  but not
     limited to, containers,  trailers and other container-related equipment. On
     January  16,  1991  TEIF III  began  offering  units  representing  limited
     partnership   interests  (Units)  to  the  public.  On  May  4,  1992,  the
     Partnership had sold the maximum number of units offered. On that date, the
     Partnership had issued 6,250,000 units, for a total of $125,000.

     In April 2002, the Partnership will begin its liquidation phase. This phase
     may last from two to six or more years  depending on whether the containers
     are sold (i) in one or more large transactions or (ii) gradually, either as
     they  reach  the end of  their  useful  marine  lives  or when an  analysis
     indicates that their sale is warranted based on existing market  conditions
     and  the  container's   age,   location  and  condition.   The  Partnership
     anticipates  that all excess cash,  after  redemptions  and working capital
     reserves,  will be  distributed  to the limited  and general  partners on a
     monthly basis.

     The final termination and winding up of the Partnership, as well as payment
     of  liquidating  and/or final  distributions,  will occur at the end of the
     liquidation  phase  when  all or  substantially  all  of the  Partnership's
     containers have been sold and the Partnership begins its dissolution.

     Textainer  Financial  Services  Corporation  (TFS) is the managing  general
     partner of the  Partnership  and is a wholly-owned  subsidiary of Textainer
     Capital Corporation (TCC). Textainer Equipment Management Limited (TEM) and
     Textainer  Limited (TL) are associate  general partners of the Partnership.
     The  managing  general  partner  and the  associate  general  partners  are
     collectively  referred to as the General Partners and are commonly owned by
     Textainer Group Holdings  Limited (TGH).  The General  Partners also act in
     this capacity for other limited  partnerships.  The General Partners manage
     and control the affairs of the Partnership.

     (b)  Basis of Accounting

     The  Partnership  utilizes  the accrual  method of  accounting.  Revenue is
     recorded  when  earned  according  to the  terms  of the  container  rental
     contracts.  These  contracts are  classified as operating  leases or direct
     finance leases if they so qualify under  Statement of Financial  Accounting
     Standards No. 13: "Accounting for Leases".

     (c) Critical Accounting Policies and Estimates

     Certain estimates and assumptions were made by the Partnership's management
     that affect the reported  amounts of assets and liabilities and disclosures
     of  contingent  assets  and  liabilities  at  the  date  of  the  financial
     statements  and the  reported  amounts of revenue and  expenses  during the
     reporting period. The Partnership's  management  evaluates its estimates on
     an  on-going  basis,  including  those  related  to  the  container  rental
     equipment, accounts receivable and accruals.

     These  estimates  are based on historical  experience  and on various other
     assumptions that are believed to be reasonable under the circumstances, the
     results of which form the basis for making judgments regarding the carrying
     values of assets and  liabilities.  Actual  results could differ from those
     estimates under different assumptions or conditions.

     The Partnership's  management  believes the following  critical  accounting
     policies  affect its more  significant  judgments and estimates used in the
     preparation of its financial statements.

     The Partnership  maintains  allowances for doubtful  accounts for estimated
     losses  resulting  from  the  inability  of its  lessees  to make  required
     payments.  These allowances are based on management's current assessment of
     the financial  condition of the Partnership's  lessees and their ability to
     make  their  required   payments.   If  the  financial   condition  of  the
     Partnership's  lessees were to  deteriorate,  resulting in an impairment of
     their ability to make payments, additional allowances may be required.

     The Partnership depreciates its container rental equipment based on certain
     estimates related to the container's  useful life and salvage value.  These
     estimates  are based  upon  assumptions  about  future  demand  for  leased
     containers  and the  estimated  sales  price at the end of the  container's
     useful  life.  If  these  estimates  were  subsequently  revised  based  on
     permanent  changes in the container  leasing market,  the Partnership would
     revise its depreciation policy.

     Additionally,  the  recoverability of the recorded amounts of containers is
     evaluated to ensure that the recorded  amount does not exceed the estimated
     fair value of the containers.  If it is determined that the recorded amount
     exceeds the estimated fair value, the Partnership  writes down the value of
     those containers.  In determining the estimated fair value, assumptions are
     made regarding future demand and market conditions for leased containers as
     well as for used  containers and the sales prices for used  containers.  If
     actual market  conditions  are less  favorable  than those  projected or if
     actual  sales  prices are lower than those  estimated  by the  Partnership,
     additional write-downs may be required.

     (d)  Fair Value of Financial Instruments

     In accordance  with  Statement of Financial  Accounting  Standards No. 107,
     "Disclosures  about Fair Value of Financial  Instruments,"  the Partnership
     calculates  the fair  value of  financial  instruments  and  includes  this
     additional  information in the notes to the financial  statements  when the
     fair value is different than the book value of those financial instruments.
     At  December  31,  2001  and  2000,  the fair  value  of the  Partnership's
     financial  instruments (cash,  accounts receivable and current liabilities)
     approximates the related book value of such instruments.

     (e)  Container Rental Equipment

     Container rental equipment is recorded at the cost of the assets purchased,
     which includes  acquisition  fees, less accumulated  depreciation  charged.
     Depreciation of new containers is computed using the  straight-line  method
     over an  estimated  useful  life of 12 years to a 28% salvage  value.  Used
     containers are depreciated based upon their estimated remaining useful life
     at the date of acquisition (from 2 to 11 years). When assets are retired or
     otherwise  disposed of, the cost and related  accumulated  depreciation are
     removed  from the  equipment  accounts  and any  resulting  gain or loss is
     recognized in income for the period.

     In accordance  with  Statement of Financial  Accounting  Standards No. 121,
     "Accounting for the Impairment of Long-Lived  Assets and Long-Lived  Assets
     to be Disposed Of" (SFAS 121), the  Partnership  periodically  compares the
     carrying  value of the  containers  to  expected  future cash flows for the
     purpose of assessing the  recoverability  of the recorded  amounts.  If the
     carrying value exceeds  expected future cash flows,  the assets are written
     down to  estimated  fair value.  In  addition,  containers  identified  for
     disposal  are  recorded at the lower of carrying  amount or fair value less
     cost to sell.

     New container  prices  steadily  declined from 1995 through 1999.  Although
     container prices increased in 2000, these prices declined again in 2001. As
     a  result,  the  cost  of new  containers  purchased  in  recent  years  is
     significantly  less than the average cost of containers  purchased in prior
     years. The Partnership  evaluated the recoverability of the recorded amount
     of container  rental equipment at December 31, 2001 and 2000 for containers
     to be  held  for  continued  use and  determined  that a  reduction  to the
     carrying value of these  containers was not required.  The Partnership also
     evaluated  the   recoverability   of  the  recorded  amount  of  containers
     identified for sale in the ordinary  course of business and determined that
     a reduction to the carrying  value of these  containers  was required.  The
     Partnership  wrote down the value of these  containers  to their  estimated
     fair  value,  which was based on recent  sales  prices  less cost of sales.
     During the years ended  December  31, 2001,  2000 and 1999 the  Partnership
     recorded  write-down expenses of $1,110,  $595 and $733,  respectively,  on
     1,841,  890 and 1,398  containers  identified  as for sale and  requiring a
     reserve. At December 31, 2001 and 2000, the net book value of the 1,054 and
     283 containers identified as for sale was $1,667 and $493, respectively.

     The Partnership sold 1,091 of these previously  written down containers for
     a loss of $119  during  the  year  ended  December  31,  2001  and sold 984
     previously written down containers for a loss of $57 during the same period
     in 2000.  During the year ended  December 31, 1999,  the  Partnership  sold
     1,998  previously   written  down  containers  for  a  loss  of  $290.  The
     Partnership  incurred  losses  on the  sale of some  containers  previously
     written down as the actual sales prices  received on these  containers were
     lower  than  the  estimates  used  for the  write-downs,  primarily  due to
     unexpected declines in container sale prices.

     The  Partnership  also sold  containers  that had not been written down and
     recorded  losses of $576,  $84 and $691 during the years ended December 31,
     2001, 2000 and 1999, respectively.

     As more  containers  are  subsequently  identified for sale or if container
     sales prices  continue to decline,  the  Partnership  may incur  additional
     write-downs  on  containers   and/or  may  incur  losses  on  the  sale  of
     containers. The Partnership will continue to evaluate the recoverability of
     the recorded  amounts of container  rental  equipment  and cautions  that a
     write-down  of  container  rental  equipment  and/or  an  increase  in  its
     depreciation  rate may be required in future periods for some or all of its
     container rental equipment.

     In August 2001, the Financial  Accounting  Standards Board issued Statement
     of  Financial  Accounting  Standards  ("SFAS")  No.  144,  "Accounting  for
     Impairment or Disposal of Long-Lived Assets".  SFAS No. 144 supercedes SFAS
     No. 121, "Accounting for the Impairment of Long-Lived Assets to be Disposed
     of", and elements of Accounting Principles Board Opinion 30, "Reporting the
     Results of Operations - Reporting the Effects on Disposal of a Segment of a
     Business and  Extraordinary,  Unusual or Infrequently  Occurring Events and
     Transactions."

     SFAS No. 144 establishes a single-accounting model for long-lived assets to
     be  disposed  of  while  maintaining  many of the  provisions  relating  to
     impairment  testing and  valuation.  The  Statement  will be  effective  on
     January  1, 2002 and the  Partnership  is  currently  assessing  the impact
     adoption will have on the financial  condition and operating results of the
     Partnership.

     (f)  Nature of Income from Operations

     Although  substantially all of the Partnership's  income from operations is
     derived from assets employed in foreign  operations,  virtually all of this
     income is denominated in United States dollars. The Partnership's customers
     are  international  shipping  lines that transport  goods on  international
     trade  routes.  The domicile of the lessee is not  indicative  of where the
     lessee is transporting the containers.  The Partnership's  business risk in
     its foreign operations lies with the creditworthiness of the lessees rather
     than the  geographic  location  of the  containers  or the  domicile of the
     lessees.

     No single lessee accounted for more than 10% of the Partnership's  revenues
     for the years ended December 31, 2001, 2000 and 1999.

     (g)  Allocation of Net Earnings (Loss) and Partnership Distributions

     In accordance with the Partnership  Agreement,  sections 3.08 through 3.12,
     net earnings or losses and distributions are generally  allocated 1% to the
     General  Partners and 99% to the Limited  Partners.  If the  allocation  of
     distributions  exceeds the allocation of net earnings and creates a deficit
     in  the  General  Partners'  aggregate  capital  account,  the  Partnership
     Agreement  provides for a special  allocation  of gross income equal to the
     amount of the deficit.

     Actual cash distributions to the Limited Partners differ from the allocated
     net earnings  (losses) as presented in these financial  statements  because
     cash  distributions  are based on cash  available  for  distribution.  Cash
     distributions  are paid to the general  and  limited  partners on a monthly
     basis in accordance with the provisions of the Partnership Agreement.  Some
     limited partners have elected to have their  distributions  paid quarterly.
     The  Partnership  has  recorded  deferred  distributions  of $54 and $79 at
     December 31, 2001 and 2000, respectively.

     (h)  Income Taxes

     The Partnership is not subject to income taxes.  Accordingly,  no provision
     for income taxes has been made.  The  Partnership  files  federal and state
     information  returns  only.  Taxable  income or loss is  reportable  by the
     individual partners.

     (i)  Acquisition Fees

     In accordance with the Partnership Agreement,  acquisition fees equal to 5%
     of  the  container  purchase  price  were  paid  to  TEM.  These  fees  are
     capitalized as part of the cost of the containers.

     (j)  Recovery Costs

     The  Partnership  accrues an  estimate  for  recovery  costs as a result of
     defaults under its leases that it expects to incur,  which are in excess of
     estimated  insurance  proceeds.  At December 31, 2001 and 2000, the amounts
     accrued were $194 and $193, respectively.

     (k)  Damage Protection Plan

     The  Partnership  offers a Damage  Protection  Plan (DPP) to lessees of its
     containers.  Under  the  terms of DPP,  the  Partnership  earns  additional
     revenues on a daily basis and, in return, has agreed to bear certain repair
     costs. It is the Partnership's  policy to recognize revenue when earned and
     provide a reserve  sufficient to cover the  estimated  future repair costs.
     DPP expenses are included in direct container expenses in the Statements of
     Operations and the related  reserve at December 31, 2001 and 2000, was $162
     and $279, respectively.

     (l)  Warranty Claims

     During 1992 and 1995, the  Partnership  settled  warranty  claims against a
     container  manufacturer.  The  Partnership  is  amortizing  the  settlement
     amounts  over  the  remaining  estimated  useful  lives  of the  applicable
     containers (between six and seven years),  reducing  maintenance and repair
     costs  over that time.  At  December  31,  2001 and 2000,  the  unamortized
     portion of the settlement amount was equal to $69 and $109, respectively.

     (m)  Limited   Partners'  Per  Unit  Share  of  Net  Earnings   (Loss)  and
     Distributions

     Limited   partners'  per  unit  share  of  both  net  earnings  (loss)  and
     distributions  were  computed  using the weighted  average  number of units
     outstanding  during the years ended December 31, 2001, 2000 and 1999, which
     were 6,095,766, 6,127,711, and 6,136,934, respectively.
<TABLE>
<CAPTION>

     (n)  Redemptions

     The following  redemption  offerings were  consummated  by the  Partnership
     during the years ended December 31, 2001, 2000 and 1999:

                                                         Units                 Average
                                                       Redeemed           Redemption Price           Amount Paid
                                                       --------           ----------------           -----------
<S>                                                       <C>                    <C>                     <C>

      Total Partnership redemptions as of
        December 31, 1998.....................           96,140                $ 14.04                  $1,350
                                                        -------                                          -----

      Year ended December 31, 1999:
            1st quarter.......................           16,926                $  9.28                     157
                                                        -------                                          -----

      Year ended December 31, 2000:
            1st quarter.......................              500                $  7.50                       4
            3rd quarter.......................           12,921                $  7.26                      94
            4th quarter.......................            9,051                $  7.51                      68
                                                        -------                                          -----
                                                         22,472                $  7.39                     166
                                                        -------                                          -----

      Year ended December 31, 2001:
            1st quarter.......................           13,686                $  8.00                     109
            3rd quarter.......................            7,188                $  7.03                      51
            4th quarter.......................            5,663                $  6.65                      38
                                                        -------                                          -----
                                                         26,537                $  7.45                     198
                                                        -------                                          -----

      Total Partnership redemptions as of
        December 31, 2001.....................          162,075                $ 11.55                  $1,871
                                                        =======                                          =====

      The redemption price is fixed by formula.
</TABLE>


Note 2.  Transactions with Affiliates

     As part of the operation of the  Partnership,  the Partnership is to pay to
     the General  Partners an acquisition  fee, an equipment  management fee, an
     incentive  management fee and an equipment  liquidation fee. These fees are
     for various  services  provided in connection with the  administration  and
     management of the Partnership.  The Partnership  capitalized $32, $239, and
     $172 of container  acquisition  fees as part of container  rental equipment
     costs  during  the  years  ended   December   31,  2001,   2000  and  1999,
     respectively.  The Partnership  incurred $308,  $361, and $410 of incentive
     management  fees during each of the three years ended  December  31,  2001,
     2000 and 1999,  respectively.  No equipment  liquidation fees were incurred
     during these periods.

     The  Partnership's  containers  are managed by TEM. In its role as manager,
     TEM has authority to acquire,  hold, manage, lease, sell and dispose of the
     containers.  TEM holds,  for the payment of direct  operating  expenses,  a
     reserve of cash that has been collected from leasing operations;  such cash
     is included in due from affiliates, net, at December 31, 2001 and 2000.

     Subject to certain reductions,  TEM receives a monthly equipment management
     fee equal to 7% of gross lease revenues  attributable  to master  operating
     leases  and 2% of gross  lease  revenues  attributable  to  direct  finance
     leases.  For the years ended  December 31, 2001,  2000 and 1999,  equipment
     management fees totaled $818, $1,043, and $1,064, respectively.

     Certain  indirect  general  and  administrative  costs  such  as  salaries,
     employee   benefits,   taxes  and  insurance  are  incurred  in  performing
     administrative  services  necessary to the  operation  of the  Partnership.
     These  costs  are  incurred  and paid by TEM and  TFS.  Total  general  and
     administrative costs allocated to the Partnership were as follows:

                                                 2001         2000         1999
                                                 ----         ----         ----

               Salaries                         $ 363        $ 380        $ 437
               Other                              242          356          348
                                                  ---          ---          ---
                 Total general and
                    administrative costs        $ 605        $ 736        $ 785
                                                  ===          ===          ===

     TEM allocates these general and administrative  costs based on the ratio of
     the Partnership's interest in the managed containers to the total container
     fleet managed by TEM during the period.  TFS allocates these costs based on
     the ratio of the  Partnership's  containers to the total container fleet of
     all limited partnerships managed by TFS. The General Partners allocated the
     following general and administrative costs to the Partnership:

                                                 2001         2000         1999
                                                 ----         ----         ----

               TEM                              $ 529        $ 641        $ 701
               TFS                                 76           95           84
                                                  ---          ---          ---
                 Total general and
                    administrative costs        $ 605        $ 736        $ 785
                                                  ===          ===          ===

     The  General  Partners  may acquire  containers  in their own name and hold
     title on a temporary basis for the purpose of facilitating  the acquisition
     of such containers for the  Partnership.  The containers may then be resold
     to the  Partnership  on an  all-cash  basis at a price  equal to the actual
     cost, as defined in the Partnership Agreement. One or more General Partners
     may also arrange for the purchase of containers in its or their names,  and
     the  Partnership may then take title to the containers by paying the seller
     directly. In addition,  the General Partners are entitled to an acquisition
     fee  for  containers  acquired  by  the  Partnership  under  any  of  these
     arrangements.


     At December 31, 2001 and 2000, due from affiliates, net, is comprised of:

                                                            2001           2000
                                                            ----           ----
             Due from affiliates:
                 Due from TEM...........................    $502           $755
                                                             ---            ---

             Due to affiliates:
                 Due to TFS.............................      25             36
                 Due to TCC.............................      22             11
                 Due to TL..............................       1              1
                                                             ---            ---
                                                              48             48
                                                             ---            ---

             Due from affiliates, net                       $454           $707
                                                             ===            ===

     These amounts  receivable  from and payable to affiliates  were incurred in
     the ordinary course of business  between the Partnership and its affiliates
     and represent timing differences in the accrual and remittance of expenses,
     fees and distributions  described above or in the accrual and remittance of
     net rental revenues and container sales proceeds from TEM.

Note 3.  Lease Rental Income (unaudited)

     Leasing income arises principally from the renting of containers to various
     international  shipping lines. Revenue is recorded when earned according to
     the terms of the container rental contracts.  These contracts are typically
     for  terms of five  years or less.  The  following  is the lease mix of the
     on-lease containers (in units) at December 31, 2001 and 2000:

                                                      2001                  2000
                                                      ----                  ----

             On-lease under master leases            9,345                15,282
             On-lease under long-term leases         5,257                 5,349
                                                    ------                ------

             Total on-lease containers              14,602                20,631
                                                    ======                ======

     Under  master  lease  agreements,  the lessee is not  committed  to lease a
     minimum number of containers from the Partnership during the lease term and
     may generally  return any portion or all the containers to the  Partnership
     at any time, subject to certain restrictions in the lease agreement.  Under
     long-term  lease  agreements,   containers  are  usually  leased  from  the
     Partnership  for periods of between  three to five  years.  Such leases are
     generally cancelable with a penalty at the end of each twelve-month period.
     Under direct  finance  leases,  the  containers are usually leased from the
     Partnership  for  the  remainder  of the  container's  useful  life  with a
     purchase option at the end of the lease term.

     The remaining  containers are off-lease and are being stored primarily at a
     large number of storage depots in the following locations:

                America                                2,552
                Europe                                 1,284
                Asia                                   6,123
                                                       -----

                Total off-lease containers             9,959
                                                       =====


     At  December  31, 2001  approximately  11% of the  Partnership's  off-lease
     containers had been specifically identified as for sale.


Note 4.   Income Taxes

     At December 31, 2001,  2000 and 1999,  there were temporary  differences of
     $34,315,  $40,667,  and  $44,589,   respectively,   between  the  financial
     statement  carrying value of certain assets and liabilities and the federal
     income tax basis of such assets and liabilities.  The reconciliation of net
     income  (loss) for financial  statement  purposes to net income for federal
     income tax purposes for the years ended December 31, 2001, 2000 and 1999 is
     as follows:
<TABLE>
<CAPTION>

                                                                            2001               2000           1999
                                                                            ----               ----           ----
<S>                                                                          <C>                <C>             <C>
      Net (loss) income per financial statements...............          $(1,341)           $ 2,710        $   (21)

      (Decrease) increase in provision for bad debt............             (233)              (291)           317
      Depreciation for federal income tax purposes
        less than depreciation for
       financial statement purposes............................            3,024              1,571          2,373
      Gain on sale of fixed assets for federal income
        tax purposes in excess of gain/loss recognized
        for financial statement purposes.......................            3,718              2,839          5,588
      (Decrease) increase in damage protection plan costs......             (117)              (157)           145
      Warranty reserve income for tax purposes in excess
        of financial statement purposes........................              (40)               (40)           (39)
                                                                          ------             ------         ------

      Net income for federal income tax purposes...............          $ 5,011            $ 6,632        $ 8,363
                                                                          ======             ======         ======

</TABLE>


<PAGE>
<TABLE>
<CAPTION>



TEXTAINER EQUIPMENT INCOME FUND III, L.P.
(a California Limited Partnership)

Selected Quarterly Financial Data
-----------------------------------------------------------------------------------------------------------------------

The following is a summary of selected quarterly financial data for the years ended
December 31, 2001, 2000 and 1999:
                                                                              (Amounts in thousands)
                                                                                2001 Quarters Ended
                                                             ----------------------------------------------------------
                                                              Mar. 31          June 30         Sept. 30        Dec. 31
                                                             ----------------------------------------------------------
<S>                                                             <C>             <C>               <C>             <C>
Rental income                                                 $ 3,373          $ 2,984          $ 2,909        $ 2,592

Loss from operations                                          $   (68)         $  (132)         $  (171)       $(1,062)

Net loss                                                      $   (32)         $  (108)         $  (153)       $(1,047)

Limited partners' share of net loss                           $   (54)         $  (131)         $  (171)       $(1,063)

Limited partners' share of distributions                      $ 2,137          $ 2,135          $ 1,728        $ 1,522


                                                                                2000 Quarters Ended
                                                             ----------------------------------------------------------
                                                              Mar. 31          June 30         Sept. 30        Dec. 31
                                                             ----------------------------------------------------------

Rental income                                                 $ 3,782          $ 3,824          $ 3,761        $ 3,768

Income from operations                                        $   357          $   801          $   702        $   606

Net earnings                                                  $   413          $   873          $   765        $   659

Limited partners' share of net earnings                       $   390          $   851          $   742        $   637

Limited partners' share of distributions                      $ 2,148          $ 2,148          $ 2,144        $ 2,141

                                                                                1999 Quarters Ended
                                                             ----------------------------------------------------------
                                                              Mar. 31          June 30         Sept. 30        Dec. 31
                                                             ----------------------------------------------------------

Rental income                                                 $ 3,866          $ 3,607          $ 3,820        $ 3,931

(Loss) income from operations                                 $   (39)         $  (899)         $   170        $   589

Net earnings (loss)                                           $     8          $  (857)         $   200        $   628

Limited partners' share of net earnings (loss)                $   (19)         $  (910)         $   173        $   631
-
Limited partners' share of distributions                      $ 2,534          $ 2,532          $ 2,531        $ 2,276

</TABLE>

<PAGE>



ITEM 9.      CHANGES IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS ON ACCOUNTING AND
             FINANCIAL DISCLOSURE.

There have been none.

                                    PART III

ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The Registrant has no officers or directors.

As described in the Prospectus, the Registrant's three original general partners
were TCC, TEM and Textainer Inc. (TI),  which  comprised the original  Textainer
Group.   Effective  October  1,  1993,  the  Textainer  Group  restructured  its
organization by forming a new holding company,  Textainer Group Holdings Limited
(TGH),  and the  shareholders  of the  underlying  companies  which  include the
General  Partners  accepted  shares in TGH in exchange  for their  shares in the
individual  companies.  Textainer  Financial  Services  Corporation (TFS) is the
Managing  General Partner of the Partnership  (prior to its name change on April
4, 1994, TFS was known as Textainer Capital Corporation).  TFS is a wholly-owned
subsidiary of Textainer  Capital  Corporation (TCC) (prior to its name change on
April 4, 1994, TCC was known as Textainer (Delaware) Inc.).  Textainer Equipment
Management Limited (TEM) is an Associate General Partner of the Partnership.  TI
was an Associate  General Partner of the Partnership  through September 30, 1993
when it was replaced in that capacity by Textainer Limited (TL), pursuant to the
corporate  restructuring effective October 1, 1993, which caused TFS, TEM and TL
to fall under the common ownership of TGH.  Pursuant to this  restructuring,  TI
transferred  substantially  all of its  assets  including  all of its rights and
duties as Associate  General  Partner to TL. This  transfer was  effective  from
October 1, 1993. The end result was that TFS now serves as the Managing  General
Partner and TEM and TL now serve as the Associate General Partners. The Managing
General Partner and Associate  General Partners are collectively  referred to as
the General  Partners  and are  wholly-owned  subsidiaries  of TGH.  The General
Partners also act in this capacity for other limited partnerships.

TFS,  as  the  Managing  General  Partner,   is  responsible  for  managing  the
administration  and operation of the  Registrant,  and for the  formulation  and
administration of investment policies.

TEM, an Associate  General Partner,  manages all aspects of the operation of the
Registrant's equipment.

TL, an Associate  General  Partner,  owns a fleet of container  rental equipment
which is  managed  by TEM.  TL  provides  advice  to the  Partnership  regarding
negotiations  with financial  institutions,  manufacturers and equipment owners,
and regarding the terms upon which particular items of equipment are acquired.

Section 16(a) Beneficial Ownership Reporting Compliance.
--------------------------------------------------------

Section 16(a) of the Securities  Exchange Act of 1934 requires the Partnership's
General Partners,  policy-making officials and persons who beneficially own more
than ten  percent  of the Units to file  reports  of  ownership  and  changes in
ownership with the Securities and Exchange  Commission.  Copies of these reports
must also be furnished to the Partnership.

Based  solely  on a  review  of  the  copies  of  such  forms  furnished  to the
Partnership  or on written  representations  that no forms were  required  to be
filed, the Partnership believes that with respect to its most recent fiscal year
ended  December 31, 2001,  all Section 16(a) filing  requirements  were complied
with. No member of management, or beneficial owner owned more than 10 percent of
any  interest in the  Partnership.  None of the  individuals  subject to section
16(a) failed to file or filed late any reports of transactions in the Units.

<PAGE>
<TABLE>
<CAPTION>

The directors and executive officers of the General Partners are as follows:

Name                             Age     Position
----                             ---     --------
<S>                              <C>      <C>
Neil I. Jowell                   68      Director and Chairman of TGH, TEM, TL, TCC and TFS
John A. Maccarone                57      President, CEO and Director of TGH, TEM, TL, TCC and TFS
James E. Hoelter                 62      Director of TGH, TEM, TL, TCC and TFS
Alex M. Brown                    63      Director of TGH, TEM, TL, TCC and TFS
Harold J. Samson                 80      Director of TGH and TL
Philip K. Brewer                 45      Senior Vice President - Asset Management Group and Director of TEM and TL
Robert D. Pedersen               42      Senior Vice President - Leasing Group, Director of TEM
Ernest J. Furtado                46      Senior Vice  President , CFO and  Secretary  of TGH,  TEM,  TL, TCC and TFS,
                                         Director of TEM, TCC and TFS
Gregory W. Coan                  38      Vice President and Chief Information Officer of TEM
Wolfgang Geyer                   48      Regional Vice President - Europe
Mak Wing Sing                    44      Regional Vice President - South Asia
Masanori Sagara                  46      Regional Vice President - North Asia
Stefan Mackula                   49      Vice President -  Equipment Resale
Anthony C. Sowry                 49      Vice President - Corporate Operations and Acquisitions
Richard G. Murphy                49      Vice President - Risk Management
Janet S. Ruggero                 53      Vice President - Administration and Marketing Services
Jens W. Palludan                 51      Regional Vice President - Americas and Logistics
Isam K. Kabbani                  67      Director of TGH and TL
James A. C. Owens                62      Director of TGH and TL
S. Arthur Morris                 68      Director of TGH, TEM and TL
Dudley R. Cottingham             50      Assistant Secretary, Vice President and Director of TGH, TEM and TL
Nadine Forsman                   34      Controller of TCC and TFS
</TABLE>

     Neil I. Jowell is Director and Chairman of TGH, TEM, TL, TCC, and TFS and a
member of the Investment  Advisory  Committee (see  "Committees" below).  He has
served on the Board of Trencor Ltd. since 1966 and as Chairman since 1973. He is
also a director of Mobile  Industries,  Ltd. (1969 to present),  an affiliate of
Trencor,  and a  non-executive  director of Forward  Corporation  Ltd.  (1993 to
present).  Trencor is a publicly traded  diversified  industrial group listed on
the Johannesburg Stock Exchange. Its business is the leasing,  owning,  managing
and  financing of marine cargo  containers  worldwide  and the  manufacture  and
export of containers for international  markets.  In South Africa, it is engaged
in manufacturing,  trading and exports of general commodities.  Trencor also has
an interest in Forward  Corporation  Ltd.,  a publicly  traded  holding  company
listed on the  Johannesburg  Stock Exchange.  It has interests in industrial and
consumer  businesses  operating in South Africa and abroad.  Mr.  Jowell  became
affiliated  with the General  Partners and its affiliates  when Trencor  became,
through  its  beneficial  ownership  in  two  controlled   companies,   a  major
shareholder  of the  Textainer  Group in 1992.  Mr.  Jowell  has over 36  years'
experience  in the  transportation  industry.  He holds an  M.B.A.  degree  from
Columbia  University  and  Bachelor  of  Commerce  and L.L.B.  degrees  from the
University of Cape Town.

     John A.  Maccarone is President,  CEO and Director of TGH, TEM, TL, TCC and
TFS. In this capacity he is  responsible  for  overseeing  the management of and
coordinating  the  activities  of  Textainer's  worldwide  fleet of marine cargo
containers and the activities of all of these corporations.  Additionally, he is
Chairman of the Equipment  Investment  Committee,  the Credit  Committee and the
Investment  Advisory  Committee (see  "Committees",  below).  Mr.  Maccarone was
instrumental  in co-founding  Intermodal  Equipment  Associates  (IEA), a marine
container  leasing  company  based  in San  Francisco,  and  held a  variety  of
executive  positions with IEA from 1979 until 1987, when he joined the Textainer
Group.  Mr.  Maccarone  was  previously a Director of Marketing  for Trans Ocean
Leasing  Corporation in Hong Kong with responsibility for all leasing activities
in  Southeast  Asia.   From  1969  to  1977,  Mr.   Maccarone  was  a  marketing
representative  for IBM  Corporation.  He holds a Bachelor of Science  degree in
Engineering  Management  from  Boston  University  and  an  M.B.A.  from  Loyola
University of Chicago.

     James E.  Hoelter is a director of TGH,  TEM, TL, TCC and TFS. In addition,
Mr. Hoelter is a member of the Equipment Investment Committee and the Investment
Advisory Committee (see "Committees",  below). Mr. Hoelter was the President and
Chief Executive  Officer of TGH and TL from 1993 to 1998 and currently serves as
a consultant to Trencor (1999 to present).  Prior to joining the Textainer Group
in 1987, Mr.  Hoelter was president of IEA. Mr.  Hoelter  co-founded IEA in 1978
with Mr.  Maccarone and was president  from inception  until 1987.  From 1976 to
1978, Mr.  Hoelter was vice  president for Trans Ocean Ltd.,  San  Francisco,  a
marine container  leasing  company,  where he was responsible for North America.
From 1971 to 1976, he worked for Itel Corporation,  San Francisco,  where he was
director of financial leasing for the container  division.  Mr. Hoelter received
his B.B.A. in finance from the University of Wisconsin,  where he is an emeritus
member of its Business  School's Dean's Advisory Board, and his M.B.A.  from the
Harvard Graduate School of Business Administration.

     Alex M. Brown is a director of TGH, TEM, TL, TCC and TFS. Additionally,  he
is a member of the Equipment  Investment  Committee and the Investment  Advisory
Committee (see "Committees",  below). Among other directorships,  Mr. Brown is a
director of Trencor Ltd. (1996 to present). Mr. Brown became affiliated with the
Textainer  Group in April 1986. From 1987 until 1993, he was President and Chief
Executive  Officer of Textainer,  Inc. and the Chairman of the Textainer  Group.
Mr. Brown was the managing director of Cross County Leasing in England from 1984
until it was  acquired by Textainer  in 1986.  From 1993 to 1997,  Mr. Brown was
Chief Executive Officer of AAF, a company affiliated with Trencor Ltd. Mr. Brown
was also Chairman of WACO International  Corporation,  based in Cleveland,  Ohio
until 1997.

     Harold J.  Samson is a director  of TGH and TL and has served as such since
the Textainer Group's  reorganization  and formation of these companies in 1993.
He is also a member of the  Investment  Advisory  Committee  (see  "Committees",
below).  Mr. Samson served as a consultant to various securities firms from 1981
to 1989. From 1974 to 1981 he was Executive Vice President of Foster & Marshall,
Inc., a New York Stock Exchange  member firm based in Seattle.  Mr. Samson was a
director  of IEA  from  1979 to  1981.  From  1957 to 1984 he  served  as  Chief
Financial  Officer in several New York Stock Exchange  member firms.  Mr. Samson
holds a B.S. in  Business  Administration  from the  University  of  California,
Berkeley and is a California Certified Public Accountant.

     Philip K. Brewer is Senior  Vice  President  - Asset  Management  Group and
director of TEM and TL. He was  President of TCC and TFS from January 1, 1998 to
December  31,  1998  until his  appointment  as Senior  Vice  President  - Asset
Management Group. As President of TCC, Mr. Brewer was responsible for overseeing
the  management  of, and  coordinating  the activities of TCC and TFS. As Senior
Vice President,  he is responsible  for optimizing the capital  structure of and
identifying  new sources of finance for  Textainer,  as well as  overseeing  the
management of and  coordinating  the activities of Textainer's  risk management,
logistics  and the resale  divisions.  Mr.  Brewer is a member of the  Equipment
Investment  Committee,  the Credit  Committee and was a member of the Investment
Advisory Committee through December 31, 1998 (see "Committees" below).  Prior to
joining  Textainer in 1996, as Senior Vice  President - Capital  Markets for TGH
and TL, Mr. Brewer worked at Bankers Trust from 1990 to 1996, starting as a Vice
President  in  Corporate  Finance  and ending as Managing  Director  and Country
Manager for  Indonesia;  from 1989 to 1990,  he was Vice  President in Corporate
Finance at Jarding Fleming; from 1987 to 1989, he was Capital Markets Advisor to
the United States Agency for International Development; and from 1984 to 1987 he
was an Associate  with Drexel  Burnham  Lambert in New York. Mr. Brewer holds an
M.B.A. in Finance from the Graduate  School of Business at Columbia  University,
and a B.A. in Economics and Political Science from Colgate University.

     Robert D. Pedersen is Senior  Vice-President - Leasing Group and a Director
of TEM,  responsible  for worldwide sales and marketing  related  activities and
operations.  Mr. Pedersen is a member of the Equipment  Investment Committee and
the Credit Committee (see  "Committees"  below).  He joined Textainer in 1991 as
Regional Vice  President  for the Americas  Region.  Mr.  Pedersen has extensive
experience in the industry  having held a variety of positions with Klinge Cool,
a  manufacturer  of  refrigerated  container  cooling units (from 1989 to 1991),
where he was worldwide sales and marketing  director,  XTRA, a container  lessor
(from 1985 to 1988) and Maersk  Line,  a container  shipping  line (from 1978 to
1984). Mr. Pedersen is a graduate of the A.P. Moller shipping and transportation
program and the  Merkonom  Business  School in  Copenhagen,  majoring in Company
Organization.

     Ernest J. Furtado is Senior Vice President,  CFO and Secretary of TGH, TEM,
TL, TCC and TFS and a Director  of TEM,  TCC and TFS,  in which  capacity  he is
responsible for all accounting,  financial  management,  and reporting functions
for TGH, TEM, TL, TCC and TFS.  Additionally,  he is a member of the  Investment
Advisory  Committee for which he serves as Secretary,  the Equipment  Investment
Committee and the Credit  Committee (see  "Committees",  below).  Prior to these
positions,  he held a number of accounting and financial management positions at
Textainer, of increasing responsibility. Prior to joining Textainer in May 1991,
Mr.  Furtado was Controller for Itel Instant Space and manager of accounting for
Itel Containers International  Corporation,  both in San Francisco, from 1984 to
1991. Mr.  Furtado's  earlier  business  affiliations  include  serving as audit
manager for Wells Fargo Bank and as senior accountant with John F. Forbes & Co.,
both in San Francisco.  He is a Certified Public  Accountant and holds a B.S. in
business  administration  from the  University  of California at Berkeley and an
M.B.A. in information systems from Golden Gate University.

     Gregory W. Coan is Vice President and Chief Information  Officer of TEM. In
this capacity,  Mr. Coan is responsible for the worldwide information systems of
Textainer and serves on the Credit Committee (see "Committees", below). Prior to
these  positions,  Mr.  Coan was the  Director  of  Communications  and  Network
Services from 1995 to 1999, where he was responsible for Textainer's network and
hardware  infrastructure.  Mr. Coan holds a Bachelor of Arts degree in political
science from the  University  of  California  at Berkeley and an M.B.A.  with an
emphasis in telecommunications from Golden Gate University.

     Wolfgang Geyer is based in Hamburg,  Germany and is Regional Vice President
- Europe,  responsible for coordinating all leasing activities in Europe, Africa
and the Middle East/Persian Gulf. Mr. Geyer joined Textainer in 1993 and was the
Marketing  Director in Hamburg  through July 1997.  From 1991 to 1993, Mr. Geyer
most  recently  was the  Senior  Vice  President  for  Clou  Container  Leasing,
responsible for its worldwide leasing activities.  Mr. Geyer spent the remainder
of his leasing career, 1975 through 1991, with Itel Container, during which time
he held numerous positions in both operations and marketing within the company.

     Mak Wing Sing is based in Singapore  and is the Regional  Vice  President -
South Asia,  responsible  for  container  leasing  activities  in  North/Central
People's  Republic of China,  Hong Kong,  South China (PRC),  Southeast Asia and
Australia/New Zealand. Mr. Mak most recently was the Regional Manager, Southeast
Asia,  for Trans Ocean  Leasing,  working there from 1994 to 1996.  From 1987 to
1994, Mr. Mak worked with Tiphook as their Regional  General  Manager,  and with
OOCL  from  1976 to 1987 in a  variety  of  positions,  most  recently  as their
Logistics Operations Manager.

     Masanori  Sagara  is based in  Yokohama,  Japan  and is the  Regional  Vice
President - North Asia,  responsible for container leasing  activities in Japan,
Korea,  and Taiwan.  Mr. Sagara  joined  Textainer in 1990 and was the company's
Marketing  Director  in  Japan  through  1996.  From  1987 to  1990,  he was the
Marketing Manager at IEA. Mr. Sagara's other experience in the container leasing
business includes marketing  management at Genstar from 1984 to 1987 and various
container  operations  positions  with Thoresen & Company from 1979 to 1984. Mr.
Sagara  holds a Bachelor  of Science  degree in  Economics  from  Aoyama  Bakuin
University.

     Stefan  Mackula is Vice  President  -  Equipment  Resale,  responsible  for
coordinating the worldwide sale of equipment into secondary markets. Mr. Mackula
also  served  as Vice  President  -  Marketing  from  1989 to 1991  where he was
responsible for coordinating all leasing  activities in Europe,  Africa, and the
Middle East.  Mr. Mackula  joined  Textainer in 1983 as Leasing  Manager for the
United Kingdom. Prior to joining Textainer, Mr. Mackula held, beginning in 1972,
a variety of positions in the international container shipping industry.

     Anthony C. Sowry is Vice President - Corporate Operations and Acquisitions.
He is also a  member  of the  Equipment  Investment  Committee  and  the  Credit
Committee (see  "Committees",  below).  Mr. Sowry  supervises all  international
container  operations  and  maintenance  and technical  functions for the fleets
under Textainer's management. In addition, he is responsible for the acquisition
of all new and used containers for the Textainer Group. He began his affiliation
with  Textainer in 1982,  when he served as Fleet  Quality  Control  Manager for
Textainer  Inc.  until 1988.  From 1980 to 1982, he was  operations  manager for
Trans  Container  Services in London;  and from 1978 to 1982, he was a technical
representative  for Trans Ocean  Leasing,  also in London.  He received his B.A.
degree in business management from the London School of Business. Mr. Sowry is a
member of the Technical  Committee of the  International  Institute of Container
Lessors and a certified container inspector.

     Richard G. Murphy is Vice President - Risk Management,  responsible for all
credit and risk  management  functions.  He also  supervises the  administrative
aspects of  equipment  acquisitions.  He is a member of and acts as secretary to
the Equipment  Investment and Credit  Committees (see  "Committees",  below). He
previously  served as TEM's Director of Credit and Risk  Management from 1989 to
1991  and as  Controller  from  1988  to  1989.  Prior  to the  takeover  of the
management of the Interocean  Leasing Ltd. fleet by TEM in 1988, Mr. Murphy held
various  positions in the accounting and financial  areas with that company from
1980,  acting as Chief  Financial  Officer from 1984 to 1988.  Prior to 1980, he
held various  positions with firms of public  accountants in the U.K. Mr. Murphy
is an Associate of the Institute of Chartered  Accountants  in England and Wales
and holds a Bachelor of Commerce degree from the National University of Ireland.

     Janet S. Ruggero is Vice President - Administration and Marketing Services.
Ms.  Ruggero is  responsible  for the  tracking  and billing of fleets under TEM
management,  including direct responsibility for ensuring that all data is input
in an accurate and timely  fashion.  She assists the  marketing  and  operations
departments  by  providing  statistical  reports and  analyses and serves on the
Credit Committee (see "Committees",  below). Prior to joining Textainer in 1986,
Ms.  Ruggero held various  positions with Gelco CTI over the course of 15 years,
the last one as Director of Marketing and  Administration for the North American
Regional  office in New York City. She has a B.A. in education  from  Cumberland
College.

     Jens W.  Palludan is based in  Hackensack,  New Jersey and is the  Regional
Vice  President - Americas and  Logistics,  responsible  for  container  leasing
activities in North/South America and for coordinating  container logistics.  He
joined Textainer in 1993 as Regional Vice President - Americas/Africa/Australia,
responsible for coordinating all leasing  activities in North and South America,
Africa and  Australia/New  Zealand.  Mr.  Palludan  spent his  career  from 1969
through  1992 with  Maersk  Line of  Copenhagen,  Denmark  in a  variety  of key
management  positions in both Denmark and overseas.  Mr.  Palludan's most recent
position at Maersk was that of General Manager,  Equipment and Terminals,  where
he was  responsible  for the entire managed fleet.  Mr. Palludan holds an M.B.A.
from the Centre European D'Education Permanente, Fontainebleau, France.

     Sheikh  Isam K.  Kabbani is a director of TGH and TL. He has served as such
since the Textainer Group's  reorganization  and formation of these companies in
1993. He is Chairman and principal  stockholder of the IKK Group,  Jeddah, Saudi
Arabia,  a manufacturing  and trading group which is active both in Saudi Arabia
and  internationally.  In 1959  Sheikh  Isam  Kabbani  joined the Saudi  Arabian
Ministry of Foreign Affairs,  and in 1960 moved to the Ministry of Petroleum for
a period of ten years.  During this time he was seconded to the  Organization of
Petroleum Exporting Countries (OPEC). After a period as Chief Economist of OPEC,
in 1967 he became the Saudi Arabian member of OPEC's Board of Governors. In 1970
he left the Ministry of Petroleum to establish  his own  business,  the National
Marketing Group, which has since been his principal  business  activity.  Sheikh
Kabbani holds a B.A. degree from Swarthmore College,  Pennsylvania,  and an M.A.
degree in Economics and International Relations from Columbia University.

     James  A. C.  Owens  is a  director  of TGH  and TL.  Mr.  Owens  has  been
associated  with the Textainer Group since 1980. In 1983 he was appointed to the
Board of Textainer  Inc., and served as President of Textainer Inc. from 1984 to
1987. From 1987 to 1998, Mr. Owens served as an alternate director on the Boards
of TI, TGH and TL and has served as  director  of TGH and TL since  1998.  Apart
from his association  with the Textainer  Group,  Mr. Owens has been involved in
insurance and financial brokerage companies and captive insurance companies.  He
is a member of a number of Boards of  Directors.  Mr.  Owens holds a Bachelor of
Commerce degree from the University of South Africa.

     S. Arthur Morris is a director of TGH, TEM and TL. He is a founding partner
in the firm of Morris and Kempe, Chartered Accountants (1962-1977) and currently
functions  as a  correspondent  member of a number of  international  accounting
firms  through his firm Arthur  Morris and  Company  (1977 to date).  He is also
President  and  director  of  Continental  Management  Limited  (1977 to  date).
Continental  Management Limited is a Bermuda corporation that provides corporate
representation,   administration  and  management  services  and  corporate  and
individual  trust  administration   services.  Mr.  Morris  has  over  30  years
experience in public  accounting and serves on numerous  business and charitable
organizations  in the Cayman  Islands and Turks and Caicos  Islands.  Mr. Morris
became a director of TL and TGH in 1993, and TEM in 1994.

     Dudley R. Cottingham is Assistant Secretary,  Vice President and a director
of TGH,  TEM and TL. He is a partner  with Arthur  Morris and  Company  (1977 to
date) and a Vice President and director of Continental  Management Limited (1978
to date),  both in the Cayman Islands and Turks and Caicos Islands.  Continental
Management   Limited  is  a  Bermuda   corporation   that   provides   corporate
representation,   administration  and  management  services  and  corporate  and
individual  trust  administration  services.  Mr.  Cottingham  has over 20 years
experience  in  public   accounting  with   responsibility   for  a  variety  of
international and local clients.  Mr. Cottingham became a director of TL and TGH
in 1993, and TEM in 1994.

     Nadine  Forsman is the  Controller of TCC and TFS.  Additionally,  she is a
member of the Investment Advisory Committee and Equipment  Investment  Committee
(See  "Committees"  below). As controller of TCC and TFS, she is responsible for
accounting, financial management and reporting functions for TCC and TFS as well
as  overseeing  all  communications  with  the  Limited  Partners  and as  such,
supervises  personnel in performing these functions.  Prior to joining Textainer
in August 1996, Ms. Forsman was employed by KPMG LLP, holding various positions,
the most  recent  of which was  manager,  from 1990 to 1996.  Ms.  Forsman  is a
Certified Public  Accountant and holds a B.S. in Accounting and Finance from San
Francisco State University.


Committees

     The Managing General Partner has established the following three committees
to  facilitate   decisions   involving   credit  and   organizational   matters,
negotiations,  documentation,  management and final disposition of equipment for
the Partnership and for other programs organized by the Textainer Group:

     Equipment Investment Committee.  The Equipment Investment Committee reviews
the  equipment  leasing  operations of the  Partnership  on a regular basis with
emphasis on matters involving equipment purchases, equipment remarketing issues,
and decisions  regarding ultimate  disposition of equipment.  The members of the
committee are John A. Maccarone (Chairman),  James E. Hoelter, Anthony C. Sowry,
Richard G.  Murphy  (Secretary),  Alex M.  Brown,  Philip K.  Brewer,  Robert D.
Pedersen, Ernest J. Furtado and Nadine Forsman.

     Credit Committee.  The Credit Committee establishes credit limits for every
lessee and potential lessee of equipment and periodically  reviews these limits.
In setting such limits, the Credit Committee  considers such factors as customer
trade routes,  country,  political risk, operational history, credit references,
credit agency analyses, financial statements, and other information. The members
of the Credit  Committee  are John A.  Maccarone  (Chairman),  Richard G. Murphy
(Secretary),  Janet S. Ruggero,  Anthony C. Sowry,  Philip K. Brewer,  Ernest J.
Furtado, Robert D. Pedersen and Gregory W. Coan.

     Investment  Advisory  Committee.  The Investment Advisory Committee reviews
investor program operations on at least a quarterly basis,  emphasizing  matters
related to cash  distributions  to investors,  cash flow  management,  portfolio
management, and liquidation. The Investment Advisory Committee is organized with
a  view  to  applying  an  interdisciplinary  approach,   involving  management,
financial,  legal and marketing  expertise,  to the analysis of investor program
operations.  The  members  of the  Investment  Advisory  Committee  are  John A.
Maccarone (Chairman),  James E. Hoelter,  Ernest J. Furtado (Secretary),  Nadine
Forsman, Harold J. Samson, Alex M. Brown and Neil I. Jowell.

ITEM 11.     EXECUTIVE COMPENSATION

The Registrant  has no executive  officers and does not reimburse TFS, TEM or TL
for the  remuneration  payable  to their  executive  officers.  For  information
regarding  reimbursements  made by the Registrant to the General  Partners,  see
note 2 of the Financial Statements in Item 8.




ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a)      Security Ownership of Certain Beneficial Owners

         There is no person or "Group" who is known to the Registrant to be the
         beneficial owner of more than five percent of the outstanding units of
         limited partnership interest in the Registrant.

(b)      Security Ownership of Management

         As of January 1, 2002:

                                                          Number
               Name of Beneficial Owner                  Of Units   % All Units
               ------------------------                  --------   -----------

               James E. Hoelter.................            2,500       0.0411%
               John A. Maccarone................            2,520       0.0414%
               Harold Samson....................            2,500       0.0411%
               Anthony C. Sowry.................              274       0.0045%
                                                            -----       -------

               Officers and Management
                as a Group......................            7,794       0.1281%
                                                            =====       =======

(c)      Changes in control.

         Inapplicable.

ITEM 201 (d) Securities under Equity Compensation Plans.

         Inapplicable.

ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                             (Amounts in thousands)

(a)      Transactions with Management and Others.

          At December 31, 2001 and 2000, due from affiliates, net, is comprised
          of:

                                                           2001             2000
                                                           ----             ----
                Due from affiliates:
                   Due from TEM......................      $502             $755
                                                            ---              ---

                Due to affiliates:
                   Due to TFS........................        25               36
                   Due to TCC........................        22               11
                   Due to TL.........................         1                1
                                                            ---              ---
                                                             48               48
                                                            ---              ---

                Due from affiliates, net                   $454             $707
                                                            ===              ===

         These amounts  receivable from and payable to  affiliates were incurred
         in the ordinary  course of  business  between the  Partnership  and its
         affiliates  and  represent   timing  differences  in  the  accrual  and
         remittance of expenses,  fees  and  distributions or in the accrual and
         remittance of net rental  revenues and  container  sales  proceeds from
         TEM.


         In addition,  the Registrant paid or will pay  the following amounts to
         the General Partners:

         Acquisition  fees in  connection  with  the purchase of  containers  on
         behalf of the Registrant:

                                        2001              2000              1999
                                        ----              ----              ----

              TEM...............         $32              $239              $172
                                          --               ---               ---

         Management fees in connection with the operations of the Registrant:

                                        2001              2000              1999
                                        ----              ----              ----

              TEM...............      $  886            $1,122            $1,154
              TFS...............         240               282               320
                                       -----             -----             -----

             Total..............      $1,126            $1,404            $1,474
                                       =====             =====             =====

         Reimbursement  for   administrative  costs   in  connection   with  the
         operations of the Registrant:

                                        2001              2000              1999
                                        ----              ----              ----

              TEM...............        $529              $641              $701
              TFS...............          76                95                84
                                         ---               ---               ---

              Total.............        $605              $736              $785
                                         ===               ===               ===


         The General Partners may acquire containers  in their own name and hold
         title  on  a  temporary  basis  for the  purpose  of  facilitating  the
         acquisition of  such containers for the Partnership. The containers may
         then be  resold to the  Partnership  on an  all-cash   basis at a price
         equal to the actual cost, as defined in the  Partnership Agreement. One
         or  more  General  Partners  may  also   arrange  for the  purchase  of
         containers in its or their names,  and  the  Partnership  may then take
         title to the  containers by paying the  seller  directly.  In addition,
         the General Partners are entitled to an  acquisition fee for containers
         acquired by the Partnership under any of these arrangements.


(b)      Certain Business Relationships.

         Inapplicable.

(c)      Indebtedness of Management

         Inapplicable.

(d)      Transactions with Promoters

         Inapplicable.

See the  "Management"  and  "Compensation  of General  Partners and  Affiliates"
sections of the Registrant's Prospectus,  as supplemented,  and the Notes to the
Financial Statements in Item 8.


                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)      1.       Audited  financial statements of the  Registrant for  the year
                  ended   December  31, 2001   are  contained in Item  8 of this
                  Report.

         2.       Financial Statement Schedules.

                  (i)      Independent   Auditors'   Report   on   Supplementary
                           Schedule.

                  (ii)     Schedule II - Valuation and Qualifying Accounts.

         3.       Exhibits Incorporated by reference.

                  (i)      The  Registrant's    Prospectus   as   contained   in
                           Pre-Effective Amendment No. 2 to   the   Registrant's
                           Registration Statement (No. 33-36255),  as filed with
                           the Commission December  21, 1990, as supplemented by
                           Post-Effective Amendments  No. 1, 2 and 3 filed  with
                           the Commission  under Section 8(c) of the  Securities
                           Act of  1933  on March  1, 1991, January 13, 1992 and
                           February 4, 1992, respectively.

                  (ii)     The   Registrant's   limited  partnership  agreement,
                           Exhibit A to the Prospectus.

(b)      During the year ended 2001, no reports on  Form 8-K have been  filed by
         the Registrant.

<PAGE>

             Independent Auditors' Report on Supplementary Schedule
             ------------------------------------------------------


The Partners
Textainer Equipment Income Fund III, L.P.:

Under the date of February  11,  2002,  we  reported  on the  balance  sheets of
Textainer  Equipment Income Fund III, L.P. (the  Partnership) as of December 31,
2001 and 2000, and the related  statements of operations, partners'  capital and
cash flows for each of the years in the  three-year  period  ended  December 31,
2001,  which are included in the 2001 annual  report on Form 10-K. In connection
with our audit of the aforementioned  financial statements,  we also audited the
related  financial  statement  schedule  as  listed in Item 14.  This  financial
statement  schedule is the responsibility of the Partnership's  management.  Our
responsibility  is to express an opinion on this  financial  statement  schedule
based on our audits.

In our  opinion,  such  schedule,  when  considered  in  relation  to the  basic
financial  statements  taken  as a  whole,  presents  fairly,  in  all  material
respects, the information set forth therein.



                                  /s/ KPMG LLP



San Francisco, California
February 11, 2002


<PAGE>
<TABLE>
<CAPTION>

TEXTAINER EQUIPMENT INCOME FUND III, L.P.
(a California Limited Partnership)

Schedule II - Valuation and Qualifying Accounts

(Amounts in thousands)
----------------------------------------------------------------------------------------------------------------

                                                            Charged                                      Balance
                                         Balance at         to Costs       Charged                       at End
                                         Beginning            and          to Other                        of
                                         of Period          Expenses       Accounts    Deduction         Period
                                         ---------          --------       --------    ---------         ------
<S>                                          <C>               <C>            <C>         <C>             <C>
For the year ended December 31, 2001:

Allowance for
  doubtful accounts                        $   465           $   (44)      $      -      $  (189)       $    232
                                           -------           -------       --------      -------        --------


Recovery cost reserve                      $   193           $    94       $      -      $   (93)       $    194
                                           -------           -------       --------      -------        --------


Damage protection
  plan reserve                             $   279           $   308       $      -      $  (425)       $    162
                                           -------           -------       --------      -------        --------



For the year ended December 31, 2000:

Allowance for
  doubtful accounts                        $   756           $   (23)      $      -      $  (268)       $    465
                                           -------           -------       --------      -------        --------


Recovery cost reserve                      $   165           $   119       $      -      $   (91)       $    193
                                           --------          -------       --------      -------        --------


Damage protection
  plan reserve                             $   436           $   331       $      -      $  (488)       $    279
                                           -------           -------       --------      -------        --------



For the year ended December 31, 1999:

Allowance for
  doubtful accounts                        $   439           $   353       $      -      $   (36)       $    756
                                           -------           -------       --------      -------        --------

Recovery cost reserve                      $   116           $   149       $      -      $  (100)       $    165
                                           -------           -------       --------      -------        --------


Damage protection
  plan reserve                             $   291           $   692       $      -      $  (547)       $    436
                                           -------           -------       --------      -------        --------

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                   SIGNATURES


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.

                                   TEXTAINER EQUIPMENT INCOME FUND III, L.P.
                                   A California Limited Partnership

                                   By Textainer Financial Services Corporation
                                   The Managing General Partner

                                    By
                                      ________________________________________
                                      Ernest J. Furtado
                                      Senior Vice President

Date:  March 28, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Textainer  Financial
Services  Corporation,  the Managing  General Partner of the Registrant,  in the
capacities and on the dates indicated:

Signature                                        Title                                        Date
<S>                                              <C>                                            <C>



______________________________
Ernest J. Furtado                                Senior Vice President, CFO                   March 28, 2002
                                                 (Principal Financial and
                                                 Accounting Officer),
                                                 Secretary and Director


______________________________                   President (Principal Executive               March 28, 2002
John A. Maccarone                                Officer), and Director




______________________________                   Chairman of the Board and Director           March 28, 2002
Neil I. Jowell



</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                                   SIGNATURES


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.

                                   TEXTAINER EQUIPMENT INCOME FUND III, L.P.
                                   A California Limited Partnership


                                   By Textainer Financial Services Corporation
                                   The Managing General Partner

                                   By /s/Ernest J. Furtado
                                      _________________________________________
                                      Ernest J. Furtado
                                      Senior Vice President

Date:  March 28, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Textainer  Financial
Services  Corporation,  the Managing  General Partner of the Registrant,  in the
capacities and on the dates indicated:

Signature                                        Title                                        Date

<S>                                               <C>                                          <C>

/s/ Ernest J. Furtado
___________________________________              Senior Vice President, CFO                   March 28, 2002
Ernest J. Furtado                                (Principal Financial and
                                                 Accounting Officer),
                                                 Secretary and Director


/s/ John A. Maccarone
___________________________________              President (Principal Executive               March 28, 2002
John A. Maccarone                                Officer), and Director



/s/ Neil I. Jowell
___________________________________              Chairman of the Board and Director           March 28, 2002
Neil I. Jowell

</TABLE>