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


March 20, 2001


Securities and Exchange Commission
Washington, DC  20549

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, 2000.

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, 2000

                         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)

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

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.

         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 any physical damage to containers  caused by
                  lessees.  Container leasing companies compete with one another
                  on the basis of lease rates,  availability  of  equipment  and
                  services provided.  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.  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, 2000,  1999 and 1998 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  89% of the  total
                  equipment held by all container leasing companies. The top two
                  container leasing companies combined control approximately 34%
                  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, 2000 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, 2000 had a total of 164 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  15%,  15% and  22% of the  Registrant's  rental  revenue
         during the years ended December 31, 2000, 1999 and 1998,  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.
<PAGE>

ITEM 2.      PROPERTIES

As of December 31, 2000, the Registrant owned the following types and quantities
of equipment:

         20-foot standard dry freight containers                           8,328
         40-foot standard dry freight containers                          10,843
         40-foot high cube dry freight containers                          7,981
                                                                          ------
                                                                          27,152
                                                                          ======

During  December 2000,  approximately  75% of these  containers were on lease to
international shipping companies, and the balance were being stored at container
manufacturers'  locations  and 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, 2000, less than 1% of the Partnership's equipment had
been identified as being for sale.

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, 2001,  there were 7,662  holders of record of
                  limited partnership interests in the Registrant.

(b)(2)            Inapplicable.

(c)      Dividends.

                  Inapplicable.

At December 31, 2000, the Registrant was paying  distributions  at an annualized
rate  equal to 7% of a Unit's  initial  cost,  or $1.40 per Unit per  year.  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.
<PAGE>
<TABLE>
<CAPTION>


ITEM 6.      SELECTED FINANCIAL DATA

                                                  (Amounts in thousands except for per unit amounts)

                                                                       Year Ended December 31,
                                                -----------------------------------------------------------------------
                                                      2000          1999          1998           1997           1996
                                                      ----          ----          ----           ----           ----
<S>                                                    <C>           <C>           <C>            <C>            <C>
Rental income...........................           $ 15,135      $ 15,224      $ 18,904       $ 19,361       $ 21,349

Income (loss) from operations...........           $  2,466      $   (179)     $  3,769       $  5,096       $  7,709

Net earnings (loss).....................           $  2,710      $    (21)     $  3,886       $  5,173       $  7,795

Net earnings (loss) per unit of
  limited partner interest..............           $   0.43      $  (0.02)     $   0.61       $   0.82       $   1.24


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

Distributions per unit of limited
   partnership interest representing
   a return of capital..................           $   0.97      $   1.61      $   1.16       $   1.03       $   0.61

Total assets............................           $ 59,080      $ 64,803      $ 74,579       $ 82,248       $ 88,765

</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 that will assist in evaluating the
financial  condition of the  Partnership  for the years ended December 31, 2000,
1999 and 1998.  Please refer to the  Financial  Statements  and Notes thereto in
connection with the following discussion.

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.

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,  2000,  the
Partnership  redeemed  22,472  units  for a total  dollar  amount  of $166.  The
Partnership used cash flow from operations to pay for the redeemed units.

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.  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 7% of their original investment.  During the year ended December
31, 2000,  the  Partnership  declared  cash  distributions  to limited  partners
pertaining to the period from December 1999 through November 2000, in the amount
of $8,581.  On a cash basis, all of these  distributions  were from current year
operating  activities.  On a GAAP  basis,  $5,961 of these  distributions  was a
return of capital and the balance was from net income.

At December 31, 2000, the Partnership had no commitments to purchase containers.

Net cash provided by operating  activities for the years ended December 31, 2000
and 1999, was $9,953 and $8,550, respectively. The increase of $1,403 or 16% was
primarily  attributable  to the  fluctuation  in  accounts  receivable  and  the
increase in net  earnings,  adjusted  for non-cash  transactions,  offset by the
fluctuations in accrued damage  protection  plan costs and due from  affiliates,
net.  The  decrease  in  accounts  receivable  of $1,257  during  the year ended
December 31, 2000 was  primarily  due to the decrease in the average  collection
period of  accounts  receivable.  For the  comparable  period in 1999,  accounts
receivable  decreased primarily due to the decline in rental income offset by an
increase in the average collection period of accounts receivable.  Net earnings,
adjusted for non-cash  transactions,  increased  primarily due to the decline in
direct  container  expenses,  which are  discussed  more  fully in  "Results  of
Operations." The decline in accrued damage  protection plan costs of $157 during
the  year  ended  December  31,  2000 was  primarily  due to a  decrease  in the
estimated  average  repair  cost per  container  and a decrease in the number of
containers  covered under the damage  protection  plan. The  fluctuations in due
from affiliates, net resulted from timing differences in the payment of expenses
and fees and the remittance of net rental revenues and container sales proceeds,
as well as in fluctuations in these amounts.

For the year ended December 31, 2000, net cash used in investing activities (the
purchase and sale of  containers)  was $1,594  compared to net cash  provided by
investing  activities of $1,501 for the comparable  period in 1999. The increase
in net cash used in  investing  activities  of $3,095 was due to the decrease in
proceeds  from  container  sales and the  increase  in cash  used for  container
purchases.  The  decrease  in  proceeds  from  container  sales  during 2000 was
primarily due to the  Partnership  selling fewer units during 2000 than in 1999.
Cash used for container  purchases  increased  primarily due to the  Partnership
purchasing more containers during the year ended December 31, 2000 than the same
period in 1999. The General  Partners  believe that the fluctuation in container
purchases  reflect  normal  fluctuations  in  recent  container  purchases.  The
Partnership  continued to sell  containers  in low demand  locations  (described
below  under  "Results  of  Operations");  however  there  were fewer low demand
locations  and fewer  containers  in these  locations,  primarily as a result of
previous  sales  efforts,  which  resulted  in  the  decline  in the  number  of
containers sold and consequently,  the decline in proceeds from container sales.
The sales prices  received on container sales declined  slightly.  Current sales
prices are lower than sales  prices  received in  previous  years as a result of
current  market  conditions,  which have  adversely  affected  the value of used
containers.  Until  conditions  improve  in  these  low  demand  locations,  the
Partnership plans to continue to sell some of its containers in these locations.
The amount of these  sales  proceeds  will affect how much the  Partnership  can
reinvest in new containers.

Consistent  with its  investment  objectives  and  subject  to its  distribution
policy,  the  Partnership  intends  to  continue  to  reinvest  both  cash  from
operations  available for reinvestment and all, or a significant  amount of, the
proceeds from container  sales in additional  containers.  Cash from  operations
available  for  reinvestment  is generally  equal to cash  provided by operating
activities,  less  distributions  and redemptions paid, which are subject to the
General  Partners'  authority  to set these  amounts  (and modify  reserves  and
working capital), as provided in the Partnership Agreement.  The amount of sales
proceeds  available  for  reinvestment  will  fluctuate  based on the  number of
containers sold and the sales price received.  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.

The rate of reinvestment is also affected by cash from operations  available for
reinvestment  which, like sales proceeds,  has been adversely affected by market
conditions.  These market  conditions have resulted in a slower than anticipated
rate of reinvestment.  Market conditions are discussed more fully under "Results
of Operations." A slower rate of reinvestment  will, over time,  affect the size
of the Partnership's container fleet. Furthermore,  even with reinvestment,  the
Partnership  is not likely to be able to replace  all the  containers  it sells,
since new container prices are usually higher than the average sales price for a
used container.

Results of Operations

The  Partnership's  income from operations,  which consists  primarily of rental
income, 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, 2000, 1999 and 1998, 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:

                                                    2000        1999        1998
                                                    ----        ----        ----

     Beginning container fleet...............     27,225      29,237      31,342
     Ending container fleet..................     27,152      27,225      29,237
     Average container fleet.................     27,189      28,231      30,290


The average  container  fleet  decreased 4% and 7% from the years ended December
31, 1999 to 2000 and from December 31, 1998 to 1999, respectively, primarily due
to sales of containers. Although sales proceeds were used to purchase additional
containers,  fewer  containers  were bought than sold as container  sales prices
were lower than new container prices. The Partnership's  primary source of funds
for  container  purchases  is these sales  proceeds.  Additionally,  the rate of
decline in average fleet size will  fluctuate due to timing  differences  in the
purchase and sale of containers and  fluctuations in container sale and purchase
prices during these periods.

As noted above,  when containers are sold in the future,  sales proceeds are not
likely to be sufficient to replace all of the containers sold,  resulting in the
continuing  decline in the average  container  fleet.  This trend is expected to
continue.  Other factors related to this trend are discussed above in "Liquidity
and Capital Resources".

Rental income and direct container expenses are also affected by the utilization
of the container  fleet,  which was 78%, 72% and 78% on average during the years
ended December 31, 2000, 1999 and 1998, respectively. In addition, rental income
is affected by daily rental rates,  which have decreased  between the periods as
described below.

The  following is a comparative  analysis of the results of  operations  for the
years ended December 31, 2000, 1999 and 1998.

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,  which is discussed  below,
offset by an increase in income from  container  rentals.  Income from container
rentals, the major component of total revenue,  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%.

The Partnership's income (loss) from operations for the years ended December 31,
1999 and 1998 was ($179) and $3,769,  respectively,  on rental income of $15,224
and $18,904, respectively. The decrease in rental income of $3,680, or 19%, from
the year  ended  December  31,  1998 to the year  ended  December  31,  1999 was
attributable  to decreases in container  rental income and other rental  income.
Income from container  rentals,  decreased $3,217, or 19%,  primarily due to the
decreases in the average on-hire  utilization of 8%, the average container fleet
of 7% and rental rates of 5%.

The  improvement in  utilization,  which began in the third quarter of 1999, was
due to  improvements  in demand for leased  containers and in the trade balance,
primarily  as a result of the  improvement  in  certain  Asian  economies  and a
related increase in exports out of Europe.  This improvement in demand,  coupled
with  container  lessors'  efforts  to  sell  older  containers  in  low  demand
locations, has also reduced the container surplus.

However, the trade imbalance between Asia and North America still exists, and as
a consequence,  the build-up of  containers,  primarily on the East Coast of the
United States,  persists.  The Partnership has been unable to reposition a large
number of newer  containers to higher demand  locations in Asia,  due to lack of
available vessel capacity from the United States East Coast ports.

As a result,  the Partnership  continues to sell 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 1999 and 2000 were older containers.  The
expected  economic  benefit of continuing to own these older containers was less
than that of newer  containers  primarily due to their shorter  remaining marine
life, the cost to reposition  containers and the shipping lines'  preference for
leasing newer containers when they are available.

Once the decision had been made to sell  containers,  if the book value of these
containers was greater than the estimated fair value, the Partnership wrote down
the value of these  specifically  identified  containers to their estimated fair
value, which was based on recent sales prices. Due to unanticipated  declines in
container  sales prices  during 1999,  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 demand for leased containers  improves,  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 on some or all of its container rental equipment.

The decline in the purchase price of new  containers  and the container  surplus
mentioned  above have  resulted in the decline in rental rates in recent  years.
However,  as a result of the improvement in demand and increases in the purchase
price of new containers in 2000, rental rates remained stable during 2000.

In the fourth quarter of 2000, utilization began to decline and has continued to
decline  into the  beginning  of 2001.  This  decline was  primarily  due to the
slowing United States economy and the resulting  decline in exports out of Asia.
The General Partners caution that utilization  could continue to decline in 2001
if these conditions  persist and demand for leased  containers does not improve.
Despite the decline in  utilization,  rental rates have remained stable into the
beginning of 2001.  New  container  prices  declined in 2001,  and this decline,
combined with the recent  decline in utilization  may have a negative  effect on
rental rates in the future.

Substantially  all of the  Partnership's  rental income was  generated  from the
leasing of the Partnership's containers under master operating leases.

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, 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.

For the year ended December 31, 1999, other rental income was $1,807, a decrease
of $463 from the year ended  December 31, 1998.  This decrease was primarily due
to the decrease in location income of $460.  Location income  decreased due to a
decrease in charges to lessees for dropping off containers in certain  locations
and an increase  in credits  given to lessees  for  picking up  containers  from
certain locations.

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.

Direct container  expenses  increased $486, or 12%, from the year ended December
31, 1998 to same period in 1999.  The increase was primarily due to increases in
DPP and storage  expenses of $393 and $341,  respectively,  partially  offset by
decreases in insurance and repositioning  expenses of $84 and $72, respectively.
DPP expense  increased  primarily due to an increase in the average  repair cost
per DPP container and an increase in the number of containers covered under DPP.
Storage expense increased primarily due to the decrease in average  utilization.
Insurance  expense   decreased  due  to  a  reduction  in  insurance   premiums.
Repositioning  expense  decreased due to lower average  repositioning  costs per
container,  partially  offset  by  an  increase  in  the  number  of  containers
repositioned from the year ended December 31, 1998 to the same period in 1999.

Bad debt  (benefit)  expense  was ($23),  $353 and  ($244)  for the years  ended
December 31, 2000,  1999 and 1998,  respectively.  The benefit  recorded for the
year ended December 31, 2000 was due to the overall lower  required  reserves at
December 31, 2000 than at December 31,  1999.  The effect of insurance  proceeds
received during 1998 relating to certain  receivables against which reserves had
been recorded in 1994 and 1995, as well as the resolution of payment issues with
one lessee during 1998, were primarily  responsible for the benefit  recorded in
1998 and, therefore,  the fluctuation in bad debt expense (benefit) between 1998
and 1999.

Depreciation  expense  decreased  $402,  or 7%, and $498,  or 7%, from the years
ended  December 31, 1999 to 2000 and  December  31, 1998 to 1999,  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, the cost of new containers at year-end 1998,
during 1999 and 2000 was 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, 2000,  1999 and
1998 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, 2000,
1999 and 1998 the  Partnership  recorded  write-down  expenses of $595, $733 and
$349, respectively,  on 890, 1,398 and 930 containers identified as for sale and
requiring  a  reserve.  At  December  31,  2000 and 1999,  the net book value of
containers identified as for sale was $493 and $747, respectively.

The Partnership sold 984 of these previously  written down containers for a loss
of $57 during the year ended December 31, 2000 and sold 1,998 previously written
down  containers  for a loss of $290 during the same period in 1999.  During the
year ended  December  31, 1998 there were no sales of  previously  written  down
containers  as the initial  write-down  was recorded at December  31, 1998.  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 $84,  $691 and $1,240 during the years ended  December 31, 2000,  1999
and 1998, 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.

Management  fees to affiliates  decreased  $70, or 5% and $244, or 14%, from the
years  ended  December  31,  1999  to  2000  and  December  31,  1998  to  1999,
respectively.  The  decreases  were  due to  decreases  in  both  incentive  and
equipment  management  fees.  Incentive  management fees, which are based on the
Partnership's  limited and general partner  distribution  percentage and initial
limited partners' capital, decreased due to (i) decreases in the limited partner
distribution percentage from 9.25% to 8.25% in July 1998 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, 2000, 1999 and 1998.
Equipment management fees, which are based primarily on gross revenue, decreased
due to the declines in rental income and were  approximately 7% of rental income
for the years ended December 31, 2000, 1999 and 1998.

General and administrative costs to affiliates decreased $49, or 6% and $224, or
22%,  from the years ended  December  31, 1999 to 2000 and  December 31, 1998 to
1999,  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.

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,  primarily as a result of previous  sales
efforts.

Loss on sale of containers  decreased $259 from the year ended December 31, 1998
to the year ended December 31, 1999. Although the Partnership  continued to sell
containers in low demand locations at lower average sales prices, as a result of
market conditions,  it incurred fewer losses during 1999 than 1998 primarily due
to the write-down of certain containers recorded during 1998 and 1999.

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 2000,  reflecting the
increase in net earnings  allocated to limited  partners  from a loss of $125 to
earnings of $2,620,  respectively.  Net  earnings per limited  partnership  unit
decreased from earnings of $0.61 to a loss of $0.02 from the year ended December
31, 1998 to 1999,  reflecting the decrease in net earnings  allocated to limited
partners from earnings of $3,771 to a loss of $125, respectively. The allocation
of net earnings for the years ended December 31, 2000,  1999 and 1998 included a
special allocation to the General Partners of $63, $104, and $76,  respectively,
in accordance with the Partnership Agreement.


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.  The General  Partners are not
aware of any  conditions  as of December 31, 2000,  which would result in such a
risk materializing.

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.

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 12 to 23.


<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, 2000 and
1999, the related statements of operations, partners' capital and cash flows for
each of the years in the  three-year  period  ended  December  31,  2000.  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 audits 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, 2000 and 1999,  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,  2000,  in  conformity  with  accounting  principles
generally accepted in the United States of America.



                                    KPMG LLP



San Francisco, California
February 16, 2001


<PAGE>
<TABLE>
<CAPTION>
TEXTAINER EQUIPMENT INCOME FUND III, L.P.
(a California Limited Partnership)

Balance Sheets

December 31, 2000 and 1999
(Amounts in thousands)
---------------------------------------------------------------------------------------------------------
                                                                           2000                 1999
                                                                      ---------------      --------------
<S>                                                                        <C>                  <C>
Assets
Container rental equipment, net of accumulated
   depreciation of  $42,262 (1999:  $40,469)                          $       52,490       $       56,757
Cash                                                                           2,875                3,355
Accounts receivable, net of allowance for doubtful
   accounts of $465 (1999: $756) (note 4)                                      2,993                3,857
Due from affiliates, net (note 2)                                                707                  816
Prepaid expenses                                                                  15                   18
                                                                      ---------------      --------------

                                                                      $       59,080       $       64,803
                                                                      ===============      ==============

Liabilities and Partners' Capital
Liabilities:
   Accounts payable                                                   $          492       $          432
   Accrued liabilities                                                           398                  286
   Accrued recovery costs (note 1(j))                                            193                  165
   Accrued damage protection plan costs (note 1(k))                              279                  436
   Warranty claims (note 1(l))                                                   109                  149
   Deferred quarterly distributions (note 1(g))                                   79                   81
   Container purchases payable                                                   646                  243
                                                                      ---------------      --------------

      Total liabilities                                                        2,196                1,792
                                                                      ---------------      --------------

Partners' capital:
   General partners                                                                -                    -
   Limited partners                                                           56,884               63,011
                                                                      ---------------      --------------

      Total partners' capital                                                 56,884               63,011
                                                                      ---------------      --------------


                                                                      $       59,080       $       64,803
                                                                      ===============      ==============

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, 2000,  1999 and 1998
(Amounts in thousands  except for unit and per unit amounts)
---------------------------------------------------------------------------------------------------------------

                                                               2000               1999               1998
                                                         -----------------  ----------------  -----------------
<S>                                                             <C>               <C>              <C>
Rental income                                            $         15,135   $        15,224   $         18,904
                                                         -----------------  ----------------  -----------------
Costs and expenses:
      Direct container expenses                                     3,851             4,693              4,207
      Bad debt (benefit) expense                                      (23)              353               (244)
      Depreciation                                                  5,746             6,148              6,646
      Write-down of containers (note 1(e))                            595               733                349
      Professional fees                                                62                70                 41
      Management fees to affiliates (note 2)                        1,404             1,474              1,718
      General and administrative costs
        to affiliates (note 2)                                        736               785              1,009
      Other general and administrative costs                          157               166                169
      Loss on sale of containers                                      141               981              1,240
                                                         -----------------  ----------------  -----------------

                                                                   12,669            15,403             15,135
                                                         -----------------  ----------------  -----------------

      Income (loss) from operations                                 2,466              (179)             3,769
                                                         -----------------  ----------------  -----------------

Other  income:
      Interest income                                                 244               158                117
                                                         -----------------  ----------------  -----------------

                                                                      244               158                117
                                                         -----------------  ----------------  -----------------

      Net  earnings (loss)                               $          2,710   $           (21)  $          3,886
                                                         =================  ================  =================

Allocation of net earnings (loss) (note 1(g)):
      General partners                                   $             90   $           104   $            115
      Limited partners                                              2,620              (125)             3,771
                                                         -----------------  ----------------  -----------------

                                                         $          2,710   $           (21)  $          3,886
                                                         =================  ================  =================
Limited partners' per unit share
      of net earnings (loss)                             $           0.43   $         (0.02)  $           0.61
                                                         =================  ================  =================

Limited partners' per unit share
      of distributions                                   $           1.40   $           1.61  $            1.77
                                                         =================  ================  =================

Weighted average number of limited
      partnership units outstanding (note 1(m))                 6,127,711         6,136,934          6,162,976
                                                         =================  ================  =================


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

Year ended December 31, 2000, 1999 and 1998
----------------------------------------------------------------------------------------------------
                                                               Partners' Capital
                                           ---------------------------------------------------------
                                               General               Limited               Total
                                           --------------        --------------       --------------
<S>                                               <C>                 <C>                   <C>

Balances at December 31, 1997              $          -          $     80,438         $     80,438

Distributions                                      (115)              (10,890)             (11,005)

Redemptions (note 1(n))                               -                  (153)                (153)

Net earnings                                        115                 3,771                3,886
                                           --------------        --------------       --------------

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


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

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

Net earnings (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
                                           ==============        ==============       ==============


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, 2000, 1999 and 1998
(Amounts in thousands)
------------------------------------------------------------------------------------------------------------------------------------

                                                                                     2000                1999              1998
                                                                                ---------------      -------------     -------------
<S>                                                                                  <C>                 <C>                  <C>
Cash flows from operating activities:
   Net earnings (loss)                                                          $       2,710        $       (21)       $    3,886
   Adjustments to reconcile net earnings (loss) to net cash provided
      by operating activities:
         Depreciation and container write-downs                                         6,341              6,881             6,995
         (Decrease) increase in allowance for doubtful accounts,
            excluding write-off (note 4)                                                 (291)               317              (415)
         Loss on sale of containers                                                       141                981             1,240
         Decrease (increase)  in assets:
            Accounts receivable, excluding write-off (note 4)                           1,257                145             1,041
            Due from affiliates, net                                                     (211)                31              (410)
            Prepaid expenses                                                                3                  8               146
         Increase (decrease) in liabilities:
            Accounts payable and accrued liabilities                                      172                 53                39
            Accrued recovery costs                                                         28                 49                (3)
            Accrued damage protection plan costs                                         (157)               145               (60)
            Warranty claims                                                               (40)               (39)              (40)
                                                                                ---------------      -------------     -------------

            Net cash provided by operating activities                                   9,953              8,550            12,419
                                                                                ---------------      -------------     -------------

Cash flows from investing activities:
     Proceeds from sale of containers                                                   3,030              4,947             3,329
     Container purchases                                                               (4,624)            (3,446)           (1,480)
                                                                                ---------------      -------------     -------------

            Net cash (used in) provided by investing activities                        (1,594)             1,501             1,849
                                                                                ---------------      -------------     -------------

Cash flows from financing activities:
    Redemptions of limited partnership units                                             (166)              (157)             (153)
    Distributions to partners                                                          (8,673)            (9,994)          (11,030)
                                                                                ---------------      -------------     -------------

            Net cash used in financing activities                                      (8,839)           (10,151)          (11,183)
                                                                                ---------------      -------------     -------------

Net (decrease) increase in cash                                                          (480)              (100)            3,085

Cash at beginning of period                                                             3,355              3,455               370
                                                                                ---------------      -------------     -------------

Cash at end of period                                                           $       2,875        $     3,355       $     3,455
                                                                                ===============      =============     =============

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, 2000, 1999 and 1998
(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,  2000,  1999,  1998 and 1997,
resulting in  differences  in amounts  recorded and amounts of cash disbursed or
received by the Partnership, as shown in the Statements of Cash Flows.

                                                                     2000          1999           1998           1997
                                                                     ----          ----           ----           ----
<S>                                                                   <C>            <C>           <C>             <C>
Container purchases included in:
   Due to affiliates.....................................            $  -          $  -           $ 16           $ 42
   Container purchases payable...........................             646           243             56            365

Distributions to partners included in:
   Due to affiliates.....................................               8             8              9             10
   Deferred quarterly distributions......................              79            81             97            121

Proceeds from sale of containers included in:
   Due from affiliates...................................             281           601            812            399

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 on the  Statements  of Cash Flows for the
years ended December 31, 2000, 1999 and 1998.

                                                                                   2000            1999          1998
                                                                                   ----            ----          ----

Container purchases recorded.........................................            $5,027         $3,617        $ 1,145
Container purchases paid.............................................             4,624          3,446          1,480

Distributions to partners declared...................................             8,671          9,977         11,005
Distributions to partners paid.......................................             8,673          9,994         11,030

Proceeds from sale of containers recorded............................             2,710          4,736          3,742
Proceeds from sale of containers received............................             3,030          4,947          3,329

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, 2000, 1999 and 1998 was $102, $134 and $98, 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, 2000,  1999 and 1998
(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.

      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.  Prior
      to its liquidation in October 1998, Textainer Acquisition Services Limited
      (TAS),  a former  affiliate of the General  Partners,  performed  services
      related to the  acquisition  of  containers  outside the United  States on
      behalf of the  Partnership.  Effective  November 1998,  these services are
      being  performed  by TEM.  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".  Substantially  all of the
      Partnership's  rental  income  was  generated  from  the  leasing  of  the
      Partnership's containers under short-term operating leases.

      (c)  Use of 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.  Actual  results  could  differ  from those
      estimates.

      (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,  2000  and  1999,  the  fair  value of the
      Partnership's financial instruments 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  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, the cost of new containers at year-end
      1998, during 1999 and 2000 was 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, 2000,  1999 and 1998 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,  2000,  1999 and 1998 the  Partnership  recorded  write-down
      expenses  of $595,  $733 and  $349,  respectively,  on 890,  1,398 and 930
      containers identified as for sale and requiring a reserve. At December 31,
      2000 and 1999, the net book value of containers identified as for sale was
      $493 and $747, respectively.

      The Partnership sold 984 of these previously written down containers for a
      loss $57 during the year ended December 31, 2000 and sold 1,998 previously
      written down containers for a loss of $290 during the same period in 1999.
      During the year ended  December 31, 1998 there were no sales of previously
      written down containers as the initial write-down was recorded at December
      31, 1998. 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 $84, $691 and $1,240  during the years ended  December
      31, 2000, 1999 and 1998, respectively.

      If 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
      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.

      (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, 2000, 1999 and 1998.

      (g)  Allocation of Net Earnings 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 $79
      and $81 at December 31, 2000 and 1999, 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 TAS through October 1998 and
      to TEM beginning in November 1998.  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, 2000 and 1999, the amounts
      accrued were $193 and $165, 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, 2000
      and 1999, was $279 and $436, 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,  2000 and 1999,  the  unamortized
      portion of the settlement amount was equal to $109 and $149, 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, 2000, 1999 and 1998, which
      were 6,127,711, 6,136,934, and 6,162,976, respectively.

      (n)  Redemptions

      The following  redemption  offerings were  consummated by the  Partnership
      during the years ended December 31, 2000, 1999 and 1998:
<TABLE>
<CAPTION>

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

      Total Partnership redemptions as of
        December 31, 1997....................            81,473                $ 14.69                   $1,197
                                                        -------                                          ------

      Year ended December 31, 1998:
            3rd quarter......................             7,538                $ 10.61                       80
            4th quarter......................             7,129                $ 10.24                       73
                                                        -------                                          ------
                                                         14,667                $ 10.43                      153
                                                        -------                                          ------

      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
                                                        -------                                          ------

      Total Partnership redemptions as of
        December 31, 2000....................           135,538                $ 12.34                   $1,673
                                                        =======                                          ======

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

      (o) Reclassification

      Following  the  adoption of SAB 101,  "Revenue  Recognition  in  Financial
      Statements",  by the Partnership in the fourth quarter of fiscal 2000, the
      Partnership  has  reclassified  gain/loss on sale of containers from other
      income (after income from operations) to costs and expenses (before income
      from   operations).   All  periods  have  been  amended  to  reflect  this
      reclassification.


Note 2.  Transactions with Affiliates

      As part of the operation of the Partnership,  the Partnership is to pay to
      the General Partners, or TAS prior to its liquidation, 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 $239, $172, and $55 of container acquisition fees
      as part of  container  rental  equipment  costs  during  the  years  ended
      December 31, 2000, 1999 and 1998,  respectively.  The Partnership incurred
      $361, $410, and $454 of incentive management fees during each of the three
      years ended December 31, 2000, 1999 and 1998,  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, 2000 and 1999.

      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 full  payout net
      leases.  For the years ended December 31, 2000,  1999 and 1998,  equipment
      management  fees totaled $1,043,  $1,064,  and $1,264,  respectively.  The
      Partnership's  containers  are  leased by TEM to third  party  lessees  on
      operating  master  leases,  spot  leases,  term leases and full payout net
      leases. Although the Partnership has some rent receivable under cancelable
      long term operating leases,  the majority of the Partnership's  leases are
      operating leases with limited terms and no purchase option.

      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:

                                                  2000         1999         1998
                                                  ----         ----         ----

           Salaries                              $ 380        $ 437       $  547
           Other                                   356          348          462
                                                   ---          ---        -----
            Total general and
              administrative costs               $ 736        $ 785       $1,009
                                                   ===          ===        =====

      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:

                                                 2000         1999          1998
                                                 ----         ----          ----

           TEM                                   $641         $701        $  914
           TFS                                     95           84            95
                                                  ---          ---         -----
            Total general and
              administrative costs               $736         $785        $1,009
                                                  ===          ===         =====

      The General Partners,  or TAS through October 1998, 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.
      In addition,  the General Partners and, prior to its liquidation,  TAS are
      entitled  to  an  acquisition  fee  for  any  containers   resold  to  the
      Partnership.

      At December 31, 2000 and 1999, due from affiliates, net, is comprised of:

                                                             2000           1999
                                                             ----           ----
            Due from affiliates:
              Due from TEM...........................        $755           $864
                                                              ---            ---

            Due to affiliates:
              Due to TFS.............................          36             34
              Due to TCC.............................          11             13
              Due to TL..............................           1              1
                                                              ---            ---
                                                               48             48
                                                              ---            ---

                   Due from affiliates, net                  $707           $816
                                                              ===            ===

      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 payment of expenses
      and fees  described  above or in the accrual and  remittance of net rental
      revenues and sales proceeds from TEM.

Note 3.   Income Taxes

      At December 31, 2000, 1999 and 1998,  there were temporary  differences of
      $40,837,  $44,758,  and  $53,142,  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 for financial  statement  purposes to net income for federal income
      tax  purposes for the years ended  December 31, 2000,  1999 and 1998 is as
      follows:
<TABLE>
<CAPTION>

                                                                              2000               1999             1998
                                                                              ----               ----             ----
<S>                                                                            <C>                <C>              <C>

      Net income (loss) per financial statements...............             $ 2,710            $   (21)          $ 3,886

      (Decrease) increase in provision for bad debt............                (291)               317            (1,095)
      Depreciation for federal income tax purposes
        less than (in excess of) depreciation for
        financial statement purposes...........................               1,571              2,373             (782)
      Gain on sale of fixed assets for federal income
        tax purposes in excess of gain/loss recognized
        for financial statement purposes.......................               2,839              5,588             4,962
      (Decrease) increase in damage protection plan costs......                (157)               145               (60)
      Warranty reserve income for tax purposes in excess
        of financial statement purposes........................                 (40)               (39)              (40)
                                                                             ------             ------            ------

      Net income for federal income tax purposes...............             $ 6,632            $ 8,363           $ 6,871
                                                                             ======             ======            ======
</TABLE>

Note 4.   Accounts Receivable Write-Off

      During 1998, the Partnership wrote-off $680 of delinquent receivables from
      two lessees against which reserves were recorded in 1994 and 1995.  During
      the  years  ended  December  31,  2000  and  1999,   there  were  no  such
      individually significant write-offs.

<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, 2000, 1999 and 1998:

                                                                              (Amounts in thousands)
                                                                                2000 Quarters Ended
                                                           ------------------------------------------------------------
                                                             Mar. 31          June 30        Sept. 30         Dec. 31
                                                           ------------------------------------------------------------
<S>                                                              <C>            <C>              <C>             <C>
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

Income (loss) 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

                                                                                 1998 Quarters Ended
                                                           ------------------------------------------------------------
                                                             Mar. 31          June 30        Sept. 30         Dec. 31
                                                           ------------------------------------------------------------

Rental income                                                  $ 4,845         $ 4,724         $ 4,712         $4,623

Income from operations                                         $ 1,473         $ 1,183         $ 1,039         $   74

Net earnings                                                   $ 1,488         $ 1,211         $ 1,074         $  113

Limited partners' share of net earnings                        $ 1,458         $ 1,181         $ 1,046         $   86

Limited partners' share of distributions                       $ 2,852         $ 2,854         $ 2,645         $2,539

The amounts of income from operations are different from the amounts  previously
reported in reports on Form 10-Q filed for the years 2000,  1999 and 1998 as the
Registrant adopted SAB 101, "Revenue  Recognition in Financial  Statements",  in
the  fourth  quarter  of  fiscal  2000  and  reclassified  gain/loss  on sale of
containers  from  other  income  (after  income  from  operations)  to costs and
expenses  (before  income from  operations).  To conform to the  current  year's
presentation,   the  following   reclassifications  were  made  to  income  from
operations:

                                                             Mar. 31          June 30        Sept. 30         Dec. 31
                                                           ------------------------------------------------------------

                                                  2000         $  (131)        $    73         $   (57)        $  (26)
                                                  1999         $  (257)        $  (480)        $  (160)        $  (84)
                                                  1998         $    42         $  (159)        $  (254)        $ (869)
</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 or substantially-owned subsidiaries of
TGH.  The  General  Partners  also  act  in  this  capacity  for  other  limited
partnerships.  Prior to its liquidation in October 1998,  Textainer  Acquisition
Services  Limited  (TAS) was an affiliate of the General  Partners and performed
services  related to the  acquisition of equipment  outside the United States on
behalf of the Partnership. Effective November 1998, these services are performed
by TEM.

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, 2000,  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.

The directors and executive officers of the General Partners are as follows:
<TABLE>
<CAPTION>

Name                             Age     Position
----                             ---     --------
<S>                              <C>     <C>

Neil I. Jowell                   67      Director and Chairman of TGH, TEM, TL, TCC and TFS
John A. Maccarone                56      President, CEO and Director of TGH, TEM, TL, TCC and TFS
James E. Hoelter                 61      Director of TGH, TEM, TL, TCC and TFS
Alex M. Brown                    62      Director of TGH, TEM, TL, TCC and TFS
Harold J. Samson                 79      Director of TGH and TL
Philip K. Brewer                 44      Senior Vice President - Asset Management Group and Director of TEM and TL
Robert D. Pedersen               41      Senior Vice President - Leasing Group, Director of TEM
Ernest J. Furtado                45      Senior Vice  President , CFO and  Secretary  of TGH,  TEM,  TL, TCC and TFS,
                                         Director of TEM, TCC and TFS
Wolfgang Geyer                   47      Regional Vice President - Europe
Mak Wing Sing                    43      Regional Vice President - South Asia
Masanori Sagara                  45      Regional Vice President - North Asia
Stefan Mackula                   48      Vice President -  Equipment Resale
Anthony C. Sowry                 48      Vice President - Corporate Operations and Acquisitions
Richard G. Murphy                48      Vice President - Risk Management
Janet S. Ruggero                 52      Vice President - Administration and Marketing Services
Jens W. Palludan                 50      Regional Vice President - Americas and Logistics
Isam K. Kabbani                  66      Director of TGH and TL
James A. C. Owens                61      Director of TGH and TL
S. Arthur Morris                 67      Director of TGH, TEM and TL
Dudley R. Cottingham             49      Assistant Secretary, Vice President and Director of TGH, TEM and TL
Nadine Forsman                   33      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),  which is publicly traded and listed
on the  Johannesburg  Stock  Exchange.  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 a
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.

     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 and Robert D. Pedersen.

     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, 2001:

                                                       Number
              Name of Beneficial Owner                Of Units       % All Units
              ------------------------                --------       -----------
              James E. Hoelter................           2,500          0.0409%
              John A. Maccarone...............           2,520          0.0412%
              Harold Samson...................           2,500          0.0409%
              Anthony C. Sowry................             274          0.0045%
                                                         -----          -------

              Officers and Management
               as a Group.....................           7,794          0.1275%
                                                         =====          =======

(c)      Changes in control.

         Inapplicable.
<PAGE>

ITEM 13.         CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                             (Amounts in thousands)

(a)      Transactions with Management and Others.

         At December 31, 2000 and 1999, due from  affiliates,  net, is comprised
         of:

                                                          2000             1999
                                                          ----             ----
            Due from affiliates:
             Due from TEM...........................     $ 755            $ 864
                                                           ---              ---

            Due to affiliates:
             Due to TFS.............................        36               34
             Due to TCC.............................        11               13
             Due to TL..............................         1                1
                                                           ---              ---
                                                            48               48
                                                           ---              ---

                Due from affiliates, net                 $ 707            $ 816
                                                           ===              ===

         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 payment
         of expenses and fees  described  above 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 and TAS:

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

                                        2000              1999              1998
                                        ----              ----              ----

            TAS....................    $   -            $    -             $  39
            TEM....................      239               172                16
                                         ---               ---                --

            Total..................    $ 239            $  172             $  55
                                         ===               ===                ==

         Management fees in connection with the operations of the Registrant:

                                        2000              1999              1998
                                        ----              ----              ----

            TEM....................   $1,122            $1,154            $1,364
            TFS....................      282               320               354
                                       -----             -----             -----

            Total..................   $1,404            $1,474            $1,718
                                       =====             =====             =====

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

                                        2000              1999              1998
                                        ----              ----              ----

            TEM....................    $ 641             $ 701            $  914
            TFS....................       95                84                95
                                         ---               ---             -----

            Total..................    $ 736             $ 785            $1,009
                                         ===               ===             =====

(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,  2000  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 2000, 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  16,  2001,  we  reported  on the  balance  sheets of
Textainer  Equipment Income Fund III, L.P. (the  Partnership) as of December 31,
2000 and 1999, and the related  statements of operations  partners'  capital and
cash flows for each of the years in the  three-year  period  ended  December 31,
2000,  which are included in the 2000 annual  report on Form 10-K. In connection
with our audits 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.



                                    KPMG LLP



San Francisco, California
February 16, 2001


<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, 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
                                           -------         -------        -------      --------       -------



For the year ended December 31, 1998:

Allowance for
  doubtful accounts                       $  1,534        $  (244)       $  (680)     $   (171)      $    439
                                           -------         -------        -------      --------       -------

Recovery cost reserve                     $    119        $   232        $     -      $   (235)      $    116
                                           -------         -------        -------      --------       -------


Damage protection
  plan reserve                            $    351        $   299        $     -      $   (359)      $    291
                                           -------         -------        -------      --------       -------

</TABLE>

<PAGE>


                                   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

<TABLE>
<CAPTION>

Date:  March 20, 2001

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>

_________________________________                  Senior Vice President, CFO                   March 20, 2001
Ernest J. Furtado                                  (Principal Financial and
                                                   Accounting Officer),
                                                   Secretary and Director


_________________________________                  President (Principal Executive               March 20, 2001
John A. Maccarone                                  Officer), and Director



_________________________________                  Chairman of the Board and Director           March 20, 2001
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 20, 2001

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 20, 2001
Ernest J. Furtado                                  (Principal Financial and
                                                   Accounting Officer),
                                                   Secretary and Director


/s/John A. Maccarone
___________________________________                President (Principal Executive               March 20, 2001
John A. Maccarone                                  Officer), and Director


/s/Neil I. Jowell                                                                               March 20, 2001
___________________________________                Chairman of the Board and Director
Neil I. Jowell
</TABLE>