UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 2-88051
BURGER KING LIMITED PARTNERSHIP III
(Exact name of registrant as specified in its charter)
New York 13-3178415
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) identification No.)
Attention: Andre Anderson
3 World Financial Center, 29th Floor, New York, NY 10285
(Address of principal executive offices) (Zip code)
(212) 526-3237
(Registrant's telephone number, including area code)
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. Yes X No
Balance Sheets
June 30, December 31,
Assets 1995 1994
Real estate at cost:
Land $ 2,981,088 $ 2,981,088
Buildings 5,552,773 5,552,773
Fixtures and equipment 2,744,188 2,744,188
11,278,049 11,278,049
Less accumulated depreciation (5,563,998) (5,425,179)
5,714,051 5,852,870
Cash 477,514 500,420
Rent receivable 38,470 34,238
Due from affiliates 12,939 12,889
Due from Burger King Corporation 48,039 176,963
Total Assets $ 6,291,013 $ 6,577,380
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 22,746 $ 41,160
Distributions payable 377,513 400,420
Total Liabilities 400,259 441,580
Partners' Capital (Deficit):
General Partner (22,387) (17,076)
Limited Partners 5,913,141 6,152,876
Total Partners' Capital 5,890,754 6,135,800
Total Liabilities and Partners' Capital $ 6,291,013 $ 6,577,380
Statement of Partners' Capital (Deficit)
For the six months ended June 30, 1995
Limited General
Partners Partner Total
Balance at December 31, 1994 $6,152,876 $(17,076) $6,135,800
Net income 605,754 39,188 644,942
Distributions (845,489) (44,499) (889,988)
Balance at June 30, 1995 $5,913,141 $(22,387) $5,890,754
Statements of Operations
Three months ended Six months ended
June 30, June 30,
Income 1995 1994 1995 1994
Rental income $561,403 $509,073 $1,067,436 $ 996,955
Interest income 4,494 4,215 11,497 7,473
Other income 540 1,441 1,020 2,656
Total Income 566,437 514,729 1,079,953 1,007,084
Expenses
Depreciation 69,409 69,409 138,819 138,819
Ground lease rent 69,600 64,396 138,816 128,792
Management fee 58,075 48,650 105,153 95,340
General and administrative 37,176 14,810 52,223 34,042
Total Expenses 234,260 197,265 435,011 396,993
Net Income $332,177 $317,464 $ 644,942 $ 610,091
Net Income Allocated:
To the General Partner $ 20,079 $ 19,344 $ 39,188 $ 37,446
To the Limited Partners 312,098 298,120 605,754 572,645
$332,177 $317,464 $ 644,942 $ 610,091
Per limited partnership
interest (15,000 outstanding) $20.81 $19.87 $40.38 $38.18
Statements of Cash Flows
For the six months ended June 30, 1995 and 1994
Cash Flows from Operating Activities: 1995 1994
Net income $ 644,942 $ 610,091
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 138,819 138,819
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Rent receivable (4,232) (15,348)
Due from affiliates (50) (359)
Due from Burger King Corporation 128,924 173,860
Accounts payable and accrued expenses (18,414) (16,154)
Net cash provided by operating activities 889,989 890,909
Cash Flows from Financing Activities:
Cash distributions paid (912,895) (889,861)
Net cash used for financing activities (912,895) (889,861)
Net increase (decrease) in cash (22,906) 1,048
Cash at beginning of period 500,420 470,856
Cash at end of period $ 477,514 $ 471,904
Notes to the Financial Statements
The unaudited interim financial statements should be read in conjunction with
Burger King Limited Partnership III's (the "Partnership") annual 1994 audited
financial statements within Form 10-K.
The unaudited financial statements include all adjustments which are, in the
opinion of management, necessary to present a fair statement of financial
position as of June 30, 1995 and the results of operations for the three and
six months ended June 30, 1995 and 1994, the statement of changes in partners'
capital (deficit) for the six months ended June 30, 1995 and the statements of
cash flows for the six months ended June 30, 1995 and 1994. Results of
operations for the period are not necessarily indicative of the results to be
expected for the full year.
No significant events have occurred subsequent to fiscal year 1994, and no
material contingencies exist which would require disclosure in this interim
report per Regulation S-X, Rule 10-01, Paragraph (a)(5).
Part I, Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
The Partnership's cash balance consists of working capital and undistributed
cash flow from operations. At June 30, 1995, the cash balance was $477,514,
compared to $500,420 at December 31, 1994. The decrease in cash is primarily
due to the payment of cash distributions in excess of cash flow generated from
operations. Cash flow generated from operations is distributed quarterly to
the partners. At June 30, 1995, the Partnership had distributions payable of
$377,513, which were subsequently distributed to the partners on August 1,
1995.
Due from Burger King Corporation ("BKC") decreased from $176,963 at December
31, 1994 to $48,039 at June 30, 1995. The decrease is primarily attributable
to payments made by BKC as a refund of a portion of the annual management fees
paid by the Partnership to BKC. In accordance with the terms of the management
agreement between BKC and the Partnership, BKC is required to return all or a
portion of the annual management fee paid by the Partnership if rents from the
properties do not provide an annual return of 15.5% on the Partnership's
initial investment. During the year ended December 31, 1994, management fees
paid to BKC totalled $198,427, and the Partnership received a refund from BKC
of $128,924.
Accounts payable and accrued expenses decreased from $41,160 at December 31,
1994 to $22,746 at June 30, 1995. The decrease is primarily attributable to
the timing of the payment of audit and tax fees.
The Partnership is currently evaluating market conditions to determine if the
Partnership's remaining 24 properties should be marketed for sale. Until the
Partnership's remaining properties are sold, the Partnership will continue to
operate, and it is intended that net income earned by the Partnership will be
distributed to the partners in accordance with the terms of the Partnership
Agreement.
Results of Operations
The Partnership generated net income for the three and six months ended June
30, 1995 of $332,177 and $644,942, respectively, compared to $317,464 and
$610,091, respectively, for the corresponding periods in 1994. The increases in
net income are primarily attributable to an increase in rental income,
partially offset by increases in general and administrative expenses, ground
lease rents and management fees paid to BKC.
Rental income for the three and six months ended June 30, 1995 was $561,403 and
$1,067,436, respectively, compared to $509,073 and $996,955, respectively, for
the corresponding periods in 1994. The increase in rental income is a result
of an increase in sales at the properties which resulted in an increase in
percentage rental income.
Ground lease rent for the three and six months ended June 30, 1995 increased to
$69,600 and $138,816, respectively, compared to $64,396 and $128,792,
respectively, for the corresponding periods in 1994. The increases are
attributable to scheduled rent escalations in the Partnership's ground leases.
Increases in ground rents are passed on to the franchisees in the form of
increased rents paid to the Partnership.
Management fees for the three and six months ended June 30, 1995 were $58,075
and $105,153, respectively, as compared to $48,650 and $95,340, respectively,
for the corresponding periods in 1994. The increase is attributable to an
increase in percentage rent during the second quarter of 1995. Management fees
paid by the Partnership to BKC are equal to 10% of all base rents and 20% of
all percentage rents received from the properties.
General and administrative expenses for the three and six months ended June 30,
1995 totalled $37,176 and $52,223, respectively, compared to $14,810 and
$34,042, respectively, for the corresponding periods in 1994. The increase in
both periods is primarily attributable to environmental consulting costs
incurred during the second quarter of 1995.
PART II OTHER INFORMATION
Items 1-5 Not applicable
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits - None
(b) Reports on Form 8-K - No reports on Form 8-K were
filed during the quarter ended June 30, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BURGER KING LIMITED PARTNERSHIP III
BY: BK III RESTAURANTS INC.
General Partner
Date: August 11, 1995
BY: /s/Rocco Andriola
Name: Rocco Andriola
Title: Director, President and
Chief Financial Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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