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 March 31, 1996
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 I.R.S. Employer
of Incorporation or Organization Identification No.
3 World Financial Center, 29th Floor,
New York, NY Attn: Andre Anderson 10285-2900
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
At March 31, At December 31,
1996 1995
Assets
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 (5,772,228) (5,702,818)
5,505,821 5,575,231
Cash and cash equivalents 543,488 502,341
Rent and other receivables 43,509 50,447
Due from affiliates 13,194 13,054
Due from Burger King Corporation --- 50,977
Total Assets $ 6,106,012 $ 6,192,050
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 32,400 $ 40,838
Distributions payable 445,243 404,096
Total Liabilities 477,643 444,934
Partners' Capital (Deficit):
General Partner (25,096) (22,629)
Limited Partners (15,000
interests outstanding) 5,653,465 5,769,745
Total Partners' Capital 5,628,369 5,747,116
Total Liabilities and Partners' Capital $ 6,106,012 $ 6,192,050
Statement of Partners' Capital (Deficit)
For the three months ended March 31, 1996
Limited General
Partners Partner Total
Balance at December 31, 1995 $ 5,769,745 $ (22,629) $ 5,747,116
Net income 306,701 19,795 326,496
Distributions to Partners (422,981) (22,262) (445,243)
Balance at March 31, 1996 $ 5,653,465 $ (25,096) $ 5,628,369
Statements of Operations
For the three months ended March 31, 1996 1995
Income
Rental income $ 530,299 $ 506,033
Interest income 6,167 7,003
Miscellaneous income 455 480
Total Income 536,921 513,516
Expenses
Depreciation $ 69,410 $ 69,410
Ground lease rent 72,843 69,216
Management fee 51,206 47,078
General and administrative 16,966 15,047
Total Expenses 210,425 200,751
Net Income $ 326,496 $ 312,765
Net Income Allocated:
To the General Partner $ 19,795 $ 19,109
To the Limited Partners 306,701 293,656
$ 326,496 $ 312,765
Per limited partnership interest
(15,000 outstanding) $20.45 $19.58
Statements of Cash Flows
For the three months ended March 31, 1996 1995
Cash Flows From Operating Activities
Net income $ 326,496 $ 312,765
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation 69,410 69,410
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Rent and other receivables 6,938 13,306
Due from affiliates (140) 369
Due from Burger King Corporation 50,977 128,924
Accounts payable and accrued expenses (8,438) (12,284)
Net cash provided by operating activities 445,243 512,490
Cash Flows From Financing Activities
Cash distributions to partners (404,096) (409,352)
Net cash used for financing activities (404,096) (409,352)
Net increase in cash and cash equivalents 41,147 103,138
Cash and cash equivalents, beginning of period 502,341 500,420
Cash and cash equivalents, end of period $ 543,488 $ 603,558
Notes to the Financial Statements
Burger King Limited Partnership III's (the "Partnership") unaudited financial
statements for the quarter ended March 31, 1996 should be read in conjunction
with the Partnership's 1995 annual audited financial statements within Form
10-K.
The Partnership's unaudited financial statements include all adjustments which
are, in the opinion of management, necessary to present a fair statement of
financial position as of March 31, 1996 and the results of operations and cash
flows for the three months ended March 31, 1996 and 1995 and the statement of
partners' capital (deficit) for the three months ended March 31, 1996. 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 1995, which
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 March 31, 1996, the Partnership's cash balance
was $543,488, compared to $502,341 at December 31, 1995. The increase in cash
is primarily due to cash flow from operations in excess of cash distributions
paid for the first quarter of 1996. At March 31, 1996, the Partnership had
distributions payable of $445,243, which were subsequently distributed to the
partners on April 30, 1996. As of March 31, 1996, the Partnership owned 24
restaurant properties (hereinafter referred to individually as a "Property"
and, collectively, as the "Properties").
Rent and other receivables totalled $43,509 at March 31, 1996, compared to
$50,447 at December 31, 1995. The decrease is primarily attributable to a
decrease in percentage rent as a result of a decrease in sales at the
Properties in the first quarter of 1996 as compared to the fourth quarter of
1995.
Due from Burger King Corporation ("BKC") decreased from $50,977 at December 31,
1995 to $0 at March 31, 1996. The decrease is attributable to payments
received from BKC during the first quarter of 1996 as a refund of a portion of
the Partnership's 1995 annual management fees. 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.
Accounts payable and accrued expenses decreased from $40,838 at December 31,
1995 to $32,400 at March 31, 1996. The decrease is primarily attributable to
the payment of audit and tax fees.
The Partnership is currently evaluating market conditions to determine when the
Partnership's remaining 24 Properties should be marketed for sale. Until all
of the Properties are sold, the Partnership intends to continue operating the
Properties and distributing cash flow from operations to the partners in
accordance with the terms of the Partnership Agreement.
Results of Operations
The Partnership generated net income for the three months ended March 31, 1996
of $326,496, compared to $312,765 for the corresponding period in 1995. The
increase in net income is primarily attributable to an increase in rental
income, which was partially offset by increases in ground lease rents and
management fees paid to BKC.
Rental income for the three months ended March 31, 1996 was $530,299, compared
to $506,033 for the corresponding period in 1995. The increase in rental
income is primarily attributable to an increase in food and beverage sales at
certain Properties which resulted in an increase in percentage rental income
and, to a lesser extent, scheduled rent escalations in the leasehold
Properties. Ground lease rent escalations received from the franchisees are
offset by higher ground lease rents paid by the Partnership to BKC. Management
fees, which are based on the amount of rental income received by the
Partnership, were higher in the 1996 period due to the increase in percentage
rental income.
Part II Other Information
Items 1-5 Not applicable.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits -
(27) Financial Data Schedule
(b) Reports on Form 8-K -
On February 15, 1996, based upon, among other things, the advice
of Partnership's counsel, Skadden, Arps, Slate, Meagher & Flom,
the General Partner adopted a resolution that states, among
other things, if a Change of Control (as defined below) occurs,
the General Partner may distribute the Partnership's cash
balances not required for its ordinary course day-to-day
operations. "Change of Control" means any purchase or offer to
purchase more than 10% of the Units that is not approved in
advance by the General Partner. In determining the amount of
the distribution, the General Partner may take into account all
material factors. In addition, the Partnership will not be
obligated to make any distribution to any partner, and no
partner will be entitled to receive any distribution, until the
General Partner has declared the distribution and established a
record date and distribution date. The Partnership filed a Form
8-K disclosing this resolution on February 29, 1996.
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: May 13, 1996 BY: /s/ Rocco F. Andriola
Name: Rocco F. Andriola
Title: President, Director and
Chief Financial Officer
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<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> Mar-31-1996
<CASH> 543,488
<SECURITIES> 0
<RECEIVABLES> 56,703
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<DEPRECIATION> 5,772,228
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