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, 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 June 30, 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 (5,841,637) (5,702,818)
5,436,412 5,575,231
Cash and cash equivalents 509,065 502,341
Rent receivable 80,785 50,447
Due from affiliates 12,854 13,054
Due from Burger King Corporation --- 50,977
Total Assets $ 6,039,116 $ 6,192,050
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 23,127 $ 40,838
Distributions payable 410,820 404,096
Total liabilities 433,947 444,934
Partners' Capital (Deficit):
General Partner (22,785) (22,629)
Limited Partners (15,000 interests outstanding) 5,627,954 5,769,745
Total Partners' capital 5,605,169 5,747,116
Total Liabilities and Partners' Capital $ 6,039,116 $ 6,192,050
Statement of Partners' Capital (Deficit)
For the six months ended June 30, 1996
Limited General
Partners Partner Total
Balance at December 31, 1995 $5,769,745 $(22,629) $5,747,116
Net income 671,469 42,647 714,116
Distributions to Partners (813,260) (42,803) (856,063)
Balance at June 30, 1996 $5,627,954 $(22,785) $5,605,169
Statements of Operations
Three months Six months
ended June 30, ended June 30,
1996 1995 1996 1995
Income
Rental income $614,464 $561,403 $1,144,763 $1,067,436
Interest income 4,101 4,494 10,268 11,497
Other income 860 540 1,315 1,020
Total income 619,425 566,437 1,156,346 1,079,953
Expenses
Depreciation 69,409 69,409 138,819 138,819
Ground lease rent 72,843 69,600 145,686 138,816
Management fee 68,039 58,075 119,245 105,153
General and administrative 21,514 37,176 38,480 52,223
Total expenses 231,805 234,260 442,230 435,011
Net Income $387,620 $332,177 $714,116 $644,942
Net Income Allocated:
To the General Partner $ 22,852 $ 20,079 $ 42,647 $ 39,188
To the Limited Partners 364,768 312,098 671,469 605,754
$387,620 $332,177 $714,116 $644,942
Per limited partnership interest
(15,000 outstanding) $24.31 $20.81 $44.76 $40.38
Statements of Cash Flows
For the six months ended June 30, 1996 1995
Cash Flows From Operating Activities
Net income $714,116 $644,942
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 (30,338) (4,232)
Due from affiliates 200 (50)
Due from Burger King Corporation 50,977 128,924
Accounts payable and accrued expenses (17,711) (18,414)
Net cash provided by operating activities 856,063 889,989
Cash Flows From Financing Activities
Cash distributions to partners (849,339) (912,895)
Net cash used for financing activities (849,339) (912,895)
Net increase (decrease) in cash 6,724 (22,906)
Cash and cash equivalents, beginning of period 502,341 500,420
Cash and cash equivalents, end of period $509,065 $477,514
Notes to the Financial Statements
The unaudited financial statements should be read in conjunction with Burger
King Limited Partnership III's (the "Partnership") 1995 annual 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, 1996, the results of operations for the three- and six-
month periods ended June 30, 1996 and 1995, the statement of partners' capital
(deficit) for the six-month period ended June 30, 1996 and the statements of
cash flows for the six-month periods ended June 30, 1996 and 1995. Results of
operations for the three- and six-month periods ended June 30, 1996 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 June 30, 1996, the Partnership's cash balance
was $509,065, largely unchanged from $502,341 at December 31, 1995. At June
30, 1996, the Partnership had distributions payable of $410,820, which were
subsequently distributed to the partners on July 30, 1996. As of June 30,
1996, the Partnership owned 24 restaurant properties (hereinafter referred to
individually as a "Property" and, collectively, as the "Properties").
Rent receivable totaled $80,785 at June 30, 1996, compared to $50,447 at
December 31, 1995. The increase is primarily attributable to an increase in
percentage rent as a result of an increase in overall sales at the Properties
in the second quarter of 1996.
Due from Burger King Corporation ("BKC") decreased from $50,977 at December 31,
1995 to $0 at June 30, 1996. The decrease is attributable to payments received
from BKC during the first quarter of 1996 as a refund of a portion of the
management fees paid by the Partnership during 1995. In accordance with the
terms of the management agreement between BKC and the Partnership, BKC is
required to refund 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, as defined in the management
agreement.
Accounts payable and accrued expenses decreased from $40,838 at December 31,
1995 to $23,127 at June 30, 1996. The decrease is primarily attributable to
the payment of the Partnership's 1995 audit and tax fees.
The General Partner continues to evaluate 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- and six-month periods ended
June 30, 1996 of $387,620 and $714,116, respectively, compared to $332,177 and
$644,942 for the corresponding periods in 1995. The increase in net income for
both periods is primarily attributable to an increase in rental income and, to
a lesser extent, a decrease in general and administrative expenses, which were
partially offset by increases in ground lease rents and management fees paid to
BKC.
Rental income for the three- and six-month periods ended June 30, 1996 was
$614,464 and $1,144,763, respectively, compared to $561,403 and $1,067,436 for
the corresponding periods in 1995. The increases in rental income are primarily
attributable to an overall increase in food and beverage sales at the
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 periods due to the increase in percentage rental income.
General and administrative expenses totaled $21,514 and $38,480 for the three-
and six-month periods ended June 30, 1996, compared to $37,176 and $52,223 for
the corresponding periods in 1995. The decreases for both periods are
primarily attributable to a decrease in environmental consultation fees
incurred by the Partnership during the first six months of 1996.
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 - No reports on 8-K were filed during
the quarter ended June 30, 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: August 13, 1996 BY: /s/ Rocco F. Andriola
Name: Rocco F. Andriola
President, Director and
Chief Financial Officer
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<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> Jun-30-1996
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