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, 1997
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 Incorporation or Organization I.R.S. Employer 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,
1997 1996
Assets
Real estate held for sale $4,876,584 $5,175,404
Cash and cash equivalents 1,355,764 1,022,064
Rent and other receivable 113,826 80,880
Due from affiliates 14,239 14,239
Other assets 3,989 --
Total Assets $6,364,402 $6,292,587
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 56,569 $ 44,811
Due to Burger King Corporation 6,178 --
Distributions payable 1,238,117 918,562
Total Liabilities 1,300,864 963,373
Partners' Capital (Deficit):
General Partner (26,102) (24,770)
Limited Partners (15,000 interests outstanding) 5,089,640 5,353,984
Total Partners' Capital 5,063,538 5,329,214
Total Liabilities and Partners' Capital $6,364,402 $6,292,587
Statement of Partners' Capital (Deficit)
For the six months ended June 30, 1997
General Limited
Partner Partners Total
Balance at December 31, 1996 $(24,770) $5,353,984 $5,329,214
Net income 47,004 1,340,699 1,387,703
Distributions to partners (48,336) (1,605,043) (1,653,379)
Balance at June 30, 1997 $(26,102) $5,089,640 $5,063,538
Statements of Operations
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
Income
Rental income $ 600,900 $614,464 $1,111,216 $1,144,763
Interest income 8,207 4,101 17,814 10,268
Other income 984 860 4,069 1,315
Total income 610,091 619,425 1,133,099 1,156,346
Expenses
Ground lease rent 62,731 72,843 125,463 145,686
Management fee 68,904 68,039 119,545 119,245
Depreciation -- 69,409 -- 138,819
General and administrative 22,119 21,514 59,907 38,480
Total expenses 153,754 231,805 304,915 442,230
Income from operations $ 456,337 $387,620 $ 828,184 $ 714,116
Other Income
Gain on sale of property 559,519 -- 559,519 --
Net Income $1,015,856 $387,620 $1,387,703 $ 714,116
Net Income Allocated:
To the General Partner $ 28,412 $ 22,852 $ 47,004 $ 42,647
To the Limited Partners 987,444 364,768 1,340,699 671,469
$1,015,856 $387,620 $1,387,703 $ 714,116
Per limited partnership interest
(15,000 outstanding) $65.83 $24.31 $89.38 $44.76
Statements of Cash Flows
For the six months ended June 30, 1997 1996
Cash Flows From Operating Activities
Net income $1,387,703 $714,116
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation -- 138,819
Gain on sale of property (559,519) --
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Rent and other receivable (32,946) (30,338)
Accounts payable and accrued expenses 11,758 (17,511)
Due to Burger King Corporation 6,178 --
Due from Burger King Corporation -- 50,977
Other asset (3,989) --
Net cash provided by operating activities 809,185 856,063
Cash Flows From Investing Activities
Net proceeds from sale of property 858,339 --
Net cash provided by investing activities 858,339 --
Cash Flows From Financing Activities
Cash distributions to partners (1,333,824) (849,339)
Net cash used for financing activities (1,333,824) (849,339)
Net increase in cash and cash equivalents 333,700 6,724
Cash and cash equivalents, beginning of period 1,022,064 502,341
Cash and cash equivalents, end of period $1,355,764 $509,065
Notes to the Financial Statements
The unaudited financial statements should be read in conjunction
with Burger King Limited Partnership III's (the "Partnership")
annual 1996 audited financial statements within Form 10-K.
The unaudited financial statements include all normal and
recurring adjustments which are, in the opinion of management,
necessary to present a fair statement of financial position as of
June 30, 1997 and the results of operations for the three- and
six- month periods ended June 30, 1997 and 1996 and cash flows
for the six-month periods ended June 30, 1997 and 1996 and the
statement of partners' capital (deficit) for the six-month period
ended June 30, 1997. Results of operations for the period are
not necessarily indicative of the results to be expected for the
full year.
Reclassification. Certain prior year amounts have been
reclassified in order to conform to the current year's
presentation.
The following significant event occurred subsequent to fiscal
year 1996 which requires disclosure in this interim report per
Regulation S-X, Rule 10-01, Paragraph (a)(5):
On June 12, 1997, the Partnership sold a property located in
Frankfort, Kentucky to the franchisee operating such property for
net proceeds of $858,339 resulting in a gain of $559,519.
Part I, Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
At June 30, 1997, the Partnership's cash and cash equivalents balance
was $1,355,764, compared to $1,022,064 at December 31, 1996. The
increase is primarily attributable to net proceeds received from
the June 12, 1997 sale of a restaurant property located in
Frankfort, Kentucky (the "Frankfort Property") and net cash flow
from operations for the second quarter of 1997, partially offset by
distributions to the partners. The Partnership's cash balance at
June 30, 1997 consisted primarily of the Partnership's working
capital and net cash flow from operations for the second quarter of
1997. At June 30, 1997, the Partnership owned 22 restaurant
properties (hereinafter referred to individually as a "Property"
and, collectively, as the "Properties").
BK III Restaurants Inc., the general partner of the Partnership (the
"General Partner") has begun marketing the Partnership's remaining
22 Properties for a bulk sale to a single purchaser and has engaged
the services of Jones Lang Wootton, a nationally recognized real
estate broker, to assist the Partnership in its marketing efforts.
Once the sale of the Properties is completed the General Partner
intends to distribute the net sales proceeds in accordance with the
terms of the Partnership Agreement. While it is hoped that a sale
of the remaining Properties can be completed during 1997, there can
be no assurance that such efforts will be successful. Until all of
the Properties are sold, the Partnership intends to continue
operating the Properties and distributing the net cash flow from
operations to the partners in accordance with the terms of the
Partnership Agreement.
Rent and other receivables totaled $113,826 at June 30, 1997, compared
to $80,880 at December 31, 1996. The increase is primarily
attributable to the timing and remittance of rental payments.
At June 30, 1997, the Partnership had distributions payable of
$1,238,117, of which $858,339 represented net proceeds from the
aforementioned sale of the Frankfort Property. On July 30, 1997,
the Partnership paid a distribution in the amount of $80.70 per
Unit. This distribution included $24.05 per Unit from net cash
flow from operations for the second quarter and $56.65 per Unit
from the net proceeds from the sale of the Frankfort Property.
Including these 1997 second quarter distributions, Unitholders have
received total cash distributions of $1,577.16 per original
$1,000.00 Unit since the inception of the Partnership. This total
includes distributions of net cash flow from operations in the
amount of $1,400.59 per Unit and distributions of net proceeds from
the sales of Properties in the amount of $176.57 per Unit.
Distributions of net sales proceeds represent returns of capital
which have reduced the size of each Unit from $1,000.00 to $823.43.
Results of Operations
The Partnership generated net income for the three- and six-month
periods ended June 30, 1997 of $1,015,856 and $1,387,703,
respectively, compared to $387,620 and $714,116 for the
corresponding periods in 1996. The increase is primarily
attributable to a gain on the sale of the Frankfort Property and a
decrease in depreciation expense which was partially offset by an
increase in general and administrative expenses.
Rental income for the three- and six-month periods ended June 30, 1997
was $600,900 and $1,111,216, respectively, compared to $614,464 and
$1,144,763 for the corresponding periods in 1996. The decrease is
primarily attributable to the sale of the Delhi Property in the
fourth quarter of 1996 and the sale of the Frankfort Property in
June 1997.
Interest income for the three- and six-month periods ended June 30,
1997 totaled $8,207 and $17,814, respectively, compared to $4,101
and $10,268 for the corresponding periods in 1996. The increase is
due to a higher average invested cash balance maintained by the
Partnership during the first six months of 1997 compared to the
first six months of 1996.
Ground lease rent for the three- and six-month periods ended June 30,
1997 totaled $62,731 and $125,463, respectively, compared to
$72,843 and $145,686 for the corresponding periods in 1996. The
decrease is primarily attributable to the sale of the Partnership's
leasehold interest in the Delhi Property in the fourth quarter of
1996.
General and administrative expenses totaled $22,119 and $59,907 for
the three- and six- month periods ended June 30, 1997, compared to
$21,514 and $38,480 for the corresponding periods in 1996. During
the 1997 periods, certain expenses incurred by an unaffiliated
third party service provider in servicing the Partnership, which
were voluntarily absorbed by affiliates of the General Partner in
prior periods, were reimbursable to the General Partner and its
affiliates.
No depreciation expense was recorded for the three- or six-month
periods ended June 30, 1997, compared to $69,409 and $138,819 for
the corresponding 1996 periods. Effective December 31, 1996, the
Partnership ceased recording depreciation expense as a result of
the classification of the Properties as real estate held for sale
in accordance with Statements of Financial Accounting Standards No.
121.
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 Form 8-
K were filed during the quarter ended June 30, 1997.
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 14, 1997 BY:/s/ Kenneth F. Boyle
Name: Kenneth F. Boyle
Title: President, Director and Chief Financial Officer
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-END> Jun-30-1997
<CASH> 1,355,764
<SECURITIES> 000
<RECEIVABLES> 113,826
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 1,469,590
<PP&E> 000
<DEPRECIATION> 000
<TOTAL-ASSETS> 6,364,402
<CURRENT-LIABILITIES> 1,300,864
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 5,063,538
<TOTAL-LIABILITY-AND-EQUITY>6,364,402
<SALES> 000
<TOTAL-REVENUES> 1,133,099
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 304,915
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> 828,184
<INCOME-TAX> 000
<INCOME-CONTINUING> 000
<DISCONTINUED> 000
<EXTRAORDINARY> 559,519
<CHANGES> 000
<NET-INCOME> 1,387,703
<EPS-PRIMARY> 89.38
<EPS-DILUTED> 89.38
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