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, 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 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,
1997 1996
Assets
Real estate held for sale $ 5,175,404 $ 5,175,404
Cash and cash equivalents 518,762 1,022,064
Rent and other receivables 47,041 80,880
Due from affiliates 14,033 14,239
Total Assets $ 5,755,240 $ 6,292,587
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 54,179 $ 44,811
Distributions payable 415,262 918,562
Total Liabilities 469,441 963,373
Partners' Capital (Deficit):
General Partner (26,941) (24,770)
Limited Partners
(15,000 interests outstanding) 5,312,740 5,353,984
Total Partners' Capital 5,285,799 5,329,214
Total Liabilities and Partners' Capital $ 5,755,240 $ 6,292,587
STATEMENT OF PARTNERS' CAPITAL (DEFICIT)
For the three months ended March 31, 1997
General Limited
Partner Partners Total
Balance at December 31, 1996 $ (24,770) $5,353,984 $5,329,214
Net income 18,592 353,255 371,847
Distributions to partners (20,763) (394,499) (415,262)
Balance at March 31, 1997 $ (26,941) $5,312,740 $5,285,799
STATEMENTS OF OPERATIONS
For the three months ended March 31, 1997 1996
Income
Rental income $ 510,316 $ 530,299
Interest income 9,607 6,167
Miscellaneous income 3,085 455
Total Income 523,008 536,921
Expenses
Ground lease rent 62,732 72,843
Management fee 50,641 51,206
General and administrative 37,788 16,966
Depreciation --- 69,410
Total Expenses 151,161 210,425
Net Income $ 371,847 $ 326,496
Net Income Allocated:
To the General Partner $ 18,592 $ 19,795
To the Limited Partners 353,255 306,701
$ 371,847 $ 326,496
Per limited partnership interest
(15,000 outstanding) $23.55 $20.45
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1997 1996
Cash Flows From Operating Activities
Net income $ 371,847 $ 326,496
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation --- 69,410
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Rent and other receivables 33,839 6,938
Due from affiliates 206 ---
Accounts payable and accrued expenses 9,368 (8,578)
Due from Burger King Corporation --- 50,977
Net cash provided by operating activities 415,260 445,243
Cash Flows From Financing Activities
Cash distributions to partners (918,562) (404,096)
Net cash used for financing activities (918,562) (404,096)
Net increase (decrease) in cash and cash equivalents (503,302) 41,147
Cash and cash equivalents, beginning of period 1,022,064 502,341
Cash and cash equivalents, end of period $ 518,762 $ 543,488
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 reoccurring
adjustments which are, in the opinion of management, necessary to present a
fair statement of financial position as of March 31, 1997, the results of
operations for the three-month periods ended March 31, 1997 and 1996, the
statement of partners' capital (deficit) for the three-month period ended March
31, 1997 and the statements of cash flows for the three-month periods ended
March 31, 1997 and 1996. Results of operations for the three-month period
ended March 31, 1997 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.
No significant events have occurred subsequent to fiscal year 1996, 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
At March 31, 1997, the Partnership's cash and cash equivalents balance was
$518,762, compared to $1,022,064 at December 31, 1996. The decrease is
primarily attributable to net proceeds received from the November 15, 1996 sale
of a leasehold interest in a restaurant property located in Delhi Township,
Ohio (the "Delhi Property"), which were included in the Partnership's cash
balance at December 31, 1996. These funds were distributed by the Partnership
to the partners on January 30, 1997. The Partnership's cash balance at March
31, 1997 consisted primarily of the Partnership's working capital and cash flow
from operations for the first quarter of 1997. At March 31, 1997, the
Partnership owned 23 restaurant properties (hereinafter referred to
individually as a "Property" and, collectively, as the "Properties").
The General Partner has decided to commence marketing the Partnership's
remaining 23 Properties in the second quarter of 1997 for a bulk sale to a
single purchaser. Upon the sale of the Properties, 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 Partnership's remaining 23
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.
Rent and other receivables totaled $47,041 at March 31, 1997, compared to
$80,880 at December 31, 1996. The decrease is primarily attributable to a
decrease in percentage rent earned by the Partnership for the first quarter of
1997 as compared to the fourth quarter of 1996 as a result of a decrease in
sales at certain of the Properties in the first quarter of 1997 as compared to
the fourth quarter of 1996.
Accounts payable and accrued expenses increased from $44,811 at December 31,
1996 to $54,179 at March 31, 1997. The increase is primarily attributable to
an increase in administrative expenses and an increase in legal expenses
incurred in the fourth quarter of 1996. These increases were partially offset
by annual audit fee payments made by the Partnership during the first quarter
of 1997.
At March 31, 1997, the Partnership had distributions payable of $415,262, of
which $8,611 was withheld by the Partnership to pay state non-resident income
tax and Federal foreign withholding taxes, and the net amount was subsequently
distributed to the partners on May 2, 1997. Including the 1997 first quarter
distribution of cash flow from operations paid on May 2, 1997 to the limited
partners of the Partnership (the "Unitholders") in the amount of $26.30 per
Unit, Unitholders have received total cash distributions of $1,496.46 per
original $1,000 Unit since the inception of the Partnership. This total
includes distributions of net cash flow from operations in the amount of
$1,376.54 per Unit and distributions of net proceeds from the sales of
Properties in the amount of $119.92 per Unit. Distributions of net sales
proceeds represent returns of capital which have reduced the size of each Unit
from $1,000 to $880.08.
Results of Operations
The Partnership generated net income of $371,847 for the three-month period
ended March 31, 1997, compared to $326,496 for the corresponding period in
1996. The increase is primarily attributable to a decrease in depreciation
expense, which was partially offset by a decrease in rental income and an
increase in general and administrative expenses.
Rental income decreased from $530,299 for the three-month period ended March
31, 1996 to $510,316 for the corresponding period in 1997. The decrease is
primarily attributable to the sale of the Delhi Property in the fourth quarter
of 1996.
Interest income for the three-month period ended March 31, 1997 totalled
$9,607, compared to $6,167 for the corresponding period in 1996. The increase
is due to a higher average invested cash balance maintained by the Partnership
during the first quarter of 1997 compared to the first quarter of 1996.
Ground lease rent for the three-month period ended March 31, 1997 totalled
$62,732, compared to $72,843 for the corresponding period 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 totalled $37,788 for the three months ended
March 31, 1997, compared to $16,966 for the corresponding period in 1996.
During the 1997 period, 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 reimbursed
to the General Partner and its affiliates.
No depreciation expense was recorded for the three months ended March 31, 1997,
compared to $69,410 for the corresponding period in 1996. Effective December
31, 1996, the Partnership will no longer record depreciation expense as a
result of the reclassification of the Properties as real estate held for sale
pursuant to 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 three month period covered by this report.
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 14, 1997 BY: /s/ Rocco F. Andriola
Name: Rocco F. Andriola
Title: President, Director and
Chief Financial Officer
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<PERIOD-END> Mar-31-1997
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