UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR PERIOD ENDING SEPTEMBER 30, 1997
Commission File Number:
33-04345
Exact name of Registrant as specified in its charter:
Florida Income Fund II, Limited Partnership
State or other Jurisdiction of incorporation or organization:
Ohio
I.R.S. Employer Identification Number:
33-1168320
Address of Principal Executive Offices:
12800 University Drive, Ste 675
Fort Myers, FL 33907
Registrant's Telephone Number, including Area Code:
(941) 481-2011
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
None
The registrant 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 has been subject
to such filing requirements for the past 90 days.<PAGE>
<PAGE>
FLORIDA INCOME FUND II, L.P.
INDEX
PAGE NO.
PART I
FINANCIAL INFORMATION
Balance Sheets at September 30 1997
and December 31, 1996. . . . . . . . . . . . . . . . . .3
Statements of Income for the Three and Nine
Months Ended September 30, 1997 and 1996 . . . . . . . .4
Statements of Cash Flows for the Nine
Months Ended September 30, 1997 and 1996 . . . . . . . .5
Notes to Financial Statements. . . . . . . . . . . . . .6
Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . .6-8
Other Information. . . . . . . . . . . . . . . . . . . .9
Signatures . . . . . . . . . . . . . . . . . . . . . . 10
Cover Page
Exhibit 27 - Financial Data Schedule
PAGE 2<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
FLORIDA INCOME FUND II, LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
Sept 30, Dec. 31,
1997 1996
___________ ___________
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash 153,255 251,866
A/R Trade, Net of allowance for 70,171 32,004
doubtful accounts of $102,146
for Sept 30, 1997 and $102,146
for December 31, 1996)
Notes Receivable 17,735 44,877
Prepaid Expenses and Other 24,650 14,391
_________ _________
Total Current Assets 265,811 343,138
RENTAL PROPERTIES, NET OF
ACCUMULATED DEPRECIATION OF
$636,072 AT SEPT 30, 1997 AND
$1,895,885 AT DECEMBER 31, 1996 2,461,054 5,128,779
INTANGIBLE ASSETS
Deferred Loan Costs, Net 17,043 20,050
_________ _________
TOTAL ASSETS 2,743,908 5,491,967
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES
Current Maturities of Notes
and Mortgages Payable 24,510 24,510
Accounts Payable 12,956 17,664
Accrued Expenses 13,643 10,486
Customer & Security Deposits 17,491 53,825
Deposit on Sale 0 0
_________ _________
TOTAL CURRENT LIABILITIES 68,600 106,485
NOTES AND MORTGAGES PAYABLE 2,449,702 2,455,700
PARTNERS' CAPITAL
General Partners' Capital (48,593) (39,621)
Limited Partners' Capital 249,244 2,969,403
Net Income 24,955 0
_________ _________
TOTAL PARTNERS' EQUITY 225,606 2,929,782
TOTAL LIABILITIES
AND PARTNERS' CAPITAL 2,743,908 5,491,967
</TABLE>
See Accompanying Notes to the Financial Statements
PAGE 3<PAGE>
<PAGE>
<TABLE>
<CAPTION>
FLORIDA INCOME FUND II, LIMITED PARTNERSHIP
STATEMENTS OF INCOME
(Unaudited)
For Three Months Ended For Nine Months Ended
09/30/97 09/30/96 09/30/97 09/30/96
________ ________ ________ ________
<S> <C> <C> <C> <C>
REVENUES:
Sales Proceeds 0 12,000,000 2,840,000 13,950,000
Rental Income 0 268,115 385,019 1,609,161
Interest Income 734 4,043 2,116 30,465
_______ __________ _________ __________
Total Revenues 734 12,272,158 3,227,135 15,589,626
EXPENSES:
Cost of Sales and
Closing Costs 0 7,584,726 2,819,056 9,186,517
Property Operating
Expenses 12,653 202,412 194,380 581,627
Real Estate Taxes 0 31,424 47,647 132,566
Interest Expense 0 59,503 54,211 537,732
Depreciation 0 55,260 83,878 291,876
Amortization 0 3,008 3,008 23,908
_______ __________ _________ __________
Total Expenses 12,653 7,936,333 3,202,180 10,754,226
NET INCOME <LOSS> (11,919) 4,335,400 24,955 4,835,400
</TABLE>
See accompanying Notes to the Financial Statements
PAGE 4<PAGE>
<PAGE>
<TABLE>
<CAPTION>
FLORIDA INCOME FUND II, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)
For Nine Months Ended
09/30/97 09/30/96
________ ________
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income 24,955 4,835,400
Adjustments to reconcile net income
to net cash provided by operations:
Depreciation & Amortization 86,886 315,784
Cost of Sales 2,586,247 8,725,004
(Increase) decrease in receivables (11,026) 19,396
(Increase) decrease in prepaid
expenses and other (10,259) (15,141)
Increase (decrease) accounts payable
and accrued expenses (1,551) 5,624
Increase (decrease) in customer
and security deposits (36,334) (111,302)
Net cash flow provided by operating ___________ ____________
activities 2,638,918 13,774,765
Cash flows from investing activities:
Improvements to rental properties (2,400) 0
___________ ____________
Net cash used in investing activities (2,400) (119,931)
Cash flows from financing activities:
Repayments of long-term borrowings (5,998) (8,110,303)
Partner distribution paid (2,729,131) (5,496,414)
Deposit on Sale 0 0
___________ ____________
Net cash flows used by financing activities (2,735,129) (13,606,717)
Net increase (decrease) in cash (98,611) 168,048
Cash at beginning of year 251,866 147,521
Cash at September 30 153,255 315,569
</TABLE>
See accompanying Notes to the Financial Statements
PAGE 5<PAGE>
<PAGE>
FLORIDA INCOME FUND II, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial statements have been prepared in
accordance with the instructions to Form 10-Q and therefore do not
include all disclosures necessary for fair presentation of the
Partnership's financial position, results of operations and
statements of cash flows in conformity with generally accepted
accounting principles, as set forth in the Partnership's Form 10-K
for the period ended December 31, 1996, or any other interim
period. In management's opinion, all adjustments have been made to
the financial statements necessary for a fair presentation of the
interim periods presented.
NOTE 2 - RELATED PARTY TRANSACTIONS
During the three month period ended September 30, 1997, and
September 30, 1996, the Partnership incurred $726 and $3,657 in
property management fees paid to Mariner Capital Management, Inc.,
the Managing General Partner, in accordance with the Partnership
Agreement. These expenses are included in property expenses. The
General Partners and their affiliates are also entitled to
reimbursement of costs (including amounts of any salaries paid to
employees or its affiliates) directly attributable to the operation
of the Partnership that could have been provided by independent
parties. Costs amounting to $7,800 were incurred during the third
quarter of 1997. This compares to $7,800 of costs that were
incurred during the third quarter of 1996.
NOTE 3 - BALANCE SHEET
The Balance Sheet at December 31, 1996, has been taken from the
audited Financial Statements at that date.
NOTE 4 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION RESULTS OF OPERATIONS
Liquidity
There are three property transactions which had a material effect
on the Partnership's liquidity including the possibility of a total
liquidation of the Partnership within 60 to 120 days. These
transactions are as follows:
PAGE 6<PAGE>
<PAGE>
1. The Partnership sold Broadway Medical Center to an
unrelated third party on May 21, 1997 at a price of
$600,000 as reported in an 8-K filed on May 21, 1997.
The sale generated approximately $500,000 which was
available for distribution to the partners.
2. The Partnership sold Manatee West Shopping Center to
an unrelated third party on June 16, 1997 at a price
of $2,240,000 as reported in an 8-K filed on June 16,
1997. The sale generated approximately $2,050,000
which was available for distribution to the partners.
3. The Partnership has elected to discontinue making
further payments on its first mortgage loan to
Allstate Insurance Company related to Pinebrook
Commons Shopping Center with the intention to deed the
property to Allstate. This decision has been made in
order to eliminate monthly negative cash flow of
approximately $10,000. The decision is also being
made because a recent property appraisal estimates the
property's value at $2,300,000 as compared to the
current loan balance of $2,474,000. The loan is a
non-recourse loan with liability limited to the net
value of Pinebrook Commons, as such, shall not have a
detrimental effect on the other Partnership assets.
The Partnership's cash position, including interest bearing
deposits at September 30, 1997, was $153,255. This compares to its
cash position of $251,866 at December 31, 1996. At September 30,
1996, the Partnership's cash position, including interest bearing
deposits, was $315,569.
The decrease in cash between December 31, 1996, and September 30,
1997, was due primarily to cash provided by operations of
$2,638,918, improvements to rental properties of $2,400, principal
repayments of $5,998 and partnership distributions paid of
$2,729,131.
The Partnership's total investment in properties for its portfolio
at September 30, 1997, was $3,097,126. This compares to its total
property investment at December 31, 1996, of $7,024,664 and
$8,802,414 at September 30, 1996. These declines resulted
primarily from the sales of Broadway Medical Center and Manatee
West Shopping Center in 1997 and the sale of Town Center Shopping
Center in July, 1996.
PAGE 7<PAGE>
<PAGE>
Liquidity - Continued
The sale of Broadway Medical Center and Manatee West Shopping
Center resulted in a material reduction in both partnership assets,
partnership debt and partnership liquidity. The decision to deed
Pinebrook Commons to the lender could result in the liquidation of
the Partnership within 60 to 120 days.
Other than as discussed herein, there are no known trends, demands,
commitments, events or uncertainties that in management's opinion
will result or are reasonably likely to result in the registrant's
liquidity increasing or decreasing in any material way.
Capital Resources
The Partnership's outstanding debt as of September 30, 1997, was
$2,474,212. This compares to debt outstanding December 31, 1996,
of $2,480,210. The $5,998 decrease during the first nine months
was due to principal pay downs of $5,998. The Partnership had
$2,486,054 of outstanding debt at September 30, 1996.
Results of Operations
As of September 30, 1997, the occupancy percentages for the Fund's
property was as follows: Pinebrook Commons, 60%.
For the nine months ended September 30, 1997, rental income
decreased $1,224,142 as compared to the same period a year ago.
The decrease was attributable to selling most of the Partnership's
assets over the last 12 months.
For the nine months ended September 30, 1997, interest income
decreased by $28,349.
Property expenses decreased by $387,247 from a year ago due to the
sale of the properties.
Real estate taxes have decreased due to the sale of the properties.
Interest expense has decreased $483,521 for the nine month period
ended September 30, 1997, as compared to a year ago. This decrease
is due to the partnership's debt decreasing from $10,596,357 at
December 31, 1995, to $2,474,212 as of September 30, 1997 and due
to the stoppage of mortgage payments being made at Pinebrook
Commons. The partnership's debt as of December 31, 1996, was
$2,480,210.
Depreciation and amortization have decreased $228,898 due to the
sale of the properties.
PAGE 8<PAGE>
<PAGE>
PART II
OTHER INFORMATION
FLORIDA INCOME FUND II, LIMITED PARTNERSHIP
ITEM 1. LEGAL PROCEEDINGS
The Partnership's decision to discontinue mortgage
payments on Pinebrook Commons has resulted in a
foreclosure action against the Partnership by Allstate
Life Insurance Company, as of June 27, 1997.
The Partnership has answered Allstate's foreclosure
complaint and does not intend to oppose the
foreclosure action. Allstate is seeking title to the
property and is demanding all cash flow from the
property from the point of default. The Partnership
is reserving all property cash flow to satisfy the
demand. The loan is a non-recourse loan with
liability limited to the real estate asset. Therefore
Allstate can not seek a deficiency judgment against
the Partnership.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER MATERIALLY IMPORTANT EVENTS
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
None
(B) REPORTS ON FORM 8-K
None
PAGE 9<PAGE>
<PAGE>
PART III
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.
FLORIDA INCOME FUND II, LIMITED PARTNERSHIP
MARINER CAPITAL MANAGEMENT, INC.
MANAGING GENERAL PARTNER
(Registrant)
11/7/97 By: /s/ LAWRENCE A. RAIMONDI
--------------------------------
Lawrence A. Raimondi
President, Director and CEO
Mariner Capital Management, Inc.
(Principal Executive Officer)
11/7/97 By: /s/ JOE K. BLACKETER
--------------------------------
Joe K. Blacketer
Secretary/Treasurer
Mariner Capital Management, Inc.
(Principal Financial and Accounting Officer)
PAGE 10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 153,255
<SECURITIES> 0
<RECEIVABLES> 190,052
<ALLOWANCES> 102,146
<INVENTORY> 0
<CURRENT-ASSETS> 265,811
<PP&E> 3,097,126
<DEPRECIATION> 636,072
<TOTAL-ASSETS> 2,743,908
<CURRENT-LIABILITIES> 68,600
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,743,908
<SALES> 2,840,000
<TOTAL-REVENUES> 3,227,135
<CGS> 2,819,056
<TOTAL-COSTS> 2,819,056
<OTHER-EXPENSES> 328,913
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 54,211
<INCOME-PRETAX> 24,955
<INCOME-TAX> 0
<INCOME-CONTINUING> 4,011
<DISCONTINUED> 20,944
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,955
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
