SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: September 30, 1997 Commission File Number: 0-13174
THE MARINA LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Indiana 35-1689935
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation ro organization) Number)
11691 Fall Creek Road, Indianapolis, IN 46256
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (317) 845-0270
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
Page 1 of 11 Pages
<PAGE>
THE MARINA LIMITED PARTNERSHIP
FORM 10-Q
Table of Contents
PART I. FINANCIAL INFORMATION Page No.
Item 1. Financial Statements (unaudited)
A. Balance Sheets - September 30, 1997, and December 31, 1996. 3
B. Statements of Earnings - Comparative three months ended
September 30, 1997, and 1996. 4
C. Statements of Earnings - Comparative nine months ended
September 30, 1997, and 1996. 5
D. Statements of Cash Flows - Comparative nine months ended
September 30, 1997, and 1996. 6
E. Note to Interim Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 8
PART II. OTHER INFORMATION
(The items of Part II are inapplicable or the answers thereto
are negative and, accordingly, no reference is made to said
items in this report.)
Signature
Page 2 of 11 Pages
<PAGE>
PART I - FINANCIAL INFORMATION
THE MARINA LIMITED PARTNERSHIP
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
The financial information incorporated in this form reflects all adjustments
which are, in the opinion of management, necessary to a fair statement of the
results for the interim period.
A. THE MARINA LIMITED PARTNERSHIP
Balance Sheets
September 30, 1997, and December 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Assets 1997 1996
------ ---- ----
<S> <C> <C>
Cash and cash equivalents $ 4,304,069 4,591,103
Investment in U.S. Treasury note 996,875 996,875
Receivables from homesite sales 1,737,790 1,460,990
Accounts receivable and other assets 442,873 612,229
Homesites available for sale 3,026,352 2,107,566
Homes under construction 491,552 -
Land and land improvements 1,016,277 1,537,940
Marina property and equipment, net 2,324,096 2,080,772
Commercial properties, net 2,464,025 2,562,076
Recreational facilities, net 451,372 362,461
Other investments:
Marina I 2,741,289 1,931,943
Dockside Cafe 187,406 205,651
Flatfork Creek Utility 3,191 -
---------- -------
$ 19,695,615 18,449,606
========== ==========
Liabilities and Partners' Equity
Accounts payable 464,644 383,372
Construction costs payable - 128,014
Accrued bonuses 162,309 56,305
Deferred revenues and sale deposits 157,158 137,223
Amount payable to Flatfork Creek Utility - 107,778
Amount payable as trustee 9,790 7,265
---------- ----------
793,901 819,957
---------- ----------
Partners' equity:
General partner - 201,188 units 5,632,648 5,270,017
Limited partners - 473,947 units 13,269,066 12,359,632
---------- ----------
Total partners' equity 18,901,714 17,629,649
---------- ----------
$ 19,695,615 18,449,606
========== ==========
</TABLE>
Page 3 of 11 Pages
<PAGE>
B. THE MARINA LIMITED PARTNERSHIP
Statements of Earnings
Three Months Ended September 30, 1997, and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Revenues:
Homes and Homesite sales $ 291,966 $1,400,000
Marina operations 1,289,423 1,196,698
Equity in earnings of investee companies 207,738 127,000
Interest income 117,943 121,790
Rental income, net 28,952 83,100
Recreational facilities, net 85,187 112,486
Gain on sales of land held for investment 566,144 -
Miscellaneous 3,654 -
--------- ---------
2,591,007 3,041,074
Expenses:
Cost of homes and homesites sold
and related expenses 114,335 311,157
Homebuilding expenses 80,171 -
Marina operations 728,715 662,489
General and administrative 283,031 206,852
Management fees paid to general partner 31,558 33,000
--------- ---------
1,237,810 1,213,498
--------- ---------
Net earnings 1,353,197 1,827,576
Net earnings attributable to
general partner 403,248 544,618
--------- ---------
Net earnings attributable to
limited partners $ 949,949 $ 1,282,958
========= =========
Weighted average number of limited
partner units outstanding 473,947 473,947
Net earnings per limited partner unit $ 2.00 $ 2.71
=========== ==========
</TABLE>
Page 4 of 11 Pages
<PAGE>
C. THE MARINA LIMITED PARTNERSHIP
Statements of Earnings
Nine Months Ended September 30, 1997, and 1996
(Unaudited)
1997 1996
---------- ----------
Revenues:
Homes and Homesite sales $2,062,459 $3,438,027
Marina operations 3,373,176 2,834,966
Equity in earnings of investee companies 883,331 388,560
Interest income 325,205 315,685
Rental income, net 159,146 184,591
----------
Recreational facilities, net 94,993 124,571
Gain on sales of land held for investment 661,946 --
Miscellaneous 3,654 --
---------- ----------
7,563,910 7,286,400
Expenses:
Cost of homes and homesites sold
and related expenses 867,246 1,375,588
Homebuilding expenses 107,984 --
Marina operations 2,295,984 1,916,515
General and administrative 757,063 656,978
Management fees paid to general partner 69,378 65,650
---------- ----------
4,097,655 4,014,731
---------- ----------
Net earnings 3,466,255 3,271,669
Net earnings attributable to
general partner 1,032,933 960,491
---------- ----------
Net earnings attributable to
limited partners $2,433,322 $2,311,178
========== ==========
Weighted average number of limited
partner units outstanding 473,947 476,930
Net earnings per limited partner unit $ 5.13 $ 4.85
========== ==========
Page 5 of 11 Pages
<PAGE>
D. THE MARINA LIMITED PARTNERSHIP
Statements of Cash Flows
Nine Months Ended September 30, 1997, and 1996
(Unaudited)
1997 1996
---- ----
Cash flows from operating activities:
Net earnings $ 3,466,255 $ 3,271,669
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation of properties 267,286 248,775
Equity in earnings of investee companies (883,331) (388,560)
Collection of receivables relating to prior
years' homesite sales 461,073 --
Receivables on current year's homesite sales (737,873) (145,671)
Gain on sales of land held for investment (661,946) --
Homes and homesite development costs (1,263,696) (916,127)
Cost of homesites sold 344,910 1,042,115
Deferred revenues and sale deposits 19,935 (20,895)
Change in operating assets and liabilities 78,665 48,334
Net cash provided by
operating activities 1,091,278 3,139,640
----------- ----------
Cash flows from investing activities:
Investment in Marina I 76,763 397,630
Investment in Dockside Cafe,
net of distributions received 54,450 23,753
Additions to marina property and equipment (350,846) (130,681)
Land and land development costs (14,585) (750,667)
Cost of commercial properties (43,447) (172,631)
Additions to recreational facilities (107,177) (28,160)
Proceeds from sales of land held for investment 1,198,194 --
----------- -----------
Net cash provided (used) by
investing activities 813,252 (660,756)
----------- ----------
Cash flows from financing activities:
Distribution to partners (2,194,189) (2,194,189)
Amount payable as trustee 2,525 (5,827)
Utility refunds received -- 4,514
----------- ----------
Net cash used in
financing activities (2,191,664) (2,195,502)
----------- ----------
Net (decrease) increase in cash
and cash equivalents (287,034) 283,382
Cash and cash equivalents at
beginning of period 4,591,103 5,307,824
----------- ---------
Cash and cash equivalents at
end of period $ 4,304,069 5,591,206
=========== ==========
Page 6 of 11 Pages
<PAGE>
E. THE MARINA LIMITED PARTNERSHIP
Note to Interim Financial Statements
Three and Nine Months Ended September 30, 1997, and 1996
(Unaudited)
Note (1) Basis of Presentation
A summary of significant accounting policies used by The Marina Limited
Partnership is set forth in Note 1 of Notes to Financial Statements included in
the December 31, 1996 Annual Report Form 10-K.
The interim financial statements have been prepared in accordance with
instructions to Form 10-Q, and therefore, do not include all information and
footnotes necessary for a fair presentation of financial position, results of
operations and cash flows in conformity with generally accepted accounting
principles.
The interim financial statements at September 30, 1997, and for the three and
nine months ended September 30, 1997 and 1996, have not been audited by
independent accountants, but reflect, in the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows for
such periods.
Page 7 of 11 Pages
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS FOR THE THREE AND NINE MONTHS PERIODS ENDED SEPTEMBER 30, 1997 AND
1996.
The following discussion and analysis is intended to address the
significant factors affecting the Partnership's results of operations and
financial condition. It is designed to provide a more comprehensive review of
the operating results and financial position than could be obtained from an
analysis of the financial statements alone. It should, however, be read in
conjunction with the financial statements included elsewhere herein.
General
In 1997, the Partnership's primary sources of revenue were from
homesite sales which accounted for 27 percent for the first nine months of 1997
compared with 47 percent for 1996, and marina operations which accounted for 45
percent of the Partnership's revenues for the first nine months of 1997 as
compared to 39 percent in 1996.
Homesite Sales
During the nine month period ended September 30, 1997 the Partnership
sold 16 homesites which compares to 27 homesites sold in 1996. There were six
homesites sold in Bridgewater compared with four homesite sold in 1996. The
Partnership sold 10 homesites from Cambridge compared with 20 homesites sold in
1996. The Partnership did not sell any homesites in Morse Overlook in 1997
compared with four homesite sold 1996.
During the three month period ended September 30, 1997 the Partnership
sold two homesites compared to eight homesites sold during the third quarter of
1996. There were two homesites sold in Bridgewater during the third quarter of
1997 which compares with three sold in 1996. The Partnership sold no homesites
from Cambridge or Morse Overlook during the third quarter of 1997 compared with
three homesites in Cambridge and two homesites in Morse Overlook sold during the
third quarter of 1996.
The Partnership is the general partner of Marina I LP ("Marina I"),
which has developed homesites in Cambridge. During the nine month period ended
September 30, 1997 Marina I sold 16 homesites from Cambridge as compared to 16
homesite sales in 1996. Marina I recorded $104,600 in revenue during the nine
month period ended September 30, 1997 as its share from the Partnership's sale
of a homesite that was partially owned by Marina I, as compared to $136,000
recorded in 1996.
Marina I sold five homesites in Cambridge during the third quarter of
1997, as compared to one homesite sale during 1996.
Page 8 of 11 Pages
<PAGE>
The Partnership received distributions of $77,000 from Marina I in the
nine month period ended September 30, 1997 as compared with $398,000 received in
the first nine months of 1996.
Results of Operations
Nine Months ended September 30
1997 Compared to 1996. Net earnings increased by $195,000 in 1997 from
1996. This increase was primarily due to increased equity earnings from Marina I
of $521,000, an increase in earnings after direct costs of $157,000 from Marina
operations, and an increase in gains on the sale of investment land of $662,000.
Such increases were partially offset by a decrease in earnings from sale of
homesites of $975,000.
Earnings from homesite sales were $1,087,000 in 1997, which compares to
$2,062,000 in 1996. During the three month period ended September 30, 1997 the
Partnership sold a block of homesite land for $399,000 and realized a profit of
$90,000. Without considering such bulk sale, there was an increase in net
earnings per homesite sale in 1997 as a result of the sale of a higher
percentage of waterfront homesites.
The Partnership recognized $886,000 as its share of the earnings from
Marina I in 1997, compared to $365,000 in 1996. Such increase is the result of
an increase in homesite sales to $2,049,000 in 1997 as compared to $617,000 in
1996.
During 1997, the Partnership sold commercial property held for
investment at Geist Crossing for an aggregate $1,198,000, which resulted in a
gain of $662,000.
Earnings from marina operations increased in 1997 over 1996 by $159,000
as a result of revenues increasing by $538,000. This increase results from
increases in all significant areas of the Marina operations.
General and administrative expenses increased by $104,000 in 1997 as
compared to 1996. The principal increase relates to an increase in property
taxes of $37,000. All other elements of G&A expense were generally consistent in
1997 with 1996.
On April 17, 1997, the Partnership made a cash distribution to the
partners of record on April 3, 1997, of $3.25 per unit of partnership interest,
for a total of $2,194,000. This compares to a cash distribution of $3.25 per
partnership unit on April 18,1996.
Page 9 of 11 Pages
<PAGE>
Three Months ended September 30
1997 Compared to 1996. Net earnings decreased by $474,000 in 1997 from
1996. This was primarily due to decreased homesite sales of $1,108,000 resulting
in a decrease after related direct costs of $991,000. This decrease was
partially offset by an increase in equity earnings from Marina I of $144,000, an
increase in earnings after direct costs of $26,000 from Marina operations, and
an increase in gains on the sale of investment land of $566,000.
Earnings from homesite sales were $98,000 in 1997, which compares to
$1,089,000 in 1996. During October 1997 the Partnership sold four homesites
generating sales revenue of $593,000 compared with two homesites sold in 1996 at
$176,000 in sales revenue.
The Partnership recognized $211,000 as its share of the earnings from
Marina I in 1997, compared to $67,000 in 1996 . Such increase is the result of
an increase in homesite sales to $175,000 in 1997 as compared to $74,000 in
1996. During October 1997 the Marina I sold two homesites generating sales
revenue of $144,000 compared with three homesites sold in 1996 at $309,000 in
sales revenue.
Earnings from marina operations increased in 1997 over 1996 by $26,000
as a result of revenues increasing by $93,000. This increase results from
increases in all significant areas of the Marina operations.
General and administrative expenses increased by $75,000 in 1997 as
compared to 1996. The principal increase relates to an increase in property
taxes of $37,000. All other elements of G&A expense were generally consistent in
1997 with 1996.
Page 10 of 11 Pages
<PAGE>
SIGNATURE
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.
THE MARINA LIMITED PARTNERSHIP
(Registrant)
By: /s/ Donald J. Calabria
-----------------------------
Donald J. Calabria
Vice President and
Chief Financial Officer
The Marina II Corporation
General Partner of
The Marina Limited Partnership
DATE: November 12, 1997
Page 11 of 11 Pages
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS CONTAINED IN THE FILER'S FORM 10-Q FOR THE QUARTER ENDED
SEPTEMBER 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000803605
<NAME> THE MARINA LIMITED PARTNERSHIP
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 4,304,069
<SECURITIES> 996,875
<RECEIVABLES> 2,180,663
<ALLOWANCES> 0
<INVENTORY> 3,517,904
<CURRENT-ASSETS> 0
<PP&E> 6,255,770
<DEPRECIATION> 0
<TOTAL-ASSETS> 19,695,615
<CURRENT-LIABILITIES> 793,901
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 18,901,714
<TOTAL-LIABILITY-AND-EQUITY> 19,695,615
<SALES> 5,435,635
<TOTAL-REVENUES> 7,563,910
<CGS> 3,163,230
<TOTAL-COSTS> 4,097,655
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,466,255
<EPS-PRIMARY> 5.13
<EPS-DILUTED> 5.13
</TABLE>
