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: March 31, 1999 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
incorporation or organization) Identification Number)
11691 Fall Creek Road, Indianapolis, IN 46256
- --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
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>2
THE MARINA LIMITED PARTNERSHIP
FORM 10-Q
Table of Contents
PART I. FINANCIAL INFORMATION Page No.
Item 1. Financial Statements (unaudited)
A. Balance Sheets - March 31, 1999, and December 31, 1998. 3
B. Statements of Earnings - Comparative three months ended
March 31, 1999, and 1998. 4
C. Statements of Earnings - Comparative three months ended
March 31, 1999, and 1998. 5
D. Note to Interim Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Item 3. Quantitative and Qualitative Disclosures about Market Risk 9
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 10
<PAGE>3
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
March 31, 1999, and December 31, 1998
(Unaudited)
1999 1998
---- ----
Assets
Cash and cash equivalents $ 6,504,416 $ 5,960,801
Receivables from homesite sales 1,028,760 1,032,963
Other receivables and assets 1,007,420 415,867
Properties held for sale:
Homes and homesites available for sale 2,994,463 3,256,585
Land and land improvements 941,116 941,116
--------- ----------
3,935,579 4,197,701
--------- ----------
Property and equipment:
Marine property and equipment,net 3,184,454 3,014,095
Recreational facilities, net 527,635 500,741
Commercial properties, net 2,258,512 2,301,370
--------- ----------
5,970,601 5,816,206
--------- ----------
Other investments:
Marina I 3,072,818 2,930,267
Investments in and Advances to
Flatfork Creek Utility 1,022,890 1,289,030
---------- ----------
$22,542,484 $21,642,835
========== ==========
Liabilities and Partners' Equity
Accounts payable 776,012 649,690
Accrued bonuses 78,042 104,267
Deferred revenues and sale deposits 1,079,855 282,161
--------- ----------
Total liabilities 1,933,909 1,036,118
---------- ----------
Partners' equity:
General partner 7,895,007 7,894,298
Limited partners 12,713,568 12,712,419
Total partners' equity 20,608,575 20,606,717
---------- ----------
$22,542,484 $21,642,835
=========== ===========
<PAGE>4
B. THE MARINA LIMITED PARTNERSHIP
Statements of Earnings
Three Months Ended March 31, 1999, and 1998
(Unaudited)
1999 1998
---- ----
Revenues:
Homes and homesite sales $ 396,000 $1,320,365
Marine operations 273,490 187,164
Equity in earnings of investee companies 126,411 217,663
Interest income 97,941 117,091
Rental income, net 81,833 131,000
Recreational facilities, net (29,477) (35,004)
Gain on sales of land held for investment - 234,275
Miscellaneous 2,000 -
--------- ----------
948,198 2,172,554
--------- ----------
Costs and expenses:
Cost of homes and homesites sold
and related expenses 275,349 775,628
Marine operations 413,827 299,631
General and administrative 253,399 249,641
Management fees paid to general partner 3,765 7,844
--------- ---------
946,340 1,332,744
--------- ---------
Net earnings 1,858 839,810
Net earnings attributable to general partner 710 320,870
--------- ---------
Net earnings attributable to limited partners $ 1,148 $ 518,940
========= =========
Weighted average number of limited
partner units outstanding 416,715 417,183
========= =========
Net earnings per limited partner unit $ .00 $ 1.24
========= =========
<PAGE>5
C. THE MARINA LIMITED PARTNERSHIP
Statements of Cash Flows
Three Months Ended March 31, 1999, and 1998
(Unaudited)
1999 1998
Cash flows from operating activities:
Net earnings $ 1,858 $ 839,810
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation of properties 123,666 105,967
Equity in earnings of investee companies (126,411) (217,663)
Collection of receivables relating to prior
years' homesite sales 121,203 251,511
Receivables on current year's homesite sales (117,000) (157,500)
Gain on sales of land held for investment - (234,275)
Homes and homesite development costs (545,191) (420,231)
Payments received for homes under construction 785,100 -
Cost of homes and homesites sold 134,100 238,969
Deferred revenues and sale deposits 797,654 801,386
Change in operating assets and liabilities (491,456) (728,962)
--------- --------
Net cash provided by
operating activities 663,568 479,012
--------- --------
Cash flows from investing activities:
Reduction in Advance to Flatfork Creek Utility 250,000 -
Investment in Dockside Cafe - (7,455)
Additions to marine property and equipment (243,372) (245,403)
Land and land development costs (91,893) (1,801)
Additions to recreational facilities (34,688) (3,635)
Proceeds from sales of land held for investment - 237,210
--------- ---------
Net cash (used) by investing activities (119,953) (21,084)
--------- ---------
Net increase in cash and cash equivalents 543,615 457,928
Cash and cash equivalents at beginning of period 5,960,801 5,531,556
--------- ---------
Cash and cash equivalents at end of period $6,504,416 $5,989,484
========= =========
<PAGE>6
D. THE MARINA LIMITED PARTNERSHIP
Note to Interim Financial Statements
(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, 1998 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 March 31, 1999, and for the three
months ended March 31, 1999 and 1998, 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
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE THREE MONTH PERIOD ENDED March 31, 1999 AND 1998.
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.
Homesite Sales
During the three months ended March 31, 1999 and 1998, the Partnership sold
homesites as follows:
Morse
Bridgewater Cambridge Overlook Total
March 31, 1999 1 1 1 3
March 31, 1998 0 2 4 6
The Partnership is the general partner of Marina I LP ("Marina I"), which
also develops homesites in Cambridge. During the three months ended March 31,
1999, Marina I sold five homesites from Cambridge as compared to seven homesite
sales in 1998.
<PAGE>8
Results of Operations
Three Months ended March 31
1999 Compared to 1998.
Net earnings decreased by $838,000 in 1999 from 1998. This was primarily
due to a decrease in earnings from the sale of homes and homesites of $424,000,
a decrease in earnings from sale of investment land of $234,000, and decreased
equity earnings from Marina I of $112,000.
Earnings from home and homesite sales were $121,000 in 1999, which compares
to $545,000 in 1998.
The Partnership recognized $143,000 as its share of the earnings from
Marina I in 1999, compared to $255,000 in 1998. This decrease is the result of
homesite sales of $415,000 in 1999 as compared to $792,000 in 1998.
During the first quarter of 1999, the Partnership and Marina I experienced
a temporary slowing in land sales as compared to a very strong first quarter of
1998. Sales in the currently unreported second quarter are indicating that a
shift to earlier buying in 1998 was an isolated event and a return to the more
normal later spring activity is occurring. The first quarter of 1999 was also
impacted by the lack of closings on new homes whereas one closing took place in
1998. This will always be somewhat irregular due to the construction time
period.
The Partnership had no sales of investment land in the first quarter of
1999. Earnings from this source will continue to be irregular since sales of
investment land is not currently the primary focus of the Partnership, and
investment land sales will therefore not be consistent.
Other receivables and assets were higher on March 31, 1999 due to the
seasonal increase in inventory of new boats.
As of March 31, 1999, the Partnership collected $867,000 of advance dock
rental toward the 1999 boating season. This is compared to $819,000 collected as
of March 31, 1998. The rental payments are deferred when received and recognized
as earned during the April to September boating season.
On April 5, 1999, the Partnership made a cash distribution to the partners
of record on March 25, 1999, of $3.75 per unit of partnership interest, for a
total of $2,530,000. This compares to a cash distribution of $3.50 per
partnership unit on April 3, 1998.
<PAGE>9
Computer Systems and Year 2000 Issues
The Partnership is currently upgrading its computer systems to provide a
more complete management information system, and accordingly will install
software that is anticipated will properly recognize the Year 2000 to avoid
system failures. It is anticipated that this upgrade will be complete by June
30, 1999. The cost of the Year 2000 compliance within this system change is not
identifiable, but is not deemed material.
No estimate has been made by the Partnership as to any adverse impact that
may result from the failure of the Partnership's vendors or suppliers to become
Year 2000 compliant. If the Partnership or one or more of the third party
vendors or suppliers fail to complete its Year 2000 program in a timely manner,
there can be no assurance that such failure will not have a material adverse
effect on the Partnership's operations or financial plan. The Partnership has
not developed a Year 2000 contingency plan that would address Year 2000 related
problems experienced by either the Partnership or one or more of its third party
vendors or suppliers.
The foregoing discussion of Year 2000 issues include forward-looking
statements reflecting the Partnership's current assessment with respect to its
Year 2000 compliance efforts and the impact of Year 2000 issues on the
Partnership's business and operations. Various factors could cause actual
results to differ materially from those contemplated by such assessment and
forward-looking statements, including many factors that are beyond the control
of the Partnership. These factors include, but are not limited to,
representations by vendors and customers, technological advancements, economic
conditions and competitive considerations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Pursuant to Item 305(e) of Regulation S-K, the Partnership is not required
to provide information in response to this Item 3.
<PAGE>10
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: May 14, 1999
<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
MARCH 31, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000803605
<NAME> The Marina Limited Partnership
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 6,504,416
<SECURITIES> 0
<RECEIVABLES> 1,028,760
<ALLOWANCES> 0
<INVENTORY> 3,935,579
<CURRENT-ASSETS> 0
<PP&E> 5,970,601
<DEPRECIATION> 123,666
<TOTAL-ASSETS> 22,542,484
<CURRENT-LIABILITIES> 1,933,909
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 20,608,575
<TOTAL-LIABILITY-AND-EQUITY> 22,542,484
<SALES> 669,490
<TOTAL-REVENUES> 948,198
<CGS> 689,176
<TOTAL-COSTS> 946,340
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,858
<INCOME-TAX> 0
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<NET-INCOME> 1,858
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