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: June 30, 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 Identification
incorporation or organization) Number)
11691 Fall Creek Road, Indianapolis, IN 46256
- -------------------------------------------------------- ----------
(Address of principal executive offices) (ZipCode)
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 - June 30, 1999, and December 31, 1998 3
B. Statements of Earnings - Comparative three months ended
June 30, 1999, and 1998. 4
C. Statements of Earnings - Comparative six months ended
June 30, 1999, and 1998. 5
D. Statements of Cash Flows - Comparative six months ended
June 30, 1999, and 1998. 6
E. Note to Interim Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk 11
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 11
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
June 30, 1999, and December 31, 1998
(Unaudited)
Assets 1999 1998
------ ---- ----
Cash and cash equivalents $ 7,415,759 $ 5,960,801
Receivables from homesite sales 1,097,799 1,032,963
Other receivables and assets 692,650 415,867
Properties held for sale:
Homes and homesites available for sale 2,430,902 3,256,585
Land and land improvements 879,338 941,116
----------- -----------
3,310,240 4,197,701
----------- -----------
Property and equipment:
Marine property and equipment,net 3,147,056 3,014,095
Recreational facilities, net 497,992 500,741
Commercial properties, net 2,215,653 2,301,370
----------- -----------
5,860,701 5,816,206
----------- -----------
Other investments:
Marina I 3,663,548 2,930,267
Investments in and advances to
Flatfork Creek Utility 525,966 1,289,030
$22,566,663 $21,642,835
Liabilities and Partners' Equity
Accounts payable $ 1,145,638 $ 649,690
Accrued bonuses 234,843 104,267
Deferred revenues and sale deposits 708,785 282,161
----------- -----------
Total liabilities 2,089,266 1,036,118
----------- -----------
Partners' equity:
General partner 7,844,858 7,894,298
Limited partners 12,632,539 12,712,419
Total partners' equity 20,477,397 20,606,717
----------- -----------
$22,566,663 $21,642,835
Page 3 of 11 Pages
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B. THE MARINA LIMITED PARTNERSHIP
Statements of Earnings
Three Months Ended June 30, 1999, and 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Revenues:
Homes and homesite sales $2,986,117 $ 975,698
Marine operations 2,848,663 2,485,714
Equity in earnings of investee companies 936,908 549,501
Interest income 127,804 91,566
Rental income, net 68,830 59,402
Recreational facilities, net 83,402 40,270
Gain on sale of commercial property 40,508 --
---------- ----------
7,092,232 4,202,151
Costs and expenses:
Cost of homes and homesites sold
and related expenses 2,265,806 728,467
Marine operations 2,001,996 1,734,596
General and administrative 309,715 294,602
Management fees paid to general partner 48,246 37,249
---------- ----------
4,625,943 2,794,914
Net earnings 2,466,289 1,407,237
Net earnings attributable to general partner 942,862 537,670
---------- ----------
Net earnings attributable to limited partners $1,523,427 $ 869,567
========== ==========
Weighted average number of limited
partner units outstanding 416,715 417,183
========== ==========
Net earnings per limited partner unit $ 3.66 $ 2.08
========== ==========
</TABLE>
Page 4 of 11 Pages
<PAGE>
C. THE MARINA LIMITED PARTNERSHIP
Statements of Earnings
Six Months Ended June 30, 1999, and 1998
(Unaudited)
1999 1998
Revenues:
Homes and homesite sales $3,382,117 $2,296,063
Marine operations 3,122,153 2,672,878
Equity in earnings of investee companies 1,063,320 767,164
Interest income 225,745 208,658
Rental income, net 150,663 177,328
Recreational facilities, net 53,925 5,266
Gain on sales of land held for investment
and commercial property 42,508 234,275
---------- ----------
8,040,431 6,361,632
Costs and expenses:
Cost of homes and homesites sold
and related expenses 2,541,156 1,504,095
Marine operations 2,415,822 2,034,228
General and administrative 563,114 544,243
Management fees paid to general partner 52,191 45,093
---------- ----------
5,572,283 4,127,659
Net earnings 2,468,148 2,233,973
Net earnings attributable to general partner 943,573 853,545
---------- ----------
Net earnings attributable to limited partners $1,524,575 $1,380,428
========== ==========
Weighted average number of limited
partner units outstanding 416,715 417,183
========== ==========
Net earnings per limited partner unit $ 3.66 $ 3.31
========== ==========
Page 5 of 11 Pages
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D. THE MARINA LIMITED PARTNERSHIP
Statements of Cash Flows
Six Months Ended June 30, 1999, and 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 2,468,148 $ 2,233,973
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation of properties 249,389 211,935
Equity in earnings of investee companies (1,063,320) (767,164)
Collection of receivables relating to prior
years' homesite sales 175,295 375,754
Receivables on current year's homesite sales (240,133) (153,401)
Gain on sales of land held for investment
and commercial property (42,508) (234,275)
Homes and homesite development costs (808,085) (372,942)
Payments received for homes under construction 942,156 --
Cost of homes and homesites sold 959,784 335,430
Deferred revenues and sale deposits 426,624 538,098
Change in operating assets and liabilities 349,741 (75,468)
Net cash provided by operating activities 3,411,691 2,091,939
----------- -----------
Cash flows from investing activities:
Distributions received from Marina I 343,103 545,463
Repayment of advances to Flatfork Creek Utility 750,000 --
Investment in Dockside Cafe,
net of distributions received -- (20,157)
Additions to marine property and equipment (281,044) (281,440)
Land and land development costs (206,394) (1,801)
Additions to recreational facilities (57,630) 26,229
Proceeds from sales of land held for investment
and commercial property 87,300 237,210
----------- -----------
Net cash provided by investing activities 635,335 493,360
----------- -----------
Cash flows from financing activities:
Distribution to partners (2,597,468) (2,362,973)
----------- -----------
Net cash used in financing activities (2,597,468) (2,362,973)
----------- -----------
Net increase in cash
and cash equivalents 1,454,958 222,326
Cash and cash equivalents at beginning of period 5,960,801 5,531,556
----------- -----------
Cash and cash equivalents at end of period $ 7,415,759 $ 5,753,882
=========== ===========
</TABLE>
Page 6 of 11 Pages
<PAGE>
E. THE MARINA LIMITED PARTNERSHIP
Note to Interim Financial Statements
Three and Six Months Ended June 30, 1999, and 1998
(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 in terim financial statements at June 30, 1999, and for the three and six
months ended June 30, 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 of 11 Pages
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 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 and six month periods ended June 30, 1999 and 1998, the
Partnership sold homesites as follows:
Three Months Six Months
------------ ----------
1999 1998 1999 1998
---- ---- ---- ----
Cambridge 7 1 8 3
Bridgewater 1 1 2 1
Morse Overlook 2 2 3 6
-- -- -- --
10 4 13 10
== == == ==
The Partnership is the general partner of Marina I LP ("Marina I"),
which also develops homesites in Cambridge. During the three and six
month periods ended June 30, 1999 and 1998, Marina I sold homesites
from Cambridge as follows:
June 30
1999 1998
---- ----
2nd Quarter 16 14
==== =====
Six Months 21 21
==== =====
Page 8 of 11 Pages
<PAGE>
Results of Operations
Six Months ended June 30, 1999 Compared to 1998.
Net earnings increased by $234,200 in 1999 from 1998. This increase was
primarily due to increased equity earnings from Marina I of $236,800,
an increase in earnings after direct costs of $68,600 from Marine
operations, and an increase in earning from homes and homesite sales of
$49,000. These increases were partially offset by a decrease in gain on
the sales of investment land and commercial property of $191,800.
The increase in operating income of $68,600 from marine operations is
the result of contributions from substantially all elements of the
marine business.
The Partnership recognized $1,076,000 as its share of the earnings from
Marina I in 1999, compared to $840,000 in 1998. This reflects the shift
in Cambridge homesite sales by Marina I due to the Partnership's
homesites in Cambridge being substantially sold. During the six month
period ended June 30, 1999, Marina I recorded $612,000 in revenue and
$588,000 in profit as its share from the Partnership's sale of six
homesites that were partially owned by Marina I. Accounts payable has
increased by $612,000 at June 30, 1999 as compared to 1998 as a result
of these transactions.
During the second quarter of 1999, the Partnership sold commercial
property for an aggregate $87,300, which resulted in a gain of $42,500.
This compared to a gain of $234,000 in 1998. Earnings from this source
will continue to be irregular since sales of this type property is not
currently the primary focus of the Partnership, and therefore will not
be consistent.
As of June 30, 1999, the Partnership had $556,000 of unamortized
advance dock rentals toward the 1999 boating season. This is compared
to $514,000 as of June 30, 1998. The rental payments are deferred when
received and recognized as earned during the April to September boating
season.
Other receivables and assets were higher on June 30, 1999 compared to
December 31, 1998 due to the seasonal increase in inventory of new and
used boats.
On April 5, 1999, the Partnership made a cash distribution to the
partners of record on March 25, 1999, of $3.85 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 of 11 Pages
<PAGE>
Results of Operations
Three Months ended June 30, 1999 Compared to 1998.
Net earnings increased by $1,059,000 for the second quarter of 1999 as
compared to 1998. This was primarily due to an increase in earnings
from the sale of homes and homesites of $473,000, an increase in equity
earnings from Marina I of $349,000 and an increase in earnings from
Marine operations of $95,000.
Earnings from home and homesite sales were $720,000 in 1999, which
compares to $247,000 in 1998 due to higher sales volume as reflected
in number of homesites sold.
The Partnership recognized $934,000 as its share of the earnings from
Marina I in 1999, compared to $584,000 in 1998.
Factors lending to these increases in earnings during the second
quarter of 1999 compared to 1998 are substantially as discussed
related to the six months ended June 30, 1999.
Computer Systems and Year 2000 Issues
The Partnership is currently modifying its computer systems to provide
a more complete management information system. All current and planned
systems are believed to be year 2000 compliant. The cost of the Year
2000 compliance within this system modification 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.
Page 10 of 11 Pages
<PAGE>
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.
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: August 11, 1999
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
JUNE 30, 1999, 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 7,415,759
<SECURITIES> 0
<RECEIVABLES> 1,790,449
<ALLOWANCES> 0
<INVENTORY> 3,310,240
<CURRENT-ASSETS> 0
<PP&E> 5,860,701
<DEPRECIATION> 249,389
<TOTAL-ASSETS> 22,566,663
<CURRENT-LIABILITIES> 2,089,266
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 20,477,397
<TOTAL-LIABILITY-AND-EQUITY> 22,566,663
<SALES> 5,834,780
<TOTAL-REVENUES> 7,092,232
<CGS> 4,267,802
<TOTAL-COSTS> 4,625,943
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,466,289
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,466,289
<EPS-BASIC> 3.66
<EPS-DILUTED> 3.66
</TABLE>
