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, 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) (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 1 of 11 Pages
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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, 1999, and December 31, 1998 3
B. Statements of Earnings - Comparative three months ended
September 30, 1999, and 1998. 4
C. Statements of Earnings - Comparative nine months ended
September 30, 1999, and 1998. 5
D. Statements of Cash Flows - Comparative nine months ended
September 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
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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, 1999, and December 31, 1998
(Unaudited)
ASSETS 1999 1998
Cash and cash equivalents $ 8,126,509 $ 5,960,801
Receivables from homesite sales 668,608 1,032,963
Other receivables and assets 500,710 415,867
Properties held for sale:
Homes and homesites available for sale 2,415,700 3,256,585
Land and land improvements 946,538 941,116
3,362,238 4,197,701
Property and equipment:
Marine property and equipment,net 3,132,005 3,014,095
Recreational facilities, net 495,404 500,741
Commercial properties, net 2,172,795 2,301,370
5,800,204 5,816,206
Other investments:
Marina I 4,211,665 2,930,267
Investments in and advances to
Flatfork Creek Utility 510,938 1,289,030
$23,180,872 $21,642,835
LIABILITIES AND PARTNERS' EQUITY
Accounts payable $ 826,070 $ 649,690
Accrued bonuses 293,039 104,267
Deferred revenues and sale deposits 202,342 282,161
Total liabilities 1,321,451 1,036,118
Partners' equity:
General partner 8,373,256 7,894,298
Limited partners 13,486,165 12,712,419
TOTAL PARTNERS' EQUITY 21,859,421 20,606,717
$23,180,872 $21,642,835
Page 3 of 11 Pages
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B. THE MARINA LIMITED PARTNERSHIP
Statements of Earnings
Three Months Ended September 30, 1999, and 1998
(Unaudited)
1999 1998
Revenues:
Homes and homesite sales $ 1,141,701 $1,047,161
Marine operations 1,658,075 1,676,652
Equity in earnings of investee companies 533,089 164,324
Interest income 129,560 122,703
Rental income, net 93,562 90,612
Recreational facilities, net 63,740 65,865
3,619,727 3,167,317
Costs and expenses:
Cost of homes and homesites sold
and related expenses 953,905 622,403
Marine operations 939,198 947,965
General and administrative 305,497 245,223
Management fees paid to general partner 39,102 38,493
2,237,702 1,854,084
NET EARNINGS 1,382,025 1,313,233
Net earnings attributable to general partner 528,403 501,717
Net earnings attributable to limited partners $ 853,622 $ 811,516
Weighted average number of limited
partner units outstanding 416,715 417,183
Net earnings per limited partner unit $ 2.05 $ 1.95
Page 4 of 11 Pages
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C. THE MARINA LIMITED PARTNERSHIP
Statements of Earnings
Nine Months Ended September 30, 1999, and 1998
(Unaudited)
1999 1998
Revenues:
Homes and homesite sales $ 4,523,817 $3,343,223
Marine operations 4,780,619 4,339,760
Equity in earnings of investee companies 1,596,409 931,488
Interest income 355,305 331,361
Rental income, net 244,224 267,940
Recreational facilities, net 117,666 78,621
Gain on sales of land held for investment
and commercial property 42,508 234,275
11,660,548 9,526,668
Costs and expenses:
Cost of homes and homesites sold
and related expenses 3,495,061 2,126,528
Marine operations 3,355,411 2,979,913
General and administrative 868,610 789,465
Management fees paid to general partner 91,294 83,586
7,810,376 5,979,492
NET EARNINGS 3,850,172 3,547,176
Net earnings attributable to general partner 1,472,074 1,355,280
Net earnings attributable to limited partners $ 2,378,098 $2,191,896
Weighted average number of limited
partner units outstanding 416,715 417,183
Net earnings per limited partner unit $ 5.71 $ 5.25
Page 5 of 11 Pages
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D. THE MARINA LIMITED PARTNERSHIP
Statements of Cash Flows
Nine Months Ended September 30, 1999, and 1998
(Unaudited)
1999 1998
Cash flows from operating activities:
Net earnings $3,850,172 $ 3,547,176
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation of properties 375,112 317,902
Equity in earnings of investee companies (1,596,409) (931,488)
Collection of receivables relating to prior
years' homesite sales 364,355 629,882
Receivables on current year's homesite sales - (387,374)
Gain on sales of land held for investment
and commercial property (42,508) (234,275)
Homes and homesite development costs (2,314,563) (897,044)
Payments received for homes under construction 832,180 939,600
Cost of homes and homesites sold 2,754,752 490,830
Deferred revenues and sale deposits (79,819) (39,011)
Change in operating assets and liabilities 280,309 345,438
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,423,581 3,781,637
Cash flows from investing activities:
Distributions received from Marina I 343,103 545,463
Advances to Flatfork Creek Utility, net 750,000 (1,350,000)
Distributions received from Dockside Caf<e'> - 60,899
Additions to marine property and equipment (341,064) (532,933)
Land and land development costs (436,908) (1,801)
Additions to recreational facilities & other
Commercial properties (62,836) (27,048)
Proceeds from sales of land held for investment
and commercial property 87,300 237,210
NET CASH PROVIDED (USED) BY INVESTING
ACTIVITIES 339,595 (1,068,210)
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 2,165,708 350,454
Cash and cash equivalents at beginning of period 5,960,801 5,531,556
CASH AND CASH EQUIVALENTS AT END OF PERIOD $8,126,509 $5,882,010
Page 6 of 11 Pages
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E. THE MARINA LIMITED PARTNERSHIP
Note to Interim Financial Statements
Three and Nine Months Ended September 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 interim financial statements at September 30, 1999, and for the three and
nine months ended September 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
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ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 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 nine month periods ended September 30, 1999 and 1998,
the Partnership sold homesites as follows:
THREE MONTHS NINE MONTHS
1999 1998 1999 1998
Cambridge 0 0 8 3
Bridgewater 0 0 2 1
Morse Overlook 2 5 5 11
2 5 15 15
The Partnership is the general partner of Marina I LP ("Marina I"), which
also develops homesites in Cambridge. During the three and nine month
periods ended September 30, 1999 and 1998, Marina I sold homesites from
Cambridge as follows:
1999 1998
Three Months 12 4
Nine Months 33 25
RESERVOIR WATER LEVELS
MARINE OPERATIONS
During the period ended September 30, 1999 the precipitation experienced in the
Morse and Geist Lakes area was insufficient to maintain the water at normal
levels. Such condition had a minimal impact on the Partnerships' marine
operations in that period and will not significantly impact the fourth quarter
of 1999 or the first quarter of 2000. However, if precipitation is
insufficient to return the water to substantially normal levels by early
spring, the Partnerships' Marine results of operations in the year 2000 would
be adversely affected. In certain previous years the reservoirs have
experienced inadequate precipitation to maintain the water level but the
reservoirs have always returned to normal levels in the spring. However, there
is no assurance that the same pattern will be repeated.
HOMESITE SALES
Because of the low water level described in the preceding paragraph, should the
reservoirs not return to substantially normal levels, there may be an adverse
impact on water oriented homesite sales.
Page 8 of 11 Pages
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RESULTS OF OPERATIONS
Nine Months ended September 30, 1999 Compared to 1998.
Net earnings increased by $303,000 in 1999 from 1998. This increase was
primarily due to increased equity earnings from Marina I of $655,000. This
increase was partially offset by a decrease in earnings from homes and
homesite sales of $187,900 and a decrease in gain on the sales of
investment land and commercial property of $191,800.
The Partnership recognized $1,624,000 as its share of the earnings from
Marina I in 1999, compared to $969,000 in 1998. This reflects the shift
to Marina I of Cambridge homesite sales due to the Partnership's homesites
in Cambridge being substantially sold. During the nine month period ended
September 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 at September
30, 1999 as compared to 1998 as a result of these transactions.
During the nine month period ended September 30, 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.
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 $2,597,468. This compares to a cash distribution of $3.50
per partnership unit on April 3, 1998.
Page 9 of 11 Pages
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RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO 1998.
Net earnings increased by $68,800 for the third quarter of 1999 as
compared to 1998. This was primarily due to an increase in equity earnings
from Marina I of $418,000 offset by a decrease in earnings from the sale of
homes and homesites of $237,000.
Earnings from home and homesite sales were $188,000 in 1999, which
compares to $425,000 in 1998. This decrease is attributed to a higher
percentage of revenue from home sales with a lower gross profit margin
than from homesite sales.
The Partnership recognized $548,000 as its share of the earnings from
Marina I in 1999, compared to $130,000 in 1998.
Factors leading to these increases in earnings during the third quarter of
1999 compared to 1998 are substantially as discussed related to the nine
months ended September 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
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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: November 15, 1999
Page 11 of 11 Pages
*** Conversion terminated at this point (TRIAL version of software).
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<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, 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 8,126,509
<SECURITIES> 0
<RECEIVABLES> 1,169,318
<ALLOWANCES> 0
<INVENTORY> 3,362,238
<CURRENT-ASSETS> 0
<PP&E> 5,800,204
<DEPRECIATION> 375,112
<TOTAL-ASSETS> 23,180,872
<CURRENT-LIABILITIES> 1,321,451
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<COMMON> 0
<OTHER-SE> 21,859,421
<TOTAL-LIABILITY-AND-EQUITY> 23,180,872
<SALES> 9,304,436
<TOTAL-REVENUES> 11,660,548
<CGS> 6,850,472
<TOTAL-COSTS> 7,810,376
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