FLORIDA INCOME FUND III, L.P.
INDEX
PART I PAGE NO.
FINANCIAL INFORMATION
Balance Sheets at September 30, 1995
and December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Statements of Income for the Three and Nine
Months Ended September 30, 1995 and 1994. . . . . . . . . . . . . . . . . 3
Statements of Cash Flows for the Three and Nine
Months Ended September 30, 1995 and 1994. . . . . . . . . . . . . . . . . 4
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . 5
Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . . . . 5-9
PART II
OTHER INFORMATION
Items 1 through 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
PART III
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
COVER PAGE
EXHIBIT 27 - Financial Data Schedule
Page 1
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PART I - FINANCIAL INFORMATION
FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
BALANCE SHEETS (Unaudited)
Sept. 30 Dec. 31
1995 1994
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash 740,174 414,944
Restricted Cash -0- 1,899,357
Accounts Receivable Trade, Net of Allowance
for Doubtful Accounts of $0 for 9/30/95
and $0 for 12/31/94 195,556 205,433
Notes Receivable -0- 3,795
Inventory 54,556 67,373
Prepaid Expenses and Other 205,868 133,428
Total Current Assets 1,196,154 2,724,330
Work in Progress, Condominium
Units Under Contract -0- 5,686,698
Rental Properties, (Net of
accumulated depreciation of
$3,485,720 at 9/30/95
$2,967,321 at 12/31/94 20,115,670 20,555,638
Intangible Assets
Deferred Loan and
Organizational Costs Net 89,083 111,832
Total Assets 21,400,907 29,078,498
LIABILITIES & PARTNERS' CAPITAL
Current Liabilities
Current Maturities of Notes
and Mortgages Payable 300,417 796,443
Accounts Payable, Trade 281,694 1,156,198
Accounts Payable, Construction -0- 1,123,685
Accrued Expenses 481,942 370,349
Due to General Partner -0- 25,000
Customer and Security Deposits 404,644 357,841
Customer Deposits, Condominium Units -0- 1,899,357
Deferred Gain on Condominium Sales 2,232,170 -0-
Total Current Liabilities 3,700,867 5,728,873
Mortgages Payable, Less Current Maturities 9,093,744 14,806,836
PARTNERS' CAPITAL
General Partners Capital (48,166) (48,166)
Limited Partners Capital 8,112,653 8,590,955
Net Income 541,809 -0-
Total Partners' Equity 8,606,296 8,542,789
Total Liabilities and
Partners' Capital 21,400,907 29,078,498
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See Accompanying Notes to the Financial Statements
PAGE 2<PAGE>
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FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
STATEMENTS OF INCOME
(Unaudited)
For Three Months Ended For Nine Months Ended
09/30/95 09/30/94 09/30/95 09/30/94
<S> <C> <C> <C> <C>
REVENUES:
Rental Income 1,757,161 1,254,773 7,399,567 5,508,187
Gain from Condominium
Building 58,626 -0- 136,796 -0-
Interest Income 14,678 1,453 46,189 7,657
Total Revenues 1,830,465 1,256,226 7,582,552 5,515,844
COSTS AND EXPENSES:
Property Operating
Expenses 1,696,851 1,197,066 5,450,521 3,906,125
Real Estate Taxes 69,429 79,007 208,287 230,333
Interest Expense 242,516 303,594 832,773 914,214
Depreciation 172,800 156,939 518,400 470,817
Amortization 8,279 7,227 30,762 21,605
Total Expenses 2,189,875 1,743,833 7,040,743 5,543,094
Net Income (Loss) (359,410) (487,607) 541,809 (27,250)
</TABLE>
See Accompanying Notes to the Financial Statements
PAGE 3<PAGE>
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FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)
For The Nine Months Ended
9/30/95 9/30/94
<S> <C> <C>
Cash flows from operating activities:
Net Income 541,809 ( 27,250)
Adjustments to reconcile net income to
net cash provided by operations:
Depreciation & Amortization 549,162 492,422
(Increase) decrease in
Accounts receivable 13,672 91,525
Prepaid expenses and other ( 72,440) 5,866
Inventory 12,817 ( 5,301)
Increase (decrease) in:
Accounts payable and
Accrued expense ( 787,912) 421,954
Customer & security deposits 46,803 ( 153,267)
Deferred Income 2,232,170 -0-
Net Cash flows provided by operating activities 2,536,081 825,949
Cash flows from investing activities:
Cost of condominiums sold 7,260,526 -0-
Cost of condominium construction (2,697,513) -0-
Acquisition of and improvements to
rental properties ( 78,431) (1,920,600)
Net cash used in investing activities 4,484,582 (1,920,600)
Cash flows from financing activities:
Loan Origination Fee paid ( 8,013) ( 155,613)
Partner distributions paid ( 478,302) ( 441,985)
Repayment of long term borrowing (6,209,118) ( 369,763)
Proceeds from long term borrowing -0- 1,927,789
Net cash flows used by financing activities (6,695,433) 960,428
Net increase (decrease) in cash 325,230 134,223
Cash December 31 414,944 162,263
Cash September 30 740,174 28,040
</TABLE>
See Accompanying Notes to the Financial Statements
PAGE 4<PAGE>
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FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENT
SEPTEMBER 30, 1995
(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 a 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,
1994. In management's opinion, all adjustments have been made to the
financial statements necessary for a fair presentation of interim
periods presented.
NOTE 2 - RELATED PARTY TRANSACTIONS
The General Partner 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 $783,090 were incurred during the third quarter of
1995. This compares to $600,326 of costs that were incurred during
the third quarter of 1994. The increase in cost is primarily due to
increases in payroll costs, health insurance premiums and reservation
expense. An affiliate company, South Seas Resorts Company, Inc., pays
the payroll and related benefits and charges them back to the Pink
Shell. South Seas Resorts Company, Inc. also provides room
reservation services for the resort. During the quarter, the
Partnership incurred $109,678 in management fees in accordance with
the Partnership agreement. This compares to $73,708 in management
fees which were incurred during the third quarter of 1994.
NOTE 3 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity
The Partnership's cash position, including interest bearing deposits
at September 30, 1995, was $740,174. This compares to its cash
position of $414,944 at December 31, 1994. The Partnership's cash
position at September 30, 1994, was $28,040.
PAGE 5<PAGE>
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Liquidity - Continued
For the nine months ended September 30, 1995, the Partnership's cash
increased $325,230. The increase in cash was due to cash flow from
operations of $152,850; cash outlays for capital improvements of
$78,431; cash outlays for partner distributions of $478,302; net
repayment of long term debt of $6,209,118; loan origination fees paid
of $8,013 and an increase of cash due to the 42 unit condominium
buildings of $6,946,244.
During the first quarter of 1995, the Partnership closed all 42 units
on it's condominium project. The Partnership received gross proceeds
of $9,618,593 from the sale of the 42 unit building. The Partnership
expended an additional $2,672,349 in costs to fund the remaining
construction of the building. These proceeds were used to pay down
the construction loan in the amount of $5,230,758 and the first
mortgage loan in the amount of $1,636,983 and the $700,000 loan from
an affiliate. The Partnership received $1,523,558 in additional
proceeds in order to fund the condominium project.
The Partnership intends to use this cash to make partner
distributions, capital improvements to the properties and as working
capital reserve. The Partnership's total investment in properties for
its portfolio at September 30, 1995, was $23,601,390. This compares
to its total property investment of $23,522,959 at December 31, 1994.
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
During 1994, the Partnership began construction on a 42 unit
condominium building which was completed in February 1995. As of
March 31, 1995, the Partnership had closed on all 42 units. The total
sales price of the project was $9,618,593. The total cost of the
project was $7,235,362 (which includes land and building allocations)
resulting in a gain of $2,383,231. This gain will be reported under
the sales lease back rules.
The Partnership has entered into long term leases with each of the 42
unit owners. This enables the Partnership to include the 42 units in
its resort rental operation. The Partnership pays a minimum annual
rental of $25,000 in 12 equal monthly installments. In addition, the
Partnership pays the owner an amount by which 42.5% of the annual
gross rental income generated by the lessee from the unit exceeds the
amount of annual base rent paid. These leases expire at various times
between December 31, 2000, and December 31, 2005.
PAGE 6<PAGE>
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Liquidity - Continued
In addition to the construction loan being paid off in the amount of
$5,230,758, the first mortgage was also paid down by $1,636,983 and
the $700,000 loan from an affiliate was paid off. The Partnership
also paid down $164,935 of principal on the Pink Shell Resort's debt.
Partnership debt as of September 30, 1995, was $9,394,161 as compared
to $15,603,279 as of December 31, 1994 and $13,144,898 as of September
30, 1994.
Also during the nine months ended September 30, 1995, the Partnership
paid $78,431 for improvements. These improvements were spent at the
Pink Shell in order to refurbish the units and to meet Best Western
requirements.
Results of Operations
The Partnership had net income of $541,809 for the nine months ended
September 30, 1995. This compares with net loss of $27,250 for the
nine month period ended September 30, 1994. The increase in net
income was due to revenues increasing by $2,066,708, property
operating expenses increasing by $1,544,396, real estate taxes
decreasing by $22,046 interest expense decreasing by $81,441 and
depreciation and amortization increasing by $56,740.
For nine months ended September 30, 1995, total rental revenue
increased $1,891,380. Pink Shell's revenues increased $1,887,773 due
to more units being available to rent. Room revenue increased
$1,667,717, store revenue increased $199,390, and other revenues
increased $20,666. Walsingham Commons revenues increased $3,607 due
to an increase in occupancy and rental rate increases. The
Partnership recognized $136,796 of income from the Condominium
Building. For financial reporting purposes, the leases are treated as
operating leases and, accordingly, the gain will be recognized over
the life of the leases. Interest income increased $38,532 due to a
larger amount of funds being invested in short term Government
Securities. The Pink Shell rented 8,826 more rooms in the first nine
months of 1995 as compared to 1994 at an average daily rate of $141.85
verses $131.74.
PAGE 7<PAGE>
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Results of Operations - Continued
For the nine months ended September 30, 1995, property operating
expenses have increased by $1,544,396. The primary increases are in
the operations of the Pink Shell. Guaranteed payments to owners have
increased $645,200 as compared to the first nine months of 1994. This
is due to the lease back agreements signed with the 42 unit
condominium owners. Marketing expenses have increased $194,300 due to
more units to market and Best Western affiliation fees. Reservations
costs have increased $220,200 due to higher usage of travel agents,
and reservation staff. Other operating expense increases are in
relation to the increased occupancy and room revenue. The resort has
moved to daily housekeeping in order to meet guest expectations and
Best Western affiliation requirements.
Real Estate Taxes have decreased $22,046 to reflect a lower assessment
at Walsingham Commons.
Interest expense decreased by $81,441 due to the Partnership having
paid down its short term loan of $700,000 and by paying an additional
amount on its first mortgage from the condominiums closing.
Depreciation and amortization have increased $56,740 because of
additional assets being depreciated and loan costs being written off.
As of September 30, 1995, Walsingham Commons Shopping Center was 88%
leased which includes the vacated Tandy Corporation space as occupied
since they continue to pay rent. The center is actually 65% occupied.
Management expects to continue to receive full lease payments until
either a negotiated settlement or sub-lease is agreed to.
For the three months ended September 30, 1995, and 1994 rental income
increased $561,014 and interest income increased $13,225. This
increase is due to Pink Shell's revenues increasing $571,912 and
Walsingham Commons decreasing $10,898. Pink Shell's revenues
increased because the property had an additional 42 units to rent and
the property was being renovated in 1994.
Property operating expenses have increased for the quarter by $499,785
primarily because of increased occupancy at the Pink Shell.
Real Estate Taxes have decreased $9,578 to reflect a lower assessment
at Walsingham Commons.
Interest expense has decreased $61,078 due to the pay down of debt as
of September 30, 1995. Partnership debt at September 30, 1995, was
$9,394,161 and $13,144,898 at September 30, 1994.
PAGE 8<PAGE>
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Results of Operation - Continued
Depreciation and amortization have increased $16,913 from the three
months ended September 30, 1995, because of additional improvements
being written off.
PAGE 9<PAGE>
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PART II
OTHER INFORMATION
FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
ITEM 1. LEGAL PROCEEDINGS
None
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 10<PAGE>
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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 III, LIMITED PARTNERSHIP
MARINER CAPITAL MANAGEMENT, INC.
MANAGING GENERAL PARTNER
(Registrant)
November 8, 1995
11/6/95 Lawrence A. Raimondi
President and Director, and CEO
Mariner Capital Management, Inc.
(Principal Executive Officer)
(SIGNATURE)
11/6/95 Michael J. Scullion
Secretary/Treasurer
Mariner Capital Management, Inc.
(Principal Financial and
Accounting Officer)
(SIGNATURE)
PAGE 11<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 740,174
<SECURITIES> 0
<RECEIVABLES> 195,556
<ALLOWANCES> 0
<INVENTORY> 205,868
<CURRENT-ASSETS> 1,196,159
<PP&E> 23,601,390
<DEPRECIATION> 3,485,720
<TOTAL-ASSETS> 21,400,907
<CURRENT-LIABILITIES> 3,700,867
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 21,400,907
<SALES> 7,582,552
<TOTAL-REVENUES> 7,582,552
<CGS> 0
<TOTAL-COSTS> 6,207,970
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 832,773
<INCOME-PRETAX> 541,809
<INCOME-TAX> 0
<INCOME-CONTINUING> 541,809
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 541,809
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
