UNITED STATES
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 THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
Commission File Number: 33-19152
Exact name of Registrant as specified in its charter:
Florida Income Fund III, Limited Partnership
State or other Jurisdiction of incorporation or organization:
Delaware
I.R.S. Employer Identification Number: 65-0016187
Address of Principal Executive Offices:
12800 University Drive, Ste 675
Fort Myers, FL 33907
Registrant's Telephone Number, including Area Code:
(941) 481-2011
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
The registrant 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 has been subject to such filing requirements for the past 90 days.
PAGE 1
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FLORIDA INCOME FUND III, L.P.
INDEX
PART I PAGE NO.
FINANCIAL INFORMATION
Balance Sheets at September 30, 1996
and December 31, 1995. . . . . . . . . . . . . . . . . . . . . . . . . 3
Statements of Income for the Three and Nine
Months Ended September 30, 1996 and 1995 . . . . . . . . . . . . . . . 4
Statements of Cash Flows for the Nine
Months Ended September 30, 1996 and 1995 . . . . . . . . . . . . . . . 5
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . . . . . . . 6-8
PART II
OTHER INFORMATION
Items 1 through 6. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
PART III
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
COVER PAGE
EXHIBIT 27 - Financial Data Schedule
Page 2
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<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
BALANCE SHEETS (Unaudited)
Sept 30 Dec. 31
1996 1995
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash 69,218 164,966
Accts Receivable Trade, Net of Allowance
for Doubtful Accounts of $24,443 for
9/30/96 and $8,500 for 12/31/95 186,573 351,231
Notes Receivable -0- 3,038
Inventory 62,732 58,311
Prepaid Expenses and Other 217,427 169,346
___________ __________
Total Current Assets 535,950 746,892
Rental Properties, (Net of
accumulated depreciation of
$4,273,543 at 9/30/96
$3,658,502 at 12/31/95 18,401,919 18,762,415
Intangible Assets
Deferred Loan and
Organizational Costs Net 59,691 81,288
__________ __________
Total Assets 18,997,560 19,590,595
LIABILITIES & PARTNERS' CAPITAL
Current Liabilities
Current Maturities of Notes
and Mortgages Payable 3,548,276 348,033
Accounts Payable, Trade 226,177 401,490
Accrued Expenses 562,776 415,822
Customer and Security Deposits 364,020 534,312
__________ __________
Total Current Liabilities 4,701,249 1,699,657
Mortgages Payable Less Current Maturities 5,504,651 8,967,261
PARTNERS' CAPITAL
General Partners Capital (37,551) (37,551)
Limited Partners Capital 8,352,951 8,961,228
Net Income 476,260 0
__________ ___________
Total Partners' Equity 8,791,660 8,923,677
Total Liabilities and Ptnrs' Capital 18,997,560 19,590,595
</TABLE>
See Accompanying Notes to the Financial Statements
PAGE 3<PAGE>
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<TABLE>
<CAPTION>
FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
STATEMENTS OF INCOME
(Unaudited)
For Three Months Ended For Nine Months Ended
09/30/96 09/30/95 09/30/96 09/30/95
<S> <C> <C> <C> <C>
REVENUES:
Rental Income 1,831,316 1,757,161 7,972,328 7,399,567
Gain from Condominium
Building -0- 58,626 -0- 136,796
Interest Income 6,224 14,678 16,577 46,189
Total Revenues 1,837,540 1,830,465 7,988,905 7,582,552
COSTS AND EXPENSES:
Property Operating
Expenses 1,857,818 1,696,851 5,950,249 5,450,521
Real Estate Taxes 70,012 69,429 209,338 208,287
Interest Expense 232,745 242,516 706,259 832,773
Depreciation 215,796 172,800 634,263 518,400
Amortization 4,179 8,279 12,536 30,762
Total Expenses 2,380,550 2,189,875 7,512,645 7,040,743
Net Income (Loss) (543,010) (359,410) 476,260 541,809
</TABLE>
See Accompanying Notes to the Financial Statements
PAGE 4<PAGE>
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<TABLE>
<CAPTION>
FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)
For The Nine Months Ended
9/30/96 9/30/95
_________ __________
<S> <C> <C>
Cash flows from operating activities:
Net Income 476,260 541,809
Adjustments to reconcile net income to
net cash provided by operations:
Depreciation & Amortization 646,799 549,162
(Increase) decrease in Accts recvble 167,696 13,672
Prepaid expenses and other (26,484) (72,440)
Inventory (4,421) 12,817
Increase (decrease) in:
Accounts payable and Accrued expense (28,359) (787,912)
Customer & security deposits (170,292) 46,803
Deferred Income 0 2,232,170
_________ __________
Net Cash flows provided by operating
activities 1,061,199 2,536,081
Cash flows from investing activities:
Cost of condominiums sold 0 7,260,526
Cost of condominium construction 0 (2,697,513)
Acquisition of and improvements to
rental properties (286,303) (78,431)
__________ ___________
Net cash used in investing activities (286,303) 4,484,582
Cash flows from financing activities:
Loan Origination Fee paid 0 (8,013)
Partner distributions paid (608,277) (478,302)
Repayment of long term borrowing (262,367) (6,209,118)
__________ ___________
Net cash flows used by financing
activities (870,644) (6,695,433)
Net increase (decrease) in cash (95,748) 325,230
Cash December 31 164,966 414,944
Cash September 30 69,218 740,174
</TABLE>
See Accompanying Notes to the Financial Statements
PAGE 5<PAGE>
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FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(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,
1995. 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 $1,039,546 were incurred during the third quarter
of 1996. This compares to $783,090 of costs that were incurred during
the third quarter of 1995. 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 $102,336 in management fees in accordance with
the Partnership agreement. This compares to $109,678 in management
fees which were incurred during the third quarter of 1995.
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, 1996, was $69,218. This compares to its cash
position of $164,966 at December 31, 1995. The Partnership's cash
position at September 30, 1995, was $740,174.
PAGE 6
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Liquidity - Continued
For the nine months ended September 30, 1996, the Partnership's cash
decreased $95,748. The decrease in cash was due to cash flow from
operations of $1,061,199; cash outlays for capital improvements of
$286,303; cash outlays for partner distributions of $608,277; and net
repayment of long term debt of $262,367.
The Partnership's total investment in properties for its portfolio at
September 30, 1996, was $22,675,462. This compares to its total
property investment of $22,420,917 at December 31, 1995. 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
The Partnership has entered into long term leases with 42 condominium
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 to each unit owner
for a total minimum annual rental of $1,050,000. 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.
The Partnership paid down $262,367 of principal on long term
borrowings during the nine month period. Partnership debt as of
September 30, 1996, was $9,052,927 as compared to $9,315,294 as of
December 31, 1995.
Also during the nine months, the Partnership paid $286,303 for
improvements 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 $476,260 for the nine months ended
September 30, 1996. This compares with net income of $541,809 for the
nine month period ended September 30, 1995. The decrease in net
income is due to revenues increasing by $406,353; property operating
expenses increasing by $499,728, real estate taxes increasing by
$1,051, interest expense decreasing by $126,514 and depreciation and
amortization increasing by $97,637.
PAGE 7<PAGE>
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Results of Operations - Continued
Pink Shell's revenues increased $406,303 due to more units being
available to rent. Room revenue increased $530,065, store revenue
decreased $17,528, and other revenues decreased $76,622. Interest
income decreased $29,612 due to a smaller amount of funds being
invested in short term Government Securities.
Property operating expenses have increased for the quarter by
$499,728. The Primary increases are in the operations of the Pink
Shell. Guaranteed payments to owners have increased $172,836 compared
to the first nine months of 1995. This is due to the lease back
agreements signed with the 42 unit condominium owners. Insurance has
increased $121,787. 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 increased $1,051 to reflect a higher assessment
at Walsingham Commons.
Interest expense decreased by $126,514 due to the Partnership having a
lower amount of debt.
Depreciation and amortization have increased $97,637 because of
certain new assets starting to be depreciated.
As of September 30, 1996, Walsingham Commons Shopping Center was 68%
occupied.
PAGE 8<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 9<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)
10/29/96 By: /s/ LAWRENCE A. RAIMONDI
--------------------------------
Lawrence A. Raimondi
President, Director and CEO
Mariner Capital Management, Inc.
(Principal Executive Officer)
10/29/96 By: /s/ JOE K. BLACKETER
--------------------------------
Joe K. Blacketer
Secretary/Treasurer
Mariner Capital Management, Inc.
(Principal Financial and Accounting
Officer)
PAGE 10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 69,218
<SECURITIES> 0
<RECEIVABLES> 211,016
<ALLOWANCES> 24,443
<INVENTORY> 62,732
<CURRENT-ASSETS> 535,950
<PP&E> 22,675,462
<DEPRECIATION> 4,273,543
<TOTAL-ASSETS> 18,997,560
<CURRENT-LIABILITIES> 4,701,249
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 18,997,560
<SALES> 7,972,328
<TOTAL-REVENUES> 7,988,905
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,806,386
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 706,259
<INCOME-PRETAX> 476,260
<INCOME-TAX> 0
<INCOME-CONTINUING> 476,260
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 476,260
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
