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 MARCH 31, 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.
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FLORIDA INCOME FUND III, L.P.
INDEX
PART I PAGE NO.
FINANCIAL INFORMATION
Balance Sheets at March 31, 1996
and December 31, 1995 . . . . . . . . . . . . . . . . . . .3
Statements of Income for the Three
Months Ended March 31, 1996 and 1995. . . . . . . . . . . .4
Statements of Cash Flows for the Three
Months Ended March 31, 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<PAGE>
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<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
BALANCE SHEETS (Unaudited)
Mar 31 Dec 31
1996 1995
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash 746,777 164,966
Accts Receivable Trade, Net of Allowance
for Doubtful Accounts of $8,500 for
3/31/96 and $8,500 for 12/31/95 421,347 351,231
Notes Receivable -0- 3,038
Inventory 53,688 58,311
Prepaid Expenses and Other 160,532 169,346
___________ _________
Total Current Assets 1,382,344 746,892
Rental Properties, (Net of
accumulated depreciation of
$3,849,181 at 3/31/96
$3,658,502 at 12/31/95 18,683,510 18,762,415
Intangible Assets
Deferred Loan and
Organizational Costs Net 75,279 81,288
__________ ___________
Total Assets 20,141,133 19,590,595
LIABILITIES & PARTNERS' CAPITAL
Current Liabilities
Current Maturities of Notes
and Mortgages Payable 340,600 348,033
Accounts Payable, Trade 202,096 401,490
Accrued Expenses 675,141 415,822
Customer and Security Deposits 360,664 534,312
___________ __________
Total Current Liabilities 1,578,501 1,699,657
Mortgages Payable, Less Current Maturities 8,882,751 8,967,261
PARTNERS' CAPITAL
General Partners Capital (37,551) (37,551)
Limited Partners Capital 8,758,869 8,961,228
Net Income 958,563 0
__________ ___________
Total Partners' Equity 9,679,881 8,923,677
Total Liabilities and Partners' Capital 20,141,133 19,590,595
</TABLE>
See Accompanying Notes to the Financial Statements
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<TABLE>
<CAPTION>
FLORIDA INCOME FUND III, LIMITED PARTNERSHIP
STATEMENTS OF INCOME
(Unaudited)
For Three Months Ended
03/31/96 03/31/95
_________ _________
<S> <C> <C>
REVENUES:
Rental Income 3,541,241 3,162,305
Interest Income 4,840 11,279
__________ __________
Total Revenues 3,546,081 3,173,584
COSTS AND EXPENSES:
Property Operating Expenses 2,071,562 1,812,259
Real Estate Taxes 69,315 69,429
Interest Expense 239,792 329,140
Depreciation 202,670 172,800
Amortization 4,179 14,689
__________ __________
Total Expenses 2,587,518 2,398,317
Net Income 958,563 775,267
</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 Three Months Ended
3/31/96 3/31/95
_________ __________
<S> <C> <C>
Cash flows from operating activities:
Net Income 958,563 775,269
Adjustments to reconcile net income to
net cash provided by operations:
Depreciation & Amortization 206,849 187,489
(Increase) decrease in Accts recvble ( 67,078) ( 119,684)
Prepaid expenses and other 10,644 3,845
Inventory 4,623 ( 2,185)
Increase (decrease) in:
Accounts payable and Accrued expense 59,925 ( 622,818)
Customer & security deposits (173,648) ( 45,598)
Deferred Income 0 2,358,067
_________ __________
Net Cash flows provided by operating
activities 999,878 2,534,385
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 (123,765) ( 104,196)
_________ ___________
Net cash used in investing activities (123,765) 4,458,817
Cash flows from financing activities:
Loan Origination Fee paid 0 ( 7,527)
Partner distributions paid (202,359) ( 73,585)
Repayment of long term borrowing ( 91,943) (7,599,354)
Proceeds from long term borrowing 0 1,523,558
Net cash flows used by financing
activities (294,302) (6,156,908)
Net increase (decrease) in cash 581,811 836,294
Cash December 31 164,966 414,944
Cash March 31 746,777 1,251,238
</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
MARCH 31, 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 $792,025 were incurred during the first quarter of
1996. This compares to $677,950 of costs that were incurred during the
first 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
$208,260 in management fees in accordance with the Partnership
agreement. This compares to $184,024 in management fees which were
incurred during the first 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
March 31, 1996, was $746,777. This compares to its cash position of
$164,966 at December 31, 1995. The Partnership's cash position at March
31, 1995, was $1,251,238.
PAGE 6<PAGE>
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Liquidity - Continued
For the three months ended March 31, 1996, the Partnership's cash
increased $581,811. The increase in cash was due to cash flow from
operations of $999,878; cash outlays for capital improvements of
$123,765; cash outlays for partner distributions of $202,359; and net
repayment of long term debt of $91,943.
The Partnership's total investment in properties for its portfolio at
March 31, 1996, was $22,532,691. 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 $91,943 of principal on long term borrowings
during the three month period. Partnership debt as of March 31, 1996,
was $9,223,351 as compared to $9,315,294 as of December 31, 1995.
Also during the quarter, the Partnership paid $123,765 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 $958,563 for the three months ended
March 31, 1996. This compares with net income of $775,269 for the three
month period ended March 31, 1995. The increase in net income is due to
revenues increasing by $372,497, property operating expenses increasing
by $259,303, real estate taxes decreasing by $114, interest expense
decreasing by $89,348 and depreciation and amortization increasing by
$19,360.
PAGE 7<PAGE>
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Results of Operations - Continued
Pink Shell's revenues increased $404,093 due to more units being
available to rent. Room revenue increased $383,778, store revenue
decreased $7,606, and other revenues increased $34,116. Walsingham
Commons revenues decreased $31,596 due to a decrease in occupancy.
Interest income decreased $6,198 due to a smaller amount of funds being
invested in short term Government Securities.
Property operating expenses have increased for the quarter by $258,303.
The Primary increases are in the operations of the Pink Shell.
Guaranteed payments to owners have increased $160,661 compared to the
first quarter of 1995. This is due to the lease back agreements signed
with the 42 unit condominium owners. Marketing expenses have increased
$13,252 due to more units to market, and insurance has increased
$17,653. 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 $114 to reflect a lower assessment at
Walsingham Commons.
Interest expense decreased by $89,348 due to the Partnership having a
lower amount of debt.
Depreciation and amortization have increased $29,870 because of
additional assets being depreciated and loan costs being written off.
As of March 31, 1996, Walsingham Commons Shopping Center was 85% 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.
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>
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)
May 8, 1996
5/8/96 Lawrence A. Raimondi
President and Director, and CEO
Mariner Capital Management, Inc.
(Principal Executive Officer)
(SIGNATURE)
5/8/96 Joe K. Blacketer
Secretary/Treasurer
Mariner Capital Management, Inc.
(Principal Financial and
Accounting Officer)
(SIGNATURE)
PAGE 10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 746,777
<SECURITIES> 0
<RECEIVABLES> 429,847
<ALLOWANCES> 8,500
<INVENTORY> 53,688
<CURRENT-ASSETS> 1,382,344
<PP&E> 22,532,691
<DEPRECIATION> 3,849,181
<TOTAL-ASSETS> 20,141,133
<CURRENT-LIABILITIES> 1,578,501
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 20,141,133
<SALES> 3,541,241
<TOTAL-REVENUES> 3,546,081
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,347,726
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 239,792
<INCOME-PRETAX> 958,563
<INCOME-TAX> 0
<INCOME-CONTINUING> 958,563
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 958,563
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
