UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR PERIOD ENDING MARCH 31, 1997
Commission File Number:
33-04345
Exact name of Registrant as specified in its charter:
Florida Income Fund II, Limited Partnership
State or other Jurisdiction of incorporation or organization:
Ohio
I.R.S. Employer Identification Number:
33-1168320
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.
FLORIDA INCOME FUND II, L.P.
INDEX
PAGE NO.
PART I
FINANCIAL INFORMATION
Balance Sheets at March 31 1997
and December 31, 1996. . . . . . . . . . . . . . . . . .3
Statements of Income for the Three
Months Ended March 31, 1997 and 1996 . . . . . . . . . .4
Statements of Cash Flows for the Three
Months Ended March 31, 1997 and 1996 . . . . . . . . . .5
Notes to Financial Statements. . . . . . . . . . . . . .6
Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . .6-8
Other Information. . . . . . . . . . . . . . . . . . . .9
Signatures . . . . . . . . . . . . . . . . . . . . . . 10
Cover Page
Exhibit 27 - Financial Data Schedule
PAGE 2
PART I - FINANCIAL INFORMATION
FLORIDA INCOME FUND II, LIMITED PARTNERSHIP
BALANCE SHEETS
(Unaudited)
March 31, Dec. 31,
1997 1996
__________ _________
ASSETS
CURRENT ASSETS
Cash 236,380 251,866
A/R Trade, Net of allowance for 65,468 32,004
doubtful accounts of $102,146
for March 31, 1997 and $102,146
for December 31, 1996)
Notes Receivable 26,785 44,877
Prepaid Expenses and Other 30,358 14,391
_________ _________
Total Current Assets 358,991 343,138
RENTAL PROPERTIES, NET OF
ACCUMULATED DEPRECIATION OF
$1,949,040 AT MARCH 31, 1997 AND
$1,895,885 AT DECEMBER 31, 1996 5,075,624 5,128,779
INTANGIBLE ASSETS
Deferred Loan Costs, Net 17,043 20,050
_________ _________
TOTAL ASSETS 5,451,658 5,491,967
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES
Current Maturities of Notes
and Mortgages Payable 24,510 24,510
Accounts Payable 10,287 17,664
Accrued Expenses 36,432 10,486
Customer & Security Deposits 53,824 53,825
Deposit on Sale 0 0
_________ _________
TOTAL CURRENT LIABILITIES 125,053 106,485
NOTES AND MORTGAGES PAYABLE 2,449,702 2,455,700
PARTNERS' CAPITAL
General Partners' Capital (39,621) (39,621)
Limited Partners' Capital 2,890,892 2,969,403
Net Income 25,632 0
_________ _________
TOTAL PARTNERS' EQUITY 2,876,903 2,929,782
TOTAL LIABILITIES
AND PARTNERS' CAPITAL 5,451,658 5,491,967
See Accompanying Notes to the Financial Statements
PAGE 3
FLORIDA INCOME FUND II, LIMITED PARTNERSHIP
STATEMENTS OF INCOME
(Unaudited)
For Three Month Ended
03/31/97 03/31/96
_________ _________
REVENUES:
Sales Proceeds 0 1,950,000
Rental Income 246,989 670,354
Interest Income 674 826
_______ _________
Total Revenues 247,663 2,621,180
EXPENSES:
Cost of Sales & Closing Costs 0 1,601,791
Property Operating Expenses 79,996 249,186
Real Estate Taxes 31,662 50,571
Interest Expense 54,211 229,131
Depreciation 53,154 118,308
Amortization 3,008 11,017
_______ _________
Total Expenses 222,031 2,260,004
NET INCOME 25,632 361,176
See accompanying Notes to the Financial Statements
PAGE 4
FLORIDA INCOME FUND II, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)
For Three Months Ended
03/31/97 03/31/96
________ _________
Cash Flows From Operating Activities:
Net Income 25,632 361,176
Adjustments to reconcile net income
to net cash provided by operations:
Depreciation & Amortization 56,162 129,325
Cost of Sales 0 1,521,791
(Increase) decrease in receivables (15,372) 29,109
(Increase) decrease in prepaid
expenses and other (15,967) (30,904)
Increase (decrease) accounts payable
and accrued expenses 18,568 (54,618)
Increase (decrease) in customer
and security deposits 0 3,608
Net cash flow provided by operating _______ __________
activities 69,023 1,959,487
Cash flows from investing activities:
Improvements to rental properties 0 0
________ __________
Net cash used in investing activities 0 0
Cash flows from financing activities:
Repayments of long-term borrowings (5,998) (637,592)
Partner distribution paid (78,511) (84,119)
Deposit on Sale 0 100,000
________ __________
Net cash flows used by financing activities (84,509) (621,711)
Net increase (decrease) in cash (15,486) 1,337,776
Cash at beginning of year 251,866 147,521
Cash at March 31 236,380 1,485,297
See accompanying Notes to the Financial Statements
PAGE 5
FLORIDA INCOME FUND II, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
(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 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, 1996, or any other interim
period. In management's opinion, all adjustments have been made to
the financial statements necessary for a fair presentation of the
interim periods presented.
NOTE 2 - RELATED PARTY TRANSACTIONS
During the three month period ended March 31, 1997, and March 31,
1996, the Partnership incurred $4,483 and $5,130 in property
management fees paid to Mariner Capital Management, Inc., the
Managing General Partner, in accordance with the Partnership
Agreement. These expenses are included in property expenses. The
General Partners 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 $11,651 were incurred during the first
quarter of 1997. This compares to $7,800 of costs that were
incurred during the first quarter of 1996.
NOTE 3 - BALANCE SHEET
The Balance Sheet at December 31, 1996, has been taken from the
audited Financial Statements at that date.
NOTE 4 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION RESULTS OF OPERATIONS
Liquidity
There are three pending property transactions which, if
consummated, will have a material effect on the Partnership's
liquidity including the possibility of a total liquidation of the
Partnership within 60 to 120 days. These pending transactions are
as follows:
PAGE 6
1. A pending contract to sell Broadway Medical Center to
an unrelated third party with an anticipated closing
in May, 1997. A distribution of approximately $100
per investment unit is anticipated.
2. A pending contract to sell Manatee West Shopping
Center to an unrelated third party with an anticipated
closing in June, 1997. Several contingencies still
exist which could cause the transaction to terminate.
If the transaction does close, a distribution of
approximately $190 per investment unit will be made.
3. The Partnership has elected to discontinue making
further payments on its first mortgage loan to
Allstate Insurance Company related to Pinebrook
Commons Shopping Center. This decision has been made
in order to eliminate monthly negative cash flow of
approximately $10,000. The decision is also being
made because a recent property appraisal estimates the
property's value at $2,300,000 as compared to the
current loan balance of $2,474,000. The loan is a
non-recourse loan with liability limited to the net
value of Pinebrook Commons, as such, shall not have a
detrimental effect on the other Partnership assets.
The Partnership's cash position, including interest bearing
deposits at March 31, 1997, was $236,380. This compares to its
cash position of $251,866 at December 31, 1996. At March 31, 1996,
the Partnership's cash position, including interest bearing
deposits, was $1,485,297.
The decrease in cash between December 31, 1996, and March 31, 1997,
was due primarily to cash provided by operations of $69,023,
principal repayments of $5,998 and partnership distributions paid
of $78,511.
The Partnership's total investment in properties for its portfolio
at March 31, 1997, was $7,024,664. This compares to its total
property investment at December 31, 1996, of $7,024,664 and
$18,072,103 at March 31, 1996. This decline resulted primarily
from the sale of Heritage Square Shopping Center and Town Center
Shopping Center.
The sale of Town Center Shopping Center in July 1996 resulted in a
material reduction in both partnership assets, partnership debt and
partnership liquidity.
PAGE 7
Liquidity - Continued
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's outstanding debt as of March 31, 1997, was
$2,474,212. This compares to debt outstanding December 31, 1996,
of $2,480,210. The $5,998 decrease during the first three months
was due to principal pay downs of $5,998. The Partnership had
$9,958,765 of outstanding debt at March 31, 1996.
Results of Operations
As of March 31, 1997, the occupancy percentages for the Fund's
properties were as follows: Broadway Medical Center, 67%, Manatee
West Shopping Center, 71%, and Pinebrook Commons, 60%.
For the three months ended March 31, 1997, rental income decreased
$423,365 as compared to the same period a year ago. The decrease
was attributable to selling Town Center Shopping Center in July
1996, and increased vacancies in other assets as compared to the
same period one year ago.
For the three months ended March 31, 1997, interest income
decreased by $152.
Property expenses decreased by $169,190 from a year ago due to the
sale of Town Center.
Real estate taxes have decreased to reflect anticipated assessments
for the year and the decrease due to the sale of Heritage Square
and Town Center.
Interest expense has decreased $174,920 for the three month period
ended March 31, 1997, as compared to a year ago. This decrease is
due to the partnership's debt decreasing from $9,958,765 at March
31, 1996, to $2,474,212 as of March 31, 1997. The partnership's
debt as of December 31, 1996, was $2,480,210.
Depreciation and amortization have decreased $73,163 due to the
sale of Heritage Square and Town Center.
PAGE 8
PART II
OTHER INFORMATION
FLORIDA INCOME FUND II, 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
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 II, LIMITED PARTNERSHIP
MARINER CAPITAL MANAGEMENT, INC.
MANAGING GENERAL PARTNER
(Registrant)
5/13/97 By: /s/ LAWRENCE A. RAIMONDI
--------------------------------
Lawrence A. Raimondi
President, Director and CEO
Mariner Capital Management, Inc.
(Principal Executive Officer)
5/13/97 By: /s/ JOE K. BLACKETER
--------------------------------
Joe K. Blacketer
Secretary/Treasurer
Mariner Capital Management, Inc.
(Principal Financial and Accounting Officer)
PAGE 10