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 JUNE 30, 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 June 30 1997
and December 31, 1996. . . . . . . . . . . . . . . . . .3
Statements of Income for the Three and Six
Months Ended June 30, 1997 and 1996. . . . . . . . . . .4
Statements of Cash Flows for the Six
Months Ended June 30, 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)
June 30, Dec. 31,
1997 1996
___________ ___________
ASSETS
CURRENT ASSETS
Cash 239,257 251,866
A/R Trade, Net of allowance for 28,593 32,004
doubtful accounts of $102,146
for June 30, 1997 and $102,146
for December 31, 1996)
Notes Receivable 22,966 44,877
Prepaid Expenses and Other 24,650 14,391
_________ _________
Total Current Assets 315,466 343,138
RENTAL PROPERTIES, NET OF
ACCUMULATED DEPRECIATION OF
$636,072 AT JUNE 30, 1997 AND
$1,895,885 AT DECEMBER 31, 1996 2,461,054 5,128,779
INTANGIBLE ASSETS
Deferred Loan Costs, Net 17,043 20,050
_________ _________
TOTAL ASSETS 2,793,563 5,491,967
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES
Current Maturities of Notes
and Mortgages Payable 24,510 24,510
Accounts Payable 5,116 17,664
Accrued Expenses 13,643 10,486
Customer & Security Deposits 17,491 53,825
Deposit on Sale 0 0
_________ _________
TOTAL CURRENT LIABILITIES 60,760 106,485
NOTES AND MORTGAGES PAYABLE 2,449,702 2,455,700
PARTNERS' CAPITAL
General Partners' Capital (46,070) (39,621)
Limited Partners' Capital 292,297 2,969,403
Net Income 36,874 0
___________ ___________
TOTAL PARTNERS' EQUITY 283,101 2,929,782
TOTAL LIABILITIES
AND PARTNERS' CAPITAL 2,793,563 5,491,967
See Accompanying Notes to the Financial Statements
PAGE 3
FLORIDA INCOME FUND II, LIMITED PARTNERSHIP
STATEMENTS OF INCOME
(Unaudited)
For Three Months Ended For Six Months Ended
06/30/97 06/30/96 06/30/97 06/30/96
__________ ________ ________ ________
REVENUES:
Sales Proceeds 2,840,000 -0- 2,840,000 1,950,000
Rental Income 138,030 670,692 385,019 1,341,046
Interest Income 708 25,596 1,382 26,422
_________ _______ _________ _________
Total Revenues 2,978,738 696,288 3,226,401 3,317,468
EXPENSES:
Cost of Sales and
Closing Costs 2,819,056 -0- 2,819,056 1,601,791
Property Operating
Expenses 101,731 130,029 181,727 379,215
Real Estate Taxes 15,985 50,571 47,647 101,142
Interest Expense 0 249,098 54,211 478,229
Depreciation 30,724 118,308 83,878 236,616
Amortization 0 9,883 3,008 20,900
_________ _______ _________ _________
Total Expenses 2,967,496 557,889 3,189,527 2,817,893
NET INCOME 11,242 138,399 36,874 499,575
See accompanying Notes to the Financial Statements
PAGE 4
FLORIDA INCOME FUND II, LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)
For Six Months Ended
06/30/97 06/30/96
________ ________
Cash Flows From Operating Activities:
Net Income 36,874 499,575
Adjustments to reconcile net income
to net cash provided by operations:
Depreciation & Amortization 86,886 257,516
Cost of Sales 2,586,247 1,517,585
(Increase) decrease in receivables 25,322 3,102
(Increase) decrease in prepaid
expenses and other (10,259) (58,198)
Increase (decrease) accounts payable
and accrued expenses (9,392) (11,422)
Increase (decrease) in customer
and security deposits (36,334) (21,983)
Net cash flow provided by operating _________ _________
activities 2,679,344 2,186,175
Cash flows from investing activities:
Improvements to rental properties (2,400) 0
_________ _________
Net cash used in investing activities (2,400) 0
Cash flows from financing activities:
Repayments of long-term borrowings (5,998) (675,275)
Partner distribution paid (2,683,555) (164,003)
Deposit on Sale 0 130,000
_________ _________
Net cash flows used by financing activities (2,689,553) (709,278)
Net increase (decrease) in cash (12,609) (1,476,897)
Cash at beginning of year 251,866 147,521
Cash at June 30 239,257 1,624,418
See accompanying Notes to the Financial Statements
PAGE 5
FLORIDA INCOME FUND II, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 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 June 30, 1997, and June 30,
1996, the Partnership incurred $1,972 and $21,328 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 $7,800 were incurred during the second
quarter of 1997. This compares to $7,800 of costs that were
incurred during the second 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 property transactions which had a material effect
on the Partnership's liquidity including the possibility of a total
liquidation of the Partnership within 60 to 120 days. These
transactions are as follows:
PAGE 6
1. The Partnership sold Broadway Medical Center to an
unrelated third party on May 21, 1997 at a price of
$600,000 as reported in an 8-K filed on May 21, 1997.
The sale generated approximately $500,000 which was
available for distribution to the partners.
2. The Partnership sold Manatee West Shopping Center to
an unrelated third party on June 16, 1997 at a price
of $2,240,000 as reported in an 8-K filed on June 16,
1997. The sale generated approximately $2,050,000
which was available for distribution to the partners.
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 with the intention to deed the
property to Allstate. 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 June 30, 1997, was $239,257. This compares to its cash
position of $251,866 at December 31, 1996. At June 30, 1996, the
Partnership's cash position, including interest bearing deposits,
was $1,624,418.
The decrease in cash between December 31, 1996, and June 30, 1997,
was due primarily to cash provided by operations of $2,679,344,
improvements to rental properties of $2,400, principal repayments
of $5,998 and partnership distributions paid of $2,683,555.
The Partnership's total investment in properties for its portfolio
at June 30, 1997, was $3,097,126. This compares to its total
property investment at December 31, 1996, of $7,024,664 and
$18,072,103 at June 30, 1996. These declines resulted primarily
from the sales of Broadway Medical Center and Manatee West Shopping
Center in 1997 and the sale of Town Center Shopping Center in July,
1996.
The sale of Broadway Medical Center and Manatee West Shopping
Center resulted in a material reduction in both partnership assets,
partnership debt and partnership liquidity. The decision to deed
Pinebrook Commons to the lender could result in the liquidation of
the Partnership within 60 to 120 days.
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 June 30, 1997, was
$2,474,212. This compares to debt outstanding December 31, 1996,
of $2,480,210. The $5,998 decrease during the first six months was
due to principal pay downs of $5,998. The Partnership had
$9,921,082 of outstanding debt at June 30, 1996.
Results of Operations
As of June 30, 1997, the occupancy percentages for the Fund's
property was as follows: Pinebrook Commons, 60%.
For the six months ended June 30, 1997, rental income decreased
$956,027 as compared to the same period a year ago. The decrease
was attributable to selling most of the Partnership's assets over
the last 12 months.
For the six months ended June 30, 1997, interest income decreased
by $25,040.
Property expenses decreased by $197,488 from a year ago due to the
sale of the properties.
Real estate taxes have decreased due to the sale of the properties.
Interest expense has decreased $54,211 for the six month period
ended June 30, 1997, as compared to a year ago. This decrease is
due to the partnership's debt decreasing from $9,921,082 at June
30, 1996, to $2,474,212 as of June 30, 1997 and due to the stoppage
of mortgage payments being made at Pinebrook Commons. The
partnership's debt as of December 31, 1996, was $2,480,210.
Depreciation and amortization have decreased $152,738 due to the
sale of the properties.
PAGE 8
PART II
OTHER INFORMATION
FLORIDA INCOME FUND II, LIMITED PARTNERSHIP
ITEM 1. LEGAL PROCEEDINGS
The Partnership's decision to discontinue mortgage
payments on Pinebrook Commons has resulted in a
foreclosure action against the Partnership by Allstate
Life Insurance Company, as of June 27, 1997.
The Partnership has answered Allstate's foreclosure
complaint and does not intend to oppose the
foreclosure action. Allstate is seeking title to the
property and is demanding all cash flow from the
property from the point of default. The Partnership
is reserving all property cash flow to satisfy the
demand. The loan is a non-recourse loan with
liability limited to the real estate asset. Therefore
Allstate can not seek a deficiency judgment against
the Partnership.
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)
8/12/97 By: /s/ LAWRENCE A. RAIMONDI
--------------------------------
Lawrence A. Raimondi
President, Director and CEO
Mariner Capital Management, Inc.
(Principal Executive Officer)
8/12/97 By: /s/ JOE K. BLACKETER
--------------------------------
Joe K. Blacketer
Secretary/Treasurer
Mariner Capital Management, Inc.
(Principal Financial and Accounting Officer)
PAGE 10