10-Q 1 mlp10q3q01.txt FORM 10-Q 3RD QTR 2001 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 Quarter Ended: September 30, 2001 Commission File Number: 0-13174 -------------------------------------- -------------------------------- THE MARINA LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) Indiana 35-1689935 ----------------------------------- ---------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) 11691 Fall Creek Road, Indianapolis, IN 46256 --------------------------------------- ------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (317) 845-0270 -------------- Indicate by check mark whether the registrant (1) 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 (2) has been subject to such filing requirements for the past 90 days. YES X NO --- - 1 THE MARINA LIMITED PARTNERSHIP FORM 10-Q Table of Contents PART I. FINANCIAL INFORMATION Page No. ------------------------------ -------- Item 1. Financial Statements (unaudited) A. Balance Sheets - September 30, 2001, and December 31, 2000 3 B. Statements of Earnings - Comparative three months ended 4 September 30, 2001, and 2000 C. Statements of Earnings - Comparative nine months ended 5 September 30, 2001, and 2000 D. Statements of Cash Flows- Comparative nine months ended 6 September 30, 2001, and 2000 E. Notes to Interim Financial Statements 7&8 Item 2. Management's Discussion and Analysis of Financial 9&10 Condition and Results of Operations Item 3. Quantitative and Qualitative Disclosures about Market Risk 11 PART II. OTHER INFORMATION (The items of Part II are inapplicable or the answers thereto are negative and, accordingly, no reference is made to said items in this report.) Signature 11 2 PART I - FINANCIAL INFORMATION THE MARINA LIMITED PARTNERSHIP ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) The financial information incorporated in this form reflects all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim period. A. THE MARINA LIMITED PARTNERSHIP Balance Sheets September 30,2001, and December 31, 2000 Assets 2001 2000 ------ ---- ---- (Unaudited) Cash and cash equivalents .................... $ 6,361,384 $ 7,719,350 Receivables from homesite sales .............. 1,259,530 1,056,586 Other receivables and assets ................. 1,499,930 1,333,457 Properties held for sale: Homes and homesites available for sale ... 5,042,998 4,284,320 Land and land improvements ............... 1,031,460 935,198 ------------ ------------ 6,074,458 5,219,518 ------------ ------------ Property and equipment: Marine and other, net .................... 2,532,613 2,588,625 Recreational facilities, net ............. 433,875 453,375 Commercial properties, net ............... 1,833,982 1,962,558 ------------ ------------ 4,800,470 5,004,323 ------------ ------------ Other investments: Marina I ................................. 3,625,096 3,428,350 Investments in and Advances to Flatfork Creek Utility .................. (137,863) (152,980) ------------ ------------ $ 23,483,005 $ 23,608,604 ============ ============ Liabilities and Partners' Equity Accounts payable ............................. $ 577,669 $ 705,514 Accrued bonuses .............................. 297,657 133,023 Deferred revenues and sale deposits .......... 290,194 252,547 ------------ ------------ Total Liabilities .......... 1,165,520 1,091,084 ------------ ------------ Partners' equity: General partner .......................... 8,548,392 8,624,873 Limited partners ......................... 13,769,093 13,892,647 ------------ ------------ Total partners' equity ..... 22,317,485 22,517,520 ------------ ------------ $ 23,483,005 $ 23,608,604 ============ ============ 3 B. THE MARINA LIMITED PARTNERSHIP Statements of Earnings Three Months Ended September 30, 2001, and 2000 (Unaudited) 2001 2000 ---- ---- Revenues: Homes and homesite sales ....................... $ 940,245 $ 944,755 Marine operations .............................. 1,959,747 1,652,261 Equity in earnings of investee companies ....... 548,523 882,337 Interest income ................................ 82,580 106,120 Rental income, net ............................. 77,047 84,370 Recreational facilities, net ................... 30,095 63,603 --------- --------- 3,638,237 3,733,446 --------- --------- Costs and expenses: Cost of homes and homesites sold and related expenses .............................. 503,296 709,728 Marine operations .............................. 1,260,863 1,043,771 General and administrative ..................... 293,657 309,594 Management fees paid to general partner ........ 37,887 35,771 --------- ---------- 2,095,703 2,098,864 --------- --------- Net earnings ............ 1,542,534 1,634,583 Net earnings attributable to general partner ....... 589,772 624,966 ---------- ---------- Net earnings attributable to limited partners ...... $ 952,762 $1,009,617 ========== ========== Weighted average number of limited partner units outstanding ...................................... 1,389.05 1,389.05 ========== ========== Net earnings per limited partner unit .............. $ 685.91 $ 726.84 ========== ========== 4 C. THE MARINA LIMITED PARTNERSHIP Statements of Earnings Nine Months Ended September 30, 2001, and 2000 (Unaudited) 2001 2000 ---- ---- Revenues: Homes and homesite sales ..................... $ 2,872,951 $ 4,206,986 Marine operations ............................ 4,764,633 4,440,139 Equity in earnings of investee companies ..... 1,764,635 1,472,864 Interest income .............................. 280,765 378,063 Rental income, net ........................... 135,145 236,187 Recreational facilities, net ................. 64,694 98,642 Gain on sale of commercial property .......... 153,118 - ----------- ----------- 10,035,941 10,832,881 ----------- ----------- Costs and expenses: Cost of homes and homesites sold and related expenses ........................ 2,144,743 2,949,550 Marine operations ............................ 3,388,550 3,282,859 General and administrative ................... 904,656 883,350 Management fees paid to general partner ...... 87,358 83,039 ----------- ----------- 6,525,307 7,198,798 ----------- ----------- Net earnings .......... 3,510,634 3,634,083 Net earnings attributable to general partner ..... 1,342,255 1,389,454 ----------- ----------- Net earnings attributable to limited partners .... $ 2,168,379 $ 2,244,629 =========== =========== Weighted average number of limited partner units outstanding ............................... 1,389.05 1,389.05 =========== =========== Net earnings per limited partner unit ............ $ 1,561.05 $ 1,615.87 =========== =========== 5 D. THE MARINA LIMITED PARTNERSHIP Statements of Cash Flows Nine Months Ended September 30, 2001, and 2000 (Unaudited)

6 E. THE MARINA LIMITED PARTNERSHIP Note to Interim Financial Statements Three and Nine Months Ended September 30, 2001 and 2000 (Unaudited) Note (1) Basis of Presentation A summary of significant accounting policies used by The Marina Limited Partnership is set forth in Note 1 of Notes to Financial Statements included in the December 31, 2000 Annual Report Form 10-K. The interim financial statements have been prepared in accordance with instructions to Form 10-Q, and therefore, do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. The interim financial statements at September 30, 2001, and for the three and nine months ended September 30, 2001 and 2000, have not been audited by independent accountants, but reflect, in the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for such periods. Note (2) Reverse Unit Split On September 7, 2001 a Limited Partners (LP's) meeting was held to vote on a proposed reverse unit split as detailed in a Proxy Statement dated August 8, 2001. Such proposal was adopted with approximately 80% of the LP units voting. Approximately 76% of the outstanding units voted in favor of the proposal. See the August 8, 2001 Proxy Statement for details of the proposal. During October 2001 this reverse split was completed with the Partnership purchasing 20,114 units; which is net of units purchased by LP's to round up to the minimum 300 old units. Subsequent to the completion of this transaction, Limited Partner units outstanding were reduced to 1,321.94 units held by 190 Limited Partners. All units and per unit amounts in the Statements of Earnings for the Three and Nine Months ended September 30, 2001, and 2000 have been adjusted to reflect the Partnership's 300 for 1 reverse unit split completed in October 2001. 7 Note (3) Segment Information The Partnership is engaged in two primary business segments, the development and sale of homes and homesites and marine operations at Geist and Morse Lakes. Summarized financial information by business segment for the periods ended September 30, 2001 and 2000 is as follows (in thousands):

8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2001 AND 2000. The following discussion and analysis is intended to address the significant factors affecting the Partnership's results of operations and financial condition. It is designed to provide a more comprehensive review of the operating results and financial position than could be obtained from an analysis of the financial statements alone. It should, however, be read in conjunction with the financial statements included elsewhere herein. Approval of Reverse Unit Split Proposal by Limited Partners On September 7, 2001 a Limited Partners (LP's) meeting was held to vote on a proposed reverse unit split as detailed in a Proxy Statement dated August 8, 2001. Such proposal was adopted with approximately 80% of the LP units voting. Approximately 76% of the outstanding units voted in favor of the proposal. See the August 8, 2001 Proxy Statement for details of the proposal. During October 2001 this reverse split was completed with the Partnership purchasing 20,114 units; which is net of units purchased by LP's to round up to the minimum 300 old units. Subsequent to the completion of this transaction, Limited Partner units outstanding were reduced to 1,321.94 units held by 190 Limited Partners. All units and per unit amounts in the Statements of Earnings for the Three and Nine Months ended September 30, 2001, and 2000 have been adjusted to reflect the Partnership's 300 for 1 reverse unit split completed in October 2001. Homesite Sales During the three and nine month periods ended September 30, 2001 and 2000, the Partnership sold homesites as follows: Three Months Nine Months ------------ ----------- 2001 2000 2001 2000 ---- ---- ---- ---- Bridgewater 0 1 0 3 Canal Place 4 1 7 1 Morse Overlook 3 2 5 6 --- --- --- --- 7 4 12 10 === === === === The Partnership is the general partner of Marina I LP ("Marina I"), which also develops homesites. During the three and nine month periods ended September 30, 2001 and 2000, Marina I sold homesites as follows: For The Period Ended September 30 2001 2000 ---- ---- Three Months 12 21 == == Nine Months 39 42 == == 9 Results of Operations Nine Months ended September 30, 2001 Compared to 2000. Net earnings decreased by $123,000 in 2001 from 2000. This was primarily the result of a decrease in earnings from homes and homesite sales of $529,000, a decrease of $101,000 from leasing operations and a decrease in interest earnings of $97,000. These decreases were partially offset by increased equity earnings from Marina I of $268,000, increased earnings from Marine Operations of $219,000 and an increase in gain on sale of investment property in 2001 from 2000 of $153,000. The increase in earnings from homes and homesite sales by Marina I is due to an increase in revenues from homesite sales resulting in the Partnership's share in earnings increasing to $1,765,000 in 2001 from $1,473,000 in 2000. The increase in earnings from marine operations is primarily a result of the return to normal water levels in the early season. This is offset by a reduction in earnings from boat sales of $70,000 in 2001 as compared to 2000. The decline in interest earnings is the result of slightly lower average investment cash levels combined with lower interest earnings rates during 2001. On April 5, 2001, the Partnership made a cash distribution to the partners of record on March 23, 2001, of $5.50 per unit of partnership interest, for a total of $3,711,000. This compares to a cash distribution of $5.50 per partnership unit on April 5, 2000. Three Months ended September 30, 2001 Compared to 2000 Net earnings decreased by $92,000 in 2001 from 2000. This was primarily the result of a decrease in equity earnings of $332,000 from Marina I offset by an increase in earnings from marine operations of $90,000 and an increase in earnings from homes and homesite sales of $202,000 by the Partnership. The Partnership recognized $548,000 as its share of the earnings from Marina I in 2001, compared to $877,000 in 2000. Factors leading to these changes in earnings during the third quarter of 2001 compared to 2000 are substantially as discussed related to the nine months ended September 30, 2001. 10 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. ------------------------------------------------------------------- Pursuant to Item 305 (e) of Regulation S-K, the Partnership is not required to provide information in response to this Item 3. SIGNATURE 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. THE MARINA LIMITED PARTNERSHIP ------------------------------ (Registrant) By: /s/ Donald J. Calabria --------------------------- Donald J. Calabria Vice President and Chief Financial Officer The Marina II Corporation General Partner of The Marina Limited Partnership DATE: November 13, 2001 11

MARINA LIMITED PARTNERSHIP 10-Q