-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LksTvYTti9CdTdHkZhEBSo0aV5LrjvHubANMCtyeI+tWLGj5Y8gW7ixSH3nRWXSm IIjuDQ6QZFguY14QzwkorQ== 0000950147-99-000835.txt : 19990811 0000950147-99-000835.hdr.sgml : 19990811 ACCESSION NUMBER: 0000950147-99-000835 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARMORED STORAGE INCOME INVESTORS 2 CENTRAL INDEX KEY: 0000788078 STANDARD INDUSTRIAL CLASSIFICATION: LESSORS OF REAL PROPERTY, NEC [6519] IRS NUMBER: 930930503 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-02732 FILM NUMBER: 99682131 BUSINESS ADDRESS: STREET 1: 3839 N 3RD ST STREET 2: STE 108 CITY: PHOENIX STATE: AZ ZIP: 85012 BUSINESS PHONE: 6022301655 MAIL ADDRESS: STREET 1: 3839 N 3RD ST STREET 2: SUITE 108 CITY: PHOENIX STATE: AZ ZIP: 85012 10-Q 1 QTRLY REPORT FOR QUARTER ENDING 6/30/99 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended: Commission File Number: - ------------------ ----------------------- June 30, 1999 33-2732 ARMORED STORAGE INCOME INVESTORS 2 ------------------------------------------------------ (Exact name of Registrant as specified in its charter) California 93-0930503 - ------------------------------- --------------------------------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 4425 N. 24th Street, Suite 225 Phoenix, Arizona 85016 -------------------------------------------------------- (Address of and zip code of principal executive offices) (602) 230-1655 ---------------------------------------------------- (Registrant's telephone number, including area code) 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 [ ] ARMORED STORAGE INCOME INVESTORS 2, a California Limited Partnership PART I FINANCIAL INFORMATION ITEM 1 FINANCIAL STATEMENTS PAGE ---- Balance Sheets 3 Statements of Operations 4 Statements of Cash Flows 5 Notes to Unaudited Financial Statements 6 2 ARMORED STORAGE INCOME INVESTORS 2 a California Limited Partnership BALANCE SHEETS (Unaudited) June 30, June 30, 1999 1998 ----------- ----------- ASSETS Property Land $ 242,825 $ 242,825 Buildings 1,100,520 1,100,520 Furniture and fixtures 25,446 25,446 ----------- ----------- 1,368,791 1,368,791 Less accumulated depreciation 462,741 425,462 ----------- ----------- 906,050 943,329 Cash and cash equivalents 71,755 87,516 Other assets 3,200 2,700 ----------- ----------- $ 981,005 $ 1,033,545 =========== =========== LIABILITIES AND PARTNERS' CAPITAL Accounts payable 23,203 21,485 Commitments (Note 3) Partners' capital General partner (6,493) (3,477) Limited partners 1,010,281 1,067,583 Less amount due from general partner (45,986) (52,046) ----------- ----------- $ 981,005 $ 1,033,545 =========== =========== See Notes to financial statements. 3 ARMORED STORAGE INCOME INVESTORS 2, a California Limited Partnership STATEMENT OF OPERATIONS (unaudited) For the Six Months For the Year For the Year Ended Ended Ended --------------------- ------------ ------------ June June December December 30, 1999 30, 1998 31, 1998 31, 1997 --------- -------- -------- -------- Income Rental $ 109,822 $108,474 $216,513 $231,117 Interest 345 854 1,420 1,854 --------- -------- -------- -------- 110,167 109,328 217,933 232,967 --------- -------- -------- -------- Expenses Property Operations 61,865 48,326 103,495 107,676 Administration 39,466 37,700 56,537 52,718 Amortization & Depreciation 18,400 18,000 36,879 36,610 --------- -------- -------- -------- 119,731 104,026 196,911 196,004 --------- -------- -------- -------- Net Income(Loss) $ (9,564) $ 5,302 $ 21,022 $ 36,963 ========= ======== ======== ======== See notes to financial statements. 4 ARMORED STORAGE INCOME INVESTORS 2, a California Limited Partnership STATEMENTS OF CASH FLOW (unaudited) For the Six Months Ended ----------------------------- June 30, 1999 June 30, 1998 ------------- ------------- Cash Flows From Operating Activities Cash received from customers $ 109,822 $ 108,474 Cash paid to suppliers (101,525) (86,150) Interest received $ 345 $ 854 --------- --------- Net cash provided by operating activities $ 8,642 $ 23,178 --------- --------- Cash Flows From Investing Activities Capital Improvements $ -- $ (35,165) --------- --------- Net cash used in investing activities $ -- $ (35,165) --------- --------- Cash Flows From Financing Activities Distributions to partners $ -- $ -- --------- --------- Net cash used in financing activities $ -- $ -- --------- --------- Increase (decrease) in cash $ 8,642 $ (11,987) Cash and cash equivalents: Beginning 63,113 99,503 --------- --------- Ending $ 71,755 $ 87,516 ========= ========= Reconciliation Of Net Income (Loss) To Net Cash Provided By Operating Activities: Net income (loss) $ (9,564) $ 5,302 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 18,400 18,000 Change in assets and liabilities: Increase (decrease) in accounts payable (194) (124) --------- --------- Net cash provided by operating activities $ 8,642 $ 23,178 ========= ========= See Notes to Financial Statements. 5 ARMORED STORAGE INCOME INVESTORS 2, a California Limited Partnership NOTES OF FINANCIAL STATEMENTS June 30, 1999 NOTE 1: Partnership Organization Armored Storage Income Investors 2 ("the Partnership") was organized under the laws of the State of California pursuant to an agreement of limited partnership filed January 13, 1986, for the purpose of acquiring, developing and operating self-service storage facilities. The Partnership was authorized to issue a total of 20,000 units for a total offering of $10,000,000. Sales of the Partnership units commenced in April of 1986. The Partnership reached its minimum funding requirement of 2,400 units of limited partnership interests on September 22, 1986, and has sold 4,210 units in total. The Partnership's offering period closed on April 3, 1987. NOTE 2: Summary of Significant Accounting Policies Property and equipment: Property and equipment is stated at cost. Depreciation is computed principally by the straight-line method over the following estimated useful lives: Years ----- Building 30 Furniture and Fixtures 5 Rental income: The Partnership receives rental income from its existing self-storage facility. All rental agreements are for month-to-month tenancy. Rental income is recognized on the accrual basis in accordance with generally accepted accounting principles. Income taxes: The Partnership does not record a provision for income taxes, since Federal and state income tax regulations provide that any taxes on income of a Partnership are payable by the partners as individuals. The Partnership's tax returns are prepared on the accrual basis. 6 ARMORED STORAGE INCOME INVESTORS 2, a California Limited Partnership NOTES OF FINANCIAL STATEMENTS June 30, 1999 NOTE 2. Summary of Significant Accounting Policies, continued Cash and cash equivalents: For purposes of reporting cash flows, the Partnership considers all money market funds to be cash equivalents. Unaudited financial statements: The financial statements for the six months ended June 30, 1998 are unaudited, however, in management's opinion they include all adjustments necessary for a fair statement of the results of operations for such interim periods. The interim period results of operations are not necessarily indicative of results for a full year. NOTE 3: Commitments The partnership has the following commitments: (a) The Partnership entered into an agreement with Armored Management, LLC on January 1, 1999, to manage the Partnership's self-storage facility. The term of the agreement is for one year and shall be renewed from year to year unless and until either party terminates the agreement. The agreement provides that the manager shall receive, as compensation for services, 6% of the actual gross cash receipts. (b) The Partnership also entered into an agreement with Armored Management LLC for the management of the Partnership's accounting, securities reporting, database and investor relations activities. The term of the agreement is for one year and shall be renewed from year to year unless and until either party terminates the agreement. The agreement provides for a flat fee of $3,000 per month as compensation for administrative services. (c) The Partnership reimburses the General Partner for the costs of goods and materials used by and for the Partnership and administrative services necessary to the operation of the Partnership. 7 ARMORED STORAGE INCOME INVESTORS 2, a California Limited Partnership NOTES OF FINANCIAL STATEMENTS June 30, 1999 NOTE 4: Due From Former General Partner Due from former General Partner represents a receivable to the Partnership for those amounts reimbursed to the former Managing General Partner for syndication fees incurred in excess of the percentage allowable by the Partnership's prospectus with respect to the total amount of limited partners capital raised. On April 3, 1987 the offering was terminated. Based on actual units sold through the date of termination, it was determined by the General Partner that too much had been paid to the former Managing General Partner. The excess, which amounted to $93,438, has been reclassified to due from former General Partner. At June 30, 1999 the balance due from former General Partner was $45,986. NOTE 5: Impact of year 2000 The Company's assessment of its Year 2000 issues is complete. The Company has determined that there is likely to be no material adverse consequence of Year 2000 issues on the Company's business, results of operations, or financial condition. The Company has few information technology or non-information technology aspects which may be affected by Year 2000; those that may be affected are the computing system used to administer operations. Investigation and queries of the software and hardware suppliers have determined by written statements or other assurances that they are Year 2000 compliant. The Company has no major supplier, vendor, or customers which is likely to materially affect the Company if it is affected by the Year 2000 problem. The Company has determined that it is at little risk of material disruption of its business due to Year 2000 issues. In the event the computing system fails, the Company will purchase and replace the necessary hardware and software for critical systems and contact the software and hardware suppliers to replace, at their cost, the failed components for remaining computers. Costs for the Year 2000 compliance have been for investigation only and no remedial actions have or will be taken. The costs have been minimal and are not material to the financial condition of the Company. 8 PART I. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS The Partnership has one operating facility located in Phoenix, Arizona. The Partnership's facility generated an aggregate gross operating revenue of $109,822 during the first six months of 1999 compared to $108,474 during the first six months of 1998. The facility maintained an occupancy level of 81% at the end of June, 1999, the same as in the prior year. Operating expenses through June 30, 1999 were $61,865 compared to $48,326 for 1998. Salaries, property taxes, maintenance and advertising all contributed to the increase in expenses. Administrative expenses for 1999 were $39,466 nearly identical to $37,700 in 1998. The facility's vacancy rate remains higher than normal. Revenue is expected to increase slightly in the second half of 1999 due to the rent increase recently implemented. All costs will be reviewed in detail to combat the increase in expenses. LIQUIDITY AND CAPITAL RESOURCES As of June 30, 1999, the Partnership held cash and cash equivalents totaling $71,755 as compared to $87,516 for the corresponding quarter of 1998. 9 PART II OTHER INFORMATION ITEM 1: LEGAL PROCEEDINGS: Not applicable. ITEM 2: CHANGES IN SECURITIES: Not applicable. ITEM 3: DEFAULTS UPON SENIOR SECURITIES: Not applicable. ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: Not applicable. ITEM 5: OTHER INFORMATION: Not applicable. 10 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. ARMORED STORAGE INCOME INVESTORS 2 (Registrant) By: Armored Management L.L.C. Its General Partner By: /s/ Dale D. Ulrich ----------------------------- Dale D. Ulrich, Member Dated: 8/9/99 --------------------------- 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-1999 JUN-30-1999 71,755 0 6,400 3,200 0 74,955 1,368,791 462,741 981,005 23,203 0 0 0 0 957,802 981,005 0 110,167 0 80,265 39,466 0 0 (9,564) 0 (9,564) 0 0 0 (9,564) (2.16) (2.16)
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