-----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, Cyd6F2lQVZoqXXWldFjIivP8Kq0AWVB+yyzWcgmj4fPzNnqUv86V2POy7QpMPzlZ Qbyq2vOpHmNiM3mEw6BupQ== 0000797331-95-000005.txt : 19951019 0000797331-95-000005.hdr.sgml : 19951019 ACCESSION NUMBER: 0000797331-95-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19951018 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SECURED INVESTMENT RESOURCES FUND LP II CENTRAL INDEX KEY: 0000797331 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 363451000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16798 FILM NUMBER: 95581380 BUSINESS ADDRESS: STREET 1: 5453 W 61ST PL CITY: MISSION STATE: KS ZIP: 66205 BUSINESS PHONE: 9133845700 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period to Commission file number 0-16798 SECURED INVESTMENT RESOURCES FUND, L.P. II (Exact name of registrant as specified in its charter) Delaware 36-3451000 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5453 W. 61st Place, Mission, Kansas 66205 (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) (913) 384-5700 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Limited Partnership Interests ("Units") 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 such shorter periods 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 SECURED INVESTMENT RESOURCES FUND, L.P. II INDEX PART I. FINANCIAL INFORMATION Page Item 1. Financial Statements (Unaudited): Balance Sheets -- June 30, 1995 and December 31, 1994 3-4 Statements of Operations -- Three and Six Months Ended June 30, 1995 and 1994 5 Statements of Partnership Capital -- Six Months Ended June 30, 1995 and the Years Ended December 31, 1994, and 1993 6 Statements of Cash Flows -- Six Months Ended June 30, 1995 and 1994 7-8 Notes to Financial Statements 9-11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12-13 PART II. OTHER INFORMATION Item 1. Legal Proceedings 14 Item 2. Changes in Securities 14 Item 3. Defaults Upon Senior Securities 14 Item 4. Submission of Matters to a Vote of Security Holders 14 Item 5. Other Information 14 Item 6. Exhibits and Reports on Form 8-K 14 SIGNATURES 15 PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS SECURED INVESTMENT RESOURCES FUND, L.P. II BALANCE SHEETS June 30, 1995 December 31, (Unaudited) 1994 ASSETS INVESTMENT PROPERTIES--Note Land and buildings $ 36,204,539 $ 36,167,642 Furniture, fixtures and equipment 1,618,224 1,488,893 ____________ ____________ 37,822,763 37,656,535 Less accumulated depreciation and allowance for losses 10,117,546 9,529,532 ____________ ____________ 27,705,217 28,127,003 ____________ ____________ RESTRICTED DEPOSITS Bond cash reserves 1,510,000 1,510,000 Bond principal reduction reserves 429,174 424,464 ____________ ____________ 1,939,174 1,934,464 OTHER ASSETS Cash 574,916 284,224 Rents and other receivables, less allowance of $47,980 in 1995 and $47,282 in 1994 20,465 21,472 Due from related parties--Note B 169,476 173,996 Prepaid expenses 109,572 130,672 Debt issuance costs, net of accumulated amortization of $108,635 in 1995 and $88,602 in 1994 109,743 129,775 Commercial commissions, deposits and other 168,190 161,674 ____________ ____________ 1,152,362 901,813 ____________ ____________ $ 30,796,753 $ 30,963,280 ____________ ____________ SECURED INVESTMENT RESOURCES FUND, L.P. II BALANCE SHEETS--CONT'D. June 30, 1995 December 31, (Unaudited) 1994 LIABILITIES AND PARTNERSHIP CAPITAL Mortgage debt--Note D $ 27,635,096 $ 28,555,529 Deferred interest--Note D 1,108,465 1,108,465 Accrued interest 387,867 368,403 Accounts payable and accrued expenses 610,993 391,988 Unearned revenue 16,215 14,012 Tenant security deposits 131,439 129,306 ____________ ____________ TOTAL LIABILITIES 29,890,075 30,567,703 PARTNERSHIP CAPITAL General Partners Capital contribution 1,000 1,000 Partnership deficit (179,962) (185,073) ____________ ____________ (178,962) (184,073) ____________ ____________ Limited Partners Capital contributions 18,901,831 18,901,831 Partnership deficit (17,816,191) (18,322,181) ____________ ____________ 1,085,640 579,650 ____________ ____________ TOTAL PARTNERSHIP CAPITAL 906,678 395,577 ____________ ____________ $ 30,796,753 $ 30,963,280 ____________ ____________ See notes to financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. II STATEMENTS OF OPERATIONS (Unaudited) Six Months Ended Three Months Ended June 30, June 30, 1995 1994 1995 1994 REVENUES Rents $2,841,141 $2,759,313 $1,408,413 $1,383,156 Maintenance escalations and other 64,162 44,399 41,714 20,331 __________ __________ __________ __________ 2,905,303 2,803,712 1,450,127 1,403,487 __________ __________ __________ __________ OPERATING AND ADMINISTRATIVE EXPENSES Property operating expenses 1,173,099 1,104,299 601,115 560,788 General and administrative expenses 63,712 66,357 34,118 34,838 Professional services 34,101 69,421 16,927 24,662 Management fees and reimbursed direct expenses 135,163 130,039 68,242 64,938 __________ __________ __________ __________ 1,406,075 1,370,116 720,402 685,226 __________ __________ __________ __________ NET OPERATING INCOME 1,499,228 1,433,596 729,725 718,261 NON-OPERATING EXPENSES Interest 1,194,846 1,115,656 675,776 571,545 Depreciation and amortization 683,647 693,476 266,223 343,110 Gain on Debt Restructure (890,366) __________ __________ __________ __________ 988,127 1,809,132 941,999 914,655 PARTNERSHIP INCOME (LOSS) $ 511,101 $ (375,536) $ (212,274) $ (196,394) __________ __________ __________ __________ Allocation of loss: General Partners 5,111 (3,755) (2,123) (1,964) Limited Partners 505,990 (371,781) (210,151) (194,430) __________ __________ __________ __________ $ 511,101 $ (375,536) $ (212,274) $ (196,394) __________ __________ __________ __________ Partnership loss per limited partnership unit $ 9.43 $ (6.93) $ (3.92) $ (3.62) __________ __________ __________ __________ See notes to financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. II STATEMENTS OF PARTNERSHIP CAPITAL (Unaudited) Six Months Ended June 30, 1995 (Unaudited) and the Years Ended December 31, 1994 and 1993 General Limited Partners Partners Total Balances at January 1, 1993 $ (186,964) $ 293,378 $ 106,414 Partnership income 11,783 1,166,558 1,178,341 __________ __________ __________ Balances at December 31, 1993 (175,181) 1,459,936 1,284,755 Partnership loss (8,892) (880,286) (889,178) __________ __________ __________ Balances at December 31, 1994 (184,073) 579,650 395,577 Partnership loss 5,111 505,990 511,101 __________ __________ __________ Balances at June 30, 1995 $ (178,962) $ 1,085,640 $ 906,678 __________ __________ __________ See notes to financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. II STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, 1995 1994 OPERATING ACTIVITIES Partnership income (loss) $ 511,101 $ (375,536) Adjustments to reconcile partnership loss to net cash provided by (used in) operating activities: Depreciation and amortization 615,427 693,476 Amortization of bond discount 75,600 --- Gain on debt restructuring (890,366) --- Provision for losses on rents and other receivables (193,129) (2,840) Changes in assets and liabilities: Rents and other receivables 194,136 7,738 Prepaid expenses 21,101 53,952 Due from related parties 4,520 3,953 Debt issuance costs --- (12,225) Commercial commissions, deposits and other (13,896) 19,465 Accounts payable and accrued expenses 219,004 141,934 Accrued interest 134,830 (21,770) Unearned revenue 2,203 925 Tenant security deposits 2,133 (692) __________ __________ NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 682,664 508,380 __________ __________ INVESTING ACTIVITIES Purchases of and improvements to investment properties (166,229) (70,392) Purchase of restricted bond cash reserves (4,710) (1,842) __________ __________ NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (170,939) (72,234) __________ __________ SECURED INVESTMENT RESOURCES FUND, L.P. II STATEMENTS OF CASH FLOWS (Unaudited)--CONT'D. Six Months Ended June 30, 1995 1994 FINANCING ACTIVITIES Deferral of long-term interest payable $ --- $ 82,798 Principal payments on long-term debt (221,033) (171,066) __________ __________ NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (221,033) (88,268) __________ __________ INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 290,692 347,878 CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD 284,224 208,515 __________ __________ CASH AND CASH EQUIVALENTS END OF PERIOD $ 574,916 $ 556,393 __________ __________ See notes to financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. II NOTES TO FINANCIAL STATEMENTS (Unaudited) June 30, 1995 NOTE A--BASIS OF PRESENTATION The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six month period ended June 30, 1995 are not necessarily indicative of the results that may be expected for the year ended December 31, 1995. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-K for the year ended December 31, 1994. NOTE B--DUE FROM RELATED PARTY Affiliates of the General Partners are entitled to receive payments from the Partnership for management and other services. Specs, Inc. (a corporation in which the General Partner has a minority interest) receives property management fees for providing property management services and direct cost reimbursements based upon time allocated to performing certain Partnership functions. Amounts paid or accrued by the Partnership to affiliates of the General Partners are as follows: Six Months Ended June 30, 1995 1994 Property Management Fees $ 135,163 $ 130,039 __________ __________ Amounts due from related parties consist of the following: June 30, December 31, 1995 1994 Secured Investment Resources II, Inc. (Excess Syndication Costs) $ 124,422 $ 124,422 __________ __________ Secured Investment Resources II, Inc. 45,054 49,574 __________ __________ $ 169,476 $ 173,996 __________ __________ NOTES TO FINANCIAL STATEMENTS (Unaudited)--CONT'D. NOTE B--RELATED PARTY TRANSACTIONS--CONT'D. The net amount due from related parties represents excess syndication costs, management fees payable and other advances. The terms of repayment are discretionary and have not been formalized at this time. The General Partners are entitled to receive a Partnership Management Fee equal to 5% of Cash Flow From Operations (as defined) for managing the normal operations of the Partnership. There was no management fee due as of June 30, 1995 or December 31, 1994. NOTE C--CASH DISTRIBUTIONS No cash distributions have been made since April 1990. Future distributions will only be made from excess cash flow not needed for working capital reserves. NOTE D--MORTGAGE DEBT Mortgage debt consists of the following: June 30, December 31, 1995 1994 Collateralized by Investment Property: First Mortgages: Sunwood Village Apartments $ 8,201,997 $ 8,264,056 Bayberry Crossing Shopping Ctr. 832,714 835,292 Thomasbrook Apartments 4,983,906 4,995,784 Oak Terrace Active Retirement Center and Healthcare Center 12,800,000 12,800,000 Less bond discount (2,428,642) (2,504,242) Forest Park Shopping Ctr. 1,332,651 1,383,627 Second Mortgages: Bayberry Crossing Shopping Ctr. 1,912,470 1,931,012 Thomasbrook Apartments -0- 850,000 ___________ ___________ $27,635,096 $28,555,529 ___________ ___________ Related to the Sunwood Village Apartments purchase money note is a credit enhancement fee which is due at maturity. As of June 30, 1995 and December 31, 1994, $371,095 of credit enhancement fees have been accrued and are reflected in long-term accrued interest. NOTES TO FINANCIAL STATEMENTS (Unaudited)--CONT'D. NOTE D--MORTGAGE DEBT--CONT'D. Related to the Thomasbrook Apartments the second mortgage of $850,000 was paid in full on May 25, 1995 for the discounted amount of $75,000. That payment fully retired the principal amount of $850,000 as well as accrued interest in the amount of $40,366 resulting in a gain to the partnership of $890,366. The Partnership has the option to currently pay or defer payment of interest due on the hedged portion ($8,400,000) of the Oak Terrace Active Retirement Center and Healthcare Center bond financing. As of June 30, 1995 and December 31, 1994, $737,370 of deferred interest has been accrued and is reflected in long-term accrued interest. Cash paid for interest totaled $1,152,575 and $1,124,830 during the first half of 1995 and 1994, respectively. (The remainder of this page intentionally left blank.) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Results of Operations Revenues for the first six months of 1995 increased by $102,000 (3.6%) compared to the same period of last year. The stronger apartment markets allowed the Partnership to continue increasing rental rates, discontinue rent concessions and maintain high occupancy levels. The commercial property remained strong at Forest Park Center in St Louis, the rental income at Bayberry Center increased due to several new leases being completed in the first six months. The Partnership has also increased the rental rates at Oak Terrace, resulting in higher revenue, but also higher vacancy rates. The Partnership feels that the strong apartment market will continue through 1995 into 1996. Operating and Administrative expenses increased $66,000 (5.6%) when comparing the first six months of 1995 with the same period of 1994. Higher property operating expenses are primarily due to higher resident turnover, professional services declined $35,000 (50%) from the same period in 1994. Interest expense for the first six months increased $79,000 (7.1%) over the 1994 first six months expense. This is due primarily to higher interest rates, and increased bond collateral fees. The Partnership anticipates that operating results for the first six months will be representative of the results for the remainder of the year. Liquidity and Capital Reserves During the six months $683,000 of cash was provided by operating activities, $171,000 was used for investing activities and $221,000 was used to reduce long term debt. The second mortgage on Thomasbrook Apartments was paid in full on May 25, 1995. The partnership paid the principal balance of $850,000 and accrued interest of $40,366 in full for a single payment of $75,000. Although the cash position has improved, the Partnership is past due on the Thomasbrook Apartment first mortgage. The General Partners believe that working capital will be available during the remainder of the year to reduce this past due balance and fund known, on-going operating and capital requirements. The General Partners also anticipate that 1995 cash flow from operations will continue to improve because of strong occupancy, continued rental rate increases, and stabilized expenses. It is the General Partners' intent to evaluate the Partnership's portfolio to determine if it is prudent to offer one or more Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.-- Cont'd. Liquidity & Capital Reserves -- Cont'd. properties for sale or possible restructure of the related financing packages. Any unleveraged portion of the net sale proceeds or favorable refinancing terms could generate additional working capital. At the present time, contract negotiations are continuing with a potential buyer for Sunwood Village Apartments. The General Partners have determined it prudent to discontinue cash distributions until such time that adequate working capital and capital improvement reserves are in place. (The remainder of this page intentionally left blank.) PART II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS None. Item 2. CHANGES IN SECURITIES Inapplicable. Item 3. DEFAULTS UPON SENIOR SECURITIES None. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Inapplicable. Item 5. OTHER INFORMATION Inapplicable. Item 6. EXHIBIT AND REPORTS ON FORM 8-K (a) Exhibits None. (b) Reports on Form 8-K There were no reports on Form 8-K filed during the quarter ended June 30, 1995. 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. SECURED INVESTMENT RESOURCES FUND, L.P. II A Delaware Limited Partnership (Registrant) By: James R. Hoyt as Individual General Partner Date: August 15, 1995 By: Secured Investment Resources II, Inc. as Corporate General Partner By: James R. Hoyt, President Date: August 15, 1995 EX-27 2
5 Unaudited. 1 6-MOS DEC-31-1995 JAN-01-1995 JUN-30-1995 574,916 1,939,174 68,445 47,980 0 1,152,362 37,822,764 10,117,546 30,796,753 2,254,979 27,635,096 0 0 0 0 30,796,753 0 2,905,303 0 1,406,075 683,647 0 1,194,846 0 0 0 0 0 0 511,101 9.43 0
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