-----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, G7I++gBpgRafXD23b/FBtPy4WYJmKIcRzqRPcIMSDiXNf8TwyAx1BZxsFGNkVBhD tnRXKhwhjoofWZ7E8hIo9A== /in/edgar/work/20000811/0000950131-00-004824/0000950131-00-004824.txt : 20000921 0000950131-00-004824.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950131-00-004824 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP CENTRAL INDEX KEY: 0000825788 STANDARD INDUSTRIAL CLASSIFICATION: [6500 ] IRS NUMBER: 391606834 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-17686 FILM NUMBER: 693110 BUSINESS ADDRESS: STREET 1: 101 W 11TH STREET STE 1110 CITY: KANSAS CITY STATE: MO ZIP: 64105 BUSINESS PHONE: 6088292992 MAIL ADDRESS: STREET 1: 101 WEST 11TH ST STREET 2: STE 1110 CITY: KANSAS CITY STATE: MO ZIP: 64105 FORMER COMPANY: FORMER CONFORMED NAME: DIVALL INSURED INCOME FUND-2 LIMITED PARTNERSHIP DATE OF NAME CHANGE: 19880229 10-Q 1 0001.txt FORM 10-Q FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2000 --------------- OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to _________ Commission file number 0-17686 DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) Wisconsin 39-1606834 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 101 W. 11th Street, Suite 1110, Kansas City, Missouri 64105 (Address of principal executive offices, including zip code) (816) 421-7444 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Limited Partnership Interests 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 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____ --- PART I - FINANCIAL INFORMATION Item 1. Financial Statements DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP BALANCE SHEETS June 30, 2000 and December 31, 1999 ----------------------------------- ASSETS
(Unaudited) June 30, December 31, 2000 1999 ----------- ----------- INVESTMENT PROPERTIES AND EQUIPMENT:(Note 3) Land $ 7,298,596 $ 7,298,596 Buildings 12,198,213 12,198,213 Equipment 669,778 669,778 Accumulated depreciation (5,663,373) (5,487,177) ----------- ----------- Net investment properties and equipment 14,503,214 14,679,410 ----------- ----------- OTHER ASSETS: Cash and cash equivalents 1,166,358 1,387,306 Cash held in Indemnification Trust (Note 8) 345,223 335,845 Rents and other receivables 42,819 489,412 Deferred rent receivable 117,223 134,063 Prepaid insurance 5,866 14,392 Deferred charges 78,875 84,960 ----------- ----------- Total other assets 1,756,364 2,445,978 ----------- ----------- Total assets $16,259,578 $17,125,388 =========== ===========
The accompanying notes are an integral part of these statements. 2 DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP BALANCE SHEETS JUNE 30, 2000 AND DECEMBER 31, 1999 ----------------------------------- LIABILITIES AND PARTNERS' CAPITAL
(Unaudited) June 30, December 31, 2000 1999 ------------ ------------ LIABILITIES: Accounts payable and accrued expenses $ 58,642 $ 50,286 Due to current General Partner 1,422 1,968 Security deposits 117,850 117,850 Unearned rental income 61,918 81,540 ------------ ------------ Total liabilities 239,832 251,644 ------------ ------------ CONTINGENT LIABILITIES: (Note 7) PARTNERS' CAPITAL: (Notes 1, 4 and 9) Current General Partner - Cumulative net income 144,708 137,620 Cumulative cash distributions (59,954) (57,119) ------------ ------------ 84,754 80,501 ------------ ------------ Limited Partners (46,280.3 interests outstanding) Capital contributions, net of offering costs 39,358,468 39,358,468 Cumulative net income 20,692,021 19,990,272 Cumulative cash distributions (43,275,268) (41,715,268) Reallocation of former general partners' deficit capital (840,229) (840,229) ------------ ------------ 15,934,992 16,793,243 ------------ ------------ Total partners' capital 16,019,746 16,873,744 ------------ ------------ Total liabilities and partners' capital $ 16,259,578 $ 17,125,388 ============ ============
The accompanying notes are an integral part of these statements. 3 DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP STATEMENTS OF INCOME (Unaudited) -----------
Three Months Ended Six Months Ended ------------------ ----------------- June 30, June 30, -------- -------- 2000 1999 2000 1999 -------- -------- ---------- ---------- REVENUES: Rental income (Note 5) $595,930 $681,275 $1,162,743 $1,363,655 Interest income 15,212 14,398 30,409 29,261 Recovery of amount previously written off 927 25,835 2,318 37,618 Other income 1,179 73,866 1,446 86,872 -------- -------- ---------- ---------- 613,248 795,374 1,196,916 1,517,406 -------- -------- ---------- ---------- EXPENSES: Partnership management fees 46,928 45,954 93,163 91,426 Insurance 4,404 5,967 8,779 11,935 General and administrative 40,888 23,123 62,146 38,078 Advisory Board fees and expenses 3,968 3,625 7,985 6,225 Write-off uncollectible receivables 6,810 0 6,810 0 Ground lease payments (Note 3) 26,389 31,372 57,761 63,096 Expenses incurred due to default by lessee 1,390 1,607 1,390 3,891 Real estate taxes 0 (45,210) 0 (45,210) Professional services 36,007 25,015 67,671 53,922 Restoration Fees 37 0 93 0 Depreciation 88,098 93,952 176,196 187,903 Amortization 2,757 32,913 6,085 35,226 -------- -------- ---------- ---------- 257,676 218,318 488,079 446,492 -------- -------- ---------- ---------- NET INCOME $355,572 $577,056 $ 708,837 $1,070,914 ======== ======== ========== ========== NET INCOME - CURRENT GENERAL PARTNER $ 3,556 $ 5,771 $ 7,088 $ 10,709 NET INCOME - LIMITED PARTNERS 352,016 571,285 701,749 1,060,205 -------- -------- ---------- ---------- $355,572 $577,056 $ 708,837 $1,070,914 ======== ======== ========== ========== NET INCOME PER LIMITED PARTNERSHIP INTEREST, based on 46,280.3 Interests outstanding $ 7.61 $ 12.34 $ 15.16 $ 22.91 ======== ======== ========== ==========
The accompanying notes are an integral part of these statements. 4 DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS (Unaudited) -----------
Six Months Ended June 30, ------------------------- 2000 1999 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 708,837 $ 1,070,914 Adjustments to reconcile net income to net cash provided by operating activities - Depreciation and amortization 182,281 223,129 Recovery of amounts previously written off (2,318) (37,618) Write-off of uncollectible receivables 6,810 0 Interest applied to Indemnification Trust account (9,378) (7,050) Decrease in rents and other receivables 439,783 74,396 Withdrawals/(Deposits) for payment of real estate taxes 0 214 Decrease in prepaids 8,526 11,935 Decrease in deferred rent receivable 16,840 10,783 (Decrease) in due to current General Partner (546) (415) Increase/(Decrease) in accounts payable and other 8,356 (9,668) (Decrease) in real estate taxes payable 0 (50,291) Increase (Decrease) in unearned rental income (19,622) 2,024 ----------- ----------- Net cash from operating activities 1,339,569 1,288,353 ----------- ----------- CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: Principal payments received on direct financing leases 0 35,300 Principal payments received on notes receivable 0 2,317 Proceeds from sale of investment properties 0 18,300 Recoveries from former affiliates 2,318 2,318 ----------- ----------- Net cash from investing activities 2,318 58,235 ----------- ----------- CASH FLOWS (USED IN) FINANCING ACTIVITIES: Cash distributions to Limited Partners (1,560,000) (1,425,000) Cash distributions to current General Partner (2,835) (4,283) ----------- ----------- Net cash (used in) financing activities (1,562,835) (1,429,283) ----------- ----------- NET (DECREASE) IN CASH AND CASH EQUIVALENTS (220,948) (82,695) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,387,306 1,256,165 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,166,358 $ 1,173,470 =========== ===========
The accompanying notes are an integral part of these statements. 5 DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS These unaudited interim financial statements should be read in conjunction with DiVall Insured Income Properties 2 Limited Partnership's (the "Partnership") 1999 annual audited financial statements within Form 10-K. These unaudited financial statements include all adjustments which are, in the opinion of management, necessary to present a fair statement of the Partnership's financial position as of June 30, 2000, and the results of operations for the three and six-month periods ended June 30, 2000, and 1999, and cash flows for the six-month periods ended June 30, 2000 and 1999. Results of operations for the periods are not necessarily indicative of the results to be expected for the full year. 1. ORGANIZATION AND BASIS OF ACCOUNTING: ------------------------------------- The Partnership was formed on November 18, 1987, pursuant to the Uniform Limited Partnership Act of the State of Wisconsin. The initial capital which was contributed during 1987, consisted of $300, representing aggregate capital contributions of $200 by the former general partners and $100 by the Initial Limited Partner. The minimum offering requirements were met and escrowed subscription funds were released to the Partnership as of April 7, 1988. On January 23, 1989, the former general partners exercised their option to increase the offering from 25,000 interests to 50,000 interests and to extend the offering period to a date no later than August 22, 1989. On June 30, 1989, the general partners exercised their option to extend the offering period to a date no later than February 22, 1990. The offering closed on February 22, 1990, at which point 46,280.3 interests had been sold, resulting in total offering proceeds, net of underwriting compensation and other offering costs, of $39,358,468. The Partnership is currently engaged in the business of owning and operating its investment portfolio (the "Properties") of commercial real estate. The Properties are leased on a triple net basis to, and operated by, franchisors or franchisees of national, regional, and local retail chains under long-term leases. The lessees consist primarily of fast-food, family style, and casual/theme restaurants, but also include a video rental store and a child care center. At June 30, 2000, the Partnership owned 28 properties with specialty leasehold improvements in 12 of these properties. Rental revenue from investment properties is recognized on the straight-line basis over the life of the respective lease. Percentage rents were previously accrued throughout the year based on the tenant's actual reported year-to-date sales along with management's estimate of the tenant's sales for any remaining unreported periods during the year. However, effective January 1, 2000, the Partnership adopted Staff Accounting Bulletin 101, which requires the recording of percentage rents only when the tenant has reached the breakpoint stipulated in its lease. The Partnership considers its operations to be in only one segment and therefore no segment disclosure is made. Depreciation of the properties is provided on a straight-line basis over 31.5 years, which is the estimated useful lives of the buildings and improvements. Equipment is depreciated on a straight-line basis over the estimated useful lives of 5 to 7 years. Deferred charges consist of leasing commissions paid when properties are leased to tenants other than the original tenant. Leasing commissions are capitalized and amortized over the life of the lease. Real estate taxes on the Partnership's investment properties are the responsibility of the tenant. However, when a tenant fails to make the required tax payments or when a property becomes vacant, the Partnership makes the appropriate payment to avoid possible foreclosure of the property. Taxes are accrued in the period in which the 6 liability is incurred. Cash and cash equivalents include cash on deposit with financial institutions and highly liquid temporary investments with initial maturities of 90 days or less. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities (and disclosure of contingent assets and liabilities) at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Partnership follows Statement of Financial Accounting Standards No.121 ("SFAS 121"), Accounting for the Impairment of Long-Lived Assets and for Long- Lived Assets to be Disposed of, which requires that all long-lived assets be reviewed for impairment in value whenever changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Partnership will be dissolved on November 30, 2010, or earlier upon the prior occurrence of any of the following events: (a) the disposition of all properties of the Partnership; (b) the written determination by the General Partner that the Partnership's assets may constitute "plan assets" for purposes of ERISA; (c) the agreement of Limited Partners owning a majority of the outstanding interests to dissolve the Partnership; or (d) the dissolution, bankruptcy, death, withdrawal, or incapacity of the last remaining General Partner, unless an additional General Partner is elected previously by a majority in interest of the Limited Partners. During the Second Quarter of 1998, the General Partner received the consent of the Limited Partners to liquidate the Partnership's assets and dissolve the Partnership. However, a buyer was not found for the Partnership's assets, and no current liquidation or dissolution plans are in effect. Management plans to continue normal operations for the Partnership for the forseeable future. No provision for Federal income taxes has been made, as any liability for such taxes would be that of the individual partners rather than the Partnership. At December 31, 1999, the tax basis of the Partnership's assets exceeded the amounts reported in the accompanying financial statements by approximately $8,400,000. 2. REGULATORY INVESTIGATION: ------------------------- A preliminary investigation during 1992 by the Office of Commissioner of Securities for the State of Wisconsin and the Securities and Exchange Commission (the "Investigation") revealed that during at least the four years ended December 31, 1992, the former general partners of the Partnership, Gary J. DiVall ("DiVall") and Paul E. Magnuson ("Magnuson") had transferred substantial cash assets of the Partnership and two affiliated publicly registered partnerships, DiVall Insured Income Fund Limited Partnership ("DiVall 1") (dissolved effective December 31, 1998) and DiVall Income Properties 3 Limited Partnership ("DiVall 3") (collectively the "Partnerships") to various other entities previously sponsored by or otherwise affiliated with DiVall and Magnuson. The unauthorized transfers were in violation of the respective Partnership Agreements and resulted, in part, from material weaknesses in the internal control system of the Partnerships. Subsequent to discovery, and in response to the regulatory inquiries, a third- party Permanent Manager, The Provo Group, Inc. ("TPG"), was appointed (effective February 8, 1993) to assume responsibility for daily operations and assets of the Partnerships as well as to develop and execute a plan of restoration for the Partnerships. Effective May 26, 1993, the Limited Partners, by written consent of a majority of interests, elected the Permanent Manager, TPG, as General Partner. TPG terminated the former general partners by accepting their tendered resignations. In 1993, the current General Partner estimated an aggregate recovery of $3 million for the Partnerships. At that time, an allowance was established against amounts due from former general partners and their affiliates reflecting the estimated $3 million receivable. This net receivable was allocated among the Partnerships based on each Partnership's pro rata share of the total misappropriation. Through June 30, 2000, $5,785,000 of recoveries have been received which exceeded the original estimate of $3 million. As a result, the Partnership has recognized 7 $1,116,000 as income over the past four years, which represents its share of the excess recovery. No further significant recoveries are anticipated. 3. INVESTMENT PROPERTIES: ---------------------- As of June 30, 2000, the Partnership owned 26 fully constructed fast-food restaurants, a video store, and a preschool. The properties are comprised of the following: ten (10) Wendy's restaurants, four (4) Hardee's restaurants, three (3) Denny's restaurants, one (1) Fiesta Time restaurant, one (1) Mulberry Street Grill restaurant, one (1) Popeye's Famous Fried Chicken restaurant, one (1) Hooter's restaurant, one (1) Kentucky Fried Chicken restaurant, one (1) Hostettler's restaurant, one (1) Miami Subs restaurant, one (1) Village Inn restaurant, one (1) Blockbuster Video store, and one (1) Sunrise Preschool. The 28 properties are located in a total of thirteen (13) states. From time to time, the Partnership experiences interruptions in rental receipts due to tenant delinquencies and vacancies. At June 30, 2000, one of the Partnership's properties was unoccupied. DenAmerica did not renew its lease on the Denny's property on Camelback Road in Phoenix, Arizona when it expired on January 30, 1998, but continued to operate the restaurant and pay rent through December 31, 1999. During January 2000, the tenant notified Management that it had vacated the premises and ceased paying rent. Management has negotiated a termination of the ground lease on this property. Pursuant to the terms of the agreement, the Partnership will pay $90,000 during the Third Quarter of 2000 in exchange for all future ground lease obligations, and possession of the property will return to the ground lessor. The total cost of the investment properties and specialty leasehold improvements includes the original purchase price plus acquisition fees and other capitalized costs paid to an affiliate of the former general partners. According to the Partnership Agreement, the former general partners were to commit 80% of the original offering proceeds to investment in properties. Upon full investment of the net proceeds of the offering, approximately 75% of the original proceeds was invested in the Partnership's properties. The current General Partner receives a fee for managing the Partnership equal to 4% of gross receipts, with a maximum reimbursement for office rent and related office overhead of $25,000 between the three original affiliated Partnerships as provided in the Permanent Manager Agreement ("PMA"), which amount has been reduced due to the 1998 sale of DiVall 1. Effective March 1, 2000, the minimum management fee and the maximum reimbursement for office rent and overhead increased by 2.2% representing the allowable annual Consumer Price Index adjustment per the PMA. For purposes of computing the 4% overall fee, gross receipts includes amounts recovered in connection with the misappropriation of assets by the former general partners and their affiliates. TPG has received fees from the Partnership totaling $55,130 to date on the amounts recovered, which has been offset against the 4% minimum fee. The Partnership owns three (3) restaurants located on parcels of land where it has entered into long-term ground leases. One (1) of these leases is paid by the tenant and two (2) are paid by the Partnership. The leases paid by the Partnership are considered operating leases and the lease payments are expensed in the periods to which they apply. The lease terms require aggregate minimum annual payments of approximately $126,000 and expire in the years 2003 and 2008, although Management has negotiated a termination of the lease expiring in 2003, which should be effective during the Third Quarter of 2000. Several of the Partnership's property leases contain purchase option provisions with stated purchase prices in excess of the original cost of the properties. The current General Partner is not aware of any unfavorable purchase options in relation to original cost. 4. PARTNERSHIP AGREEMENT: ---------------------- The Partnership Agreement, prior to an amendment effective May 26, 1993, provided that, for financial reporting 8 and income tax purposes, net profits or losses from operations were allocated 90% to the Limited Partners and 10% to the general partners. The Partnership Agreement also provided for quarterly cash distributions from Net Cash Receipts, as defined, within 60 days after the last day of the first full calendar quarter following the date of release of the subscription funds from escrow, and each calendar quarter thereafter, in which such funds were available for distribution with respect to such quarter. Such distributions were to be made 90% to Limited Partners and 10% to the former general partners, provided, however, that quarterly distributions were to be cumulative and were not to be made to the former general partners unless and until each Limited Partner had received a distribution from Net Cash Receipts in an amount equal to 10% per annum, cumulative simple return on his or her Adjusted Original Capital, as defined, from the Return Calculation Date, as defined. Net Proceeds, as originally defined, were to be distributed as follows: (a) to the Limited Partners, an amount equal to 100% of their Adjusted Original Capital; (b) then, to the Limited Partners, an amount necessary to provide each Limited Partner a Liquidation Preference equal to a 13.5% per annum, cumulative simple return on Adjusted Original Capital from the Return Calculation date including in the calculation of such return all prior distributions of Net Cash Receipts and any prior distributions of Net Proceeds under this clause; and (c) then, to Limited Partners, 90% and to the General Partners, 10%, of the remaining Net Proceeds available for distribution. On May 26, 1993, pursuant to the results of a solicitation of written consents from the Limited Partners, the Partnership Agreement was amended to replace the former general partners and amend various sections of the agreement. The former general partners were replaced as General Partner by The Provo Group, Inc., an Illinois corporation. Under the terms of the amendment, net profits or losses from operations are allocated 99% to the Limited Partners and 1% to the current General Partner. The amendment also provided for distributions from Net Cash Receipts to be made 99% to Limited Partners and 1% to the current General Partner provided, that quarterly distributions will be cumulative and will not be made to the current General Partner unless and until each Limited Partner has received a distribution from Net Cash Receipts in an amount equal to 10% per annum, cumulative simple return on his or her Adjusted Original Capital, as defined, from the Return Calculation Date, as defined, except to the extent needed by the General Partner to pay its federal and state income taxes on the income allocated to it attributable to such year. Distributions paid to the General Partner are based on the estimated tax liability resulting from allocated income. Subsequent to the filing of the General Partner's income tax returns, a true-up with actual distributions is made. The provisions regarding distribution of Net Proceeds, as defined, were also amended to provide that Net Proceeds are to be distributed as follows: (a) to the Limited Partners, an amount equal to 100% of their Adjusted Original Capital; (b) then, to the Limited Partners, an amount necessary to provide each Limited Partner a Liquidation Preference equal to a 13.5% per annum, cumulative simple return on Adjusted Original Capital from the Return Calculation Date including in the calculation of such return on all prior distributions of Net Cash Receipts and any prior distributions of Net Proceeds under this clause, except to the extent needed by the General Partner to pay its federal and state income tax on the income allocated to it attributable to such year; and (c) then, to Limited Partners, 99%, and to the General Partner, 1%, of remaining Net Proceeds available for distribution. Additionally, per the amendment of the Partnership Agreement dated May 26, 1993, the total compensation paid to all persons for the sale of the investment properties shall be limited to a competitive real estate commission, not to exceed 6% of the contract price for the sale of the property. The General Partner may receive up to one-half of the competitive real estate commission, not to exceed 3%, provided that the General Partner provides a substantial amount of services in the sales effort. It is further provided that a portion of the amount of such fees payable to the General Partner is subordinated to its success in recovering the funds misappropriated by the former general partners. (See Note 7.) 5. LEASES: ------- Lease terms for the majority of the investment properties are 20 years from their inception. The leases generally provide for minimum rents and additional rents based upon percentages of gross sales in excess of specified breakpoints. The lessee is responsible for occupancy costs such as maintenance, insurance, real estate taxes, and utilities. Accordingly, these amounts are not reflected in the statements of income except in circumstances where, 9 in management's opinion, the Partnership will be required to pay such costs to preserve its assets (i.e., payment of past-due real estate taxes). Management has determined that the leases are properly classified as operating leases; therefore, rental income is reported when earned and the cost of the property, excluding the cost of the land, is depreciated over its estimated useful life. Aggregate minimum lease payments to be received under the leases for the Partnership's properties are as follows: Year ending December 31, 2000 $ 2,259,600 2001 2,161,547 2002 2,104,680 2003 2,063,149 2004 2,064,619 Thereafter 10,340,927 ----------- $20,994,522 =========== Ten (10) of the properties are leased to Wensouth Orlando, a franchisee of Wendy's restaurants. Wensouth base rents accounted for 37% of total base rents for 1999. 6. TRANSACTIONS WITH CURRENT GENERAL PARTNER: ------------------------------------------ Amounts paid to the current General Partner for the six-month periods ended June 30, 2000 and 1999 are as follows. Incurred as of Incurred as of Current General Partner June 30, 2000 June 30, 1999 - ----------------------- ------------- ------------- Management fees $ 93,163 $ 91,426 Restoration fees 93 0 Overhead allowance 7,524 7,376 Reimbursement for out-of-pocket expenses 6,477 5,314 Cash distribution 2,835 4,283 -------- -------- $110,092 $108,399 ======== ======== 7. CONTINGENT LIABILITIES: ----------------------- According to the Partnership Agreement, as amended, the current General Partner may receive a disposition fee not to exceed 3% of the contract price of the sale of investment properties. Fifty percent (50%) of all such disposition fees earned by the current General Partner is to be escrowed until the aggregate amount of recovery of the funds misappropriated from the Partnerships by the former general partners is greater than $4,500,000. Upon reaching such recovery level, full disposition fees will thereafter be payable and fifty percent (50%) of the previously escrowed amounts will be paid to the current General Partner. At such time as the recovery exceeds $6,000,000 in the aggregate, the remaining escrowed disposition fees shall be paid to the current General Partner. If such levels of recovery are not achieved, the current General Partner will contribute the amounts escrowed towards the recovery. In lieu of an escrow, 50% of all such disposition fees have been paid directly to the restoration account and then distributed among the three Partnerships. Fifty percent (50%) of the total amount paid to the recovery was refunded to the current General Partner during March 1996 after surpassing the recovery level of 10 $4,500,000. The remaining amount allocated to the Partnership may be owed to the current General Partner if the $6,000,000 recovery level is met. As of June 30, 1999, the Partnership may owe the current General Partner $16,296, which is currently reflected as a recovery, if the $6,000,000 recovery level is achieved, which is considered unlikely. 8. PMA INDEMNIFICATION TRUST: -------------------------- The PMA provides that the Permanent Manager will be indemnified from any claims or expenses arising out of or relating to the Permanent Manager serving in such capacity or as substitute general partner, so long as such claims do not arise from fraudulent or criminal misconduct by the Permanent Manager. The PMA provides that the Partnership fund this indemnification obligation by establishing a reserve of up to $250,000 of Partnership assets which would not be subject to the claims of the Partnership's creditors. An Indemnification Trust ("Trust") serving such purposes has been established at United Missouri Bank, N.A. The Trust has been fully funded with Partnership assets as of June 30, 2000. Funds are invested in U.S. Treasury securities. In addition, $95,223 of earnings have been credited to the Trust as of June 30, 2000. The rights of the Permanent Manager to the Trust shall be terminated upon the earliest to occur of the following events: (i) the written release by the Permanent Manager of any and all interest in the Trust; (ii) the expiration of the longest statute of limitations relating to a potential claim which might be brought against the Permanent Manager and which is subject to indemnification; or (iii) a determination by a court of competent jurisdiction that the Permanent Manager shall have no liability to any person with respect to a claim which is subject to indemnification under the PMA. At such time as the indemnity provisions expire or the full indemnity is paid, any funds remaining in the Trust will revert back to the general funds of the Partnership. 9. FORMER GENERAL PARTNERS' CAPITAL ACCOUNTS: ------------------------------------------ The capital account balance of the former general partners as of May 26, 1993, the date of their removal as general partners pursuant to the results of a solicitation of written consents from the Limited Partners, was a deficit of $840,229. At December 31, 1993, the former general partners' deficit capital account balance in the amount of $840,229 was reallocated to the Limited Partners. 10. SUBSEQUENT EVENTS: ------------------ On August 15, 2000, the Partnership made distributions to the Limited Partners for the Second Quarter of 2000 of $575,000 amounting to approximately $12.42 per limited partnership interest. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources: - -------------------------------- Investment Properties and Net Investment in Direct Financing Leases - ------------------------------------------------------------------- The investment properties, including equipment held by the Partnership at June 30, 2000, were originally purchased at a price, including acquisition costs, of approximately $23,295,000. DenAmerica, Inc. did not renew the lease on its Denny's store on Camelback Road in Phoenix, Arizona upon the original lease's expiration on January 30, 1998, but continued to operate the restaurant and pay 11 rent through December 31, 1999. During January 2000, the tenant notified Management that it had vacated the premises and ceased paying rent. Management has negotiated a termination of the ground lease for this property. Pursuant to the terms of the agreement, the Partnership will pay $90,000.00 during the Third Quarter of 2000 in exchange for all future ground lease obligations and will return possession of the property to the ground lessor. Other Assets - ------------ Cash and cash equivalents were approximately $1,166,000 at June 30, 2000, compared to $1,387,000 at December 31, 1999. The Partnership designated cash of $575,000 to fund the Second Quarter 2000 distributions to Limited Partners, $122,000 for the payment of accounts payable and accrued expenses, and the remainder represents reserves deemed necessary to allow the Partnership to operate normally. Cash generated through the operations of the Partnership's investment properties and sales of investment properties will provide the sources for future fund liquidity and Limited Partner distributions. The Partnership established the Trust during the Fourth Quarter of 1993, deposited $100,000 in the Trust during 1993 and completed funding of the Trust with $150,000 during 1994. The provision to establish the Trust was included in the PMA for the indemnification of TPG, in the absence of fraud or gross negligence, from any claims or liabilities that may arise from TPG acting as Permanent Manager. The Trust is owned by the Partnership. For additional information regarding the Trust refer to Note 8 to the financial statements. Liabilities - ----------- Accounts payable and accrued expenses at June 30, 2000, in the amount of $59,000, primarily represented the accrual of legal and auditing fees. Partners' Capital - ----------------- Net income for the quarter was allocated between the General Partner and the Limited Partners, 1% and 99%, respectively, as provided in the Partnership Agreement and the Amendment to the Partnership Agreement, as discussed more fully in Note 4 of the financial statements. The former general partners' deficit capital account balance was reallocated to the Limited Partners at December 31, 1993. Refer to Note 9 to the financial statements for additional information regarding the reallocation. Cash distributions paid to the Limited Partners and to the General Partner during 2000 of $1,560,000 and $2,835, respectively, have also been in accordance with the amended Partnership Agreement. The Second Quarter 2000 distribution of $575,000 was paid to the Limited Partners on August 15, 2000. Results of Operations: - ---------------------- The Partnership reported net income for the quarter ended June 30, 2000, in the amount of $356,000 compared to net income for the quarter ended June 30, 1999, of $577,000. For the six months ended June 30, 2000 and 1999, net income totaled $709,000 and $1,071,000, respectively. Revenues - -------- Total revenues were $613,000 and $795,000, for the quarters ended June 30, 2000 and 1999, respectively, and were $1,197,000 and $1,517,000 for the six months ended June 30, 2000 and 1999 , respectively. The decrease is primarily due to an accounting standards change which precludes the recognition of 12 percentage rents until the tenant has reached their specified breakpoint. In the past, percentage rents were accrued throughout the year in which they were earned, based on previous Generally Accepted Accounting Principles. The 1999 Second Quarter revenue also included a $73,000 note payment from a former tenant which had previously been written off. Total revenues should approximate $2,700,000 annually based on leases currently in place. Future revenues may decrease with tenant defaults and/or sales of Partnership properties. They may also increase with additional rents due from tenants, if those tenants experience sales levels which require the payment of additional rent to the Partnership. Expenses - -------- For the quarters ended June 30, 2000 and 1999, cash expenses amounted to approximately 26% and 11%, of total revenues, respectively. For the six months ended June 30, 2000 and 1999, cash expenses totaled 25% and 15%, respectively. Total expenses, including non-cash items, amounted to approximately 42% and 27%, of total revenues for the quarters ended June 30, 2000 and 1999, respectively, and totaled 41% and 29% for the six months ended June 30, 2000 and 1999, respectively. A reversal of a property tax accrual was recorded during 1999 due to the assumption of liability for these taxes by a tenant who assumed the lease. The percentages are also adversely affected by the reduced revenue recorded during 2000 as a result of the aforementioned accounting change. Inflation: - ---------- Inflation has a minimal effect on operating earnings and related cash flows from a portfolio of triple net leases. By their nature, such leases actually fix revenues and are not impacted by rising costs of maintenance, insurance, or real estate taxes. If inflation causes operating margins to deteriorate for lessees if expenses grow faster than revenues, then, inflation may well negatively impact the portfolio through tenant defaults. It would be misleading to associate inflation with asset appreciation for real estate, in general, and the Partnership's portfolio, specifically. Due to the "triple net" nature of the property leases, asset values generally move inversely with interest rates. Item 3. Quantitative and Qualitative Disclosure About Market Risk None. 13 PART II - OTHER INFORMATION Items 1 - 5. Not Applicable. Item 6. Exhibits and Reports on Form 8-K (a) Listing of Exhibits: 99.0 Correspondence to the Limited Partners dated August 15, 2000, regarding the Second Quarter 2000 distribution. (b) Reports on Form 8-K: The Registrant filed no reports on Form 8-K during the second quarter of fiscal year 2000. 14 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP By: The Provo Group, Inc., General Partner By: /s/ Bruce A. Provo -------------------------------- Bruce A. Provo, President Date: August 14, 2000 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. By: The Provo Group, Inc., General Partner By: /s/ Bruce A. Provo, -------------------------------- Bruce A. Provo, President Date: August 14, 2000 By: /s/ Kristin J. Atkinson -------------------------------- Kristin J. Atkinson Vice President - Finance and Administration Date: August 14, 2000 15 EX-99 2 0002.txt CORRESPONDENCE TO THE LIMITED PARTNERS EXHIBIT 99 DiVall Insured Income Properties 2, L.P. QUARTERLY NEWS - -------------------------------------------------------------------------------- A publication of The Provo Group, Inc. SECOND QUARTER 2000 Partnership Measures Up We are happy to report again this quarter .... that there is little to report. Rents are being paid on a timely basis, distributions are on target, there are no tenant disputes, lawsuits or other major issues surrounding this Partnership. Last quarter we reported several delinquencies in rent, nearly all of which have been collected. (See page 2 for more details). Based on the monthly sales we have received to date, nearly all of the stores seem to be performing very well. All but three of the Wendy's stores have been successful in increasing their monthly sales, as have Hooters, Miami Subs and Denny's (Northern). The Denny's located on N. 7/th/ Street shows some sales decline, as do all the Hardee's locations. We have been contacted by the corporate office of Hardee's. They are currently going through a major re- franchising program. Once this process is complete, we hope to see a new trend in the sales figures. We have been notified that the Hardee's located in South Milwaukee has been slated for closing. If this were to occur, the store would continue to be liable for the rent charges. The following information was taken from the May/June 2000 edition of The Partnership Spectrum/1/. It compares triple-net-lease Partnerships (similar to DiVall) and we found it very informative. (This table continues onto the next page, see for DiVall comparisons)
- -------------------------------------------------------------------------------------------------- Partnership Value Per Unit Average Trade Average Debt Distribution Price Discount Rate (Qtrly$) % - -------------------------------------------------------------------------------------------------- CNL Income Fund II $460.91 - GP $345.00 25% Low $41.25 12.0% - -------------------------------------------------------------------------------------------------- CNL Income Fund III $403.85 -GP $363.82 10% Low $40.00 11.0% - -------------------------------------------------------------------------------------------------- CNL Income Fund IV $420.38 -GP $366.90 13% Low $40.00 10.9% - -------------------------------------------------------------------------------------------------- CNL Income Fund V $380.80 -GP $337.27 11% Low $40.00 11.9% - -------------------------------------------------------------------------------------------------- CNL Income Fund VI $503.06 -GP $381.05 24% Low $45.00 11.8% - -------------------------------------------------------------------------------------------------- CNL Income Fund VII $1.01-GP $0.74 27% Low $.09 12.2% - -------------------------------------------------------------------------------------------------- CNL Income Fund VIII $1.08 $0.82 24% Low $.09 11.0% - -------------------------------------------------------------------------------------------------- CNL Income Fund IX $10.01 -GP $7.82 22% Low $.90 11.5% - --------------------------------------------------------------------------------------------------
__________________ /1/ Copyright 2000 by Partnership Profiles, Inc. Editor: Spencer Jeffries - -------------------------------------------------------------------------------------------------- CNL Income Fund X $10.08 -GP $8.14 19% Low $.90 11.1% - -------------------------------------------------------------------------------------------------- CNL Income Fund XI $10.64 -GP $8.35 22% Low $.875 10.5% - -------------------------------------------------------------------------------------------------- CNL Income Fund XII $10.56 -GP $8.46 20% Low $.85 10.0% - -------------------------------------------------------------------------------------------------- CNL Income Fund XIII $9.85 -GP $8.01 19% Low $.85 10.6% - -------------------------------------------------------------------------------------------------- CNL Income Fund XIV $9.99 -GP $7.27 27% Low $.825 11.3% - -------------------------------------------------------------------------------------------------- CNL Income Fund XV $9.61 -GP $7.48 22% Low $.80 10.7% - -------------------------------------------------------------------------------------------------- CNL Income Fund XVI $9.52 -GP $7.50 21% Low $.80 10.7% - -------------------------------------------------------------------------------------------------- CNL Income Fund XVII $9.64 -GP $7.97 17% Low $.80 10.0% - -------------------------------------------------------------------------------------------------- CNL Income Fund XVIII $9.80 -GP $7.43 24% Low $.80 10.8% - -------------------------------------------------------------------------------------------------- Corporate Property $10.00 - I $7.26 27% High $.71 9.8% Associates 10 - -------------------------------------------------------------------------------------------------- Corporate Property $10.40 - I $8.53 18% High $.82 9.6% Associates 12 - -------------------------------------------------------------------------------------------------- Corporate Realty $16.83 - I $12.14 28% High $1.20 9.9% Income Fund I - -------------------------------------------------------------------------------------------------- DiVall Insured Income $500 - GP $390.00 22% Low $45.76 11.7% Properties 2 - -------------------------------------------------------------------------------------------------- Net I LP $808.54 - I $662.65 18% High $50.04 7.6% - -------------------------------------------------------------------------------------------------- Net 2 LPO $87.31 - I $69.22 21% High $5.00 7.2% - -------------------------------------------------------------------------------------------------- Carey Institutional $13.00 - I $9.44 27% High $.83 8.8% Properties - --------------------------------------------------------------------------------------------------
Average Discount = 21% Average Distribution Yield = 10.5% ===== A special thank you to The Partnership Spectrum for allowing us to reprint this informative table for our investors. - -------------------------------------------------------------------------------- PROPERTY HIGHLIGHTS . Mulberry Street Grill (Formerly Mr. Munchies - Indian School Road) was delinquent at 06/30/00 in the amount of $15,070.90. Management was been working diligently with this new operator to get the balance due paid in full. The operator has made arrangements to make partial payments over the next several months. . Denny's (Camelback Road) - This property remains vacant at June 30, 2000. The property has a ground lease which did not expire until August 2002. Management was successful in negotiating for an early termination. Therefore, we will not have any future ground rent or real estate tax liability. PAGE 3 DIVALL 2 2 Q 00 DISTRIBUTION HIGHLIGHTS . 9.77% (approx.) annualized return from operations based on $23,550,000 (estimated net asset value as of December 31, 1999). . $575,000 total amount distributed for the Second Quarter 2000 which was consistent with projections. . $12.42 per unit (approx.) for the First Quarter 2000. . $1,033.00 to $835.00 range of distributions per unit from the first unit ----- sold to the last unit sold before the offering closed (February 1990), ---- respectively. (NOTE: Distributions are from both cash flow from operations ---- and "net" cash activity from financing and investing activities.) ____________________________________________________ STATEMENTS OF INCOME AND CASH FLOW HIGHLIGHTS . 14% decrease in "total" operating revenues from projections. . As reported last quarter, the decrease in revenues is almost entirely due to an accounting change, which doesn't impact cash. Additionally, Denny's - Camelback vacated their property. . There was a 16% increase in expenses. . Expenses were higher than anticipated partially due to the increase in printing and mailing costs some of which were expected to be incurred during the first quarter. Additionally, there have been unexpected legal fees due to the potential eviction of Denny's - N. 7/th/ Street which was resolved last quarter. ____________________________________________________ For questions or additional information, please contact Investor Relations at: 1-800-547-7686 or 1-816-421-7444 All written inquiries may be mailed or faxed to: The Provo Group, Inc. 101 West 11th Street, Suite 1110 Kansas City, Missouri 64105 (FAX 816-221-2130) E-Mail: jbiggs@theprovogroup.com ____________________________________________________ - -------------------------------------------------------------------------------- DIVALL INSURED INCOME PROPERTIES 2 L.P. STATEMENTS OF INCOME AND CASH FLOW CHANGES FOR THE THREE MONTH PERIOD ENDED JUNE 30, 2000
- ------------------------------------------------------------------------------------------------------------------------------------ PROJECTED ACTUAL VARIANCE -------------------------------------------------------------- 2ND 2ND QUARTER QUARTER BETTER OPERATING REVENUES 6/30/00 6/30/00 (WORSE) -------------- ------------ ------------- Rental income $ 695,536 $ 595,929 ($99,607) Interest income 13,600 15,212 1,612 Other income 0 2,106 2,106 -------------- ------------ ------------- TOTAL OPERATING REVENUES $ 709,136 $ 613,247 ($95,889) -------------- ------------ ------------- OPERATING EXPENSES Insurance $ 4,317 $ 4,404 ($87) Management fees 46,872 46,928 (56) Overhead allowance 3,783 3,789 (6) Advisory Board 2,599 3,968 (1,369) Administrative 16,290 39,598 (23,308) Professional services 8,850 6,355 2,495 Auditing 12,000 12,800 (800) Legal 4,500 14,352 (9,852) Write-off uncollectible receivables 0 6,810 (6,810) Defaulted tenants 1,650 1,390 260 -------------- ------------ ------------- TOTAL OPERATING EXPENSES $ 100,861 $ 140,394 ($39,533) -------------- ------------ ------------- GROUND RENT $ 31,650 $ 26,389 $ 5,261 -------------- ------------ ------------- INVESTIGATION AND RESTORATION EXPENSES $ 0 $ 37 ($37) -------------- ------------ ------------- NON-OPERATING EXPENSES Depreciation $ 88,098 $ 88,098 $ 0 Amortization 2,364 2,757 (393) -------------- ------------ ------------- TOTAL NON-OPERATING EXPENSES $ 90,462 $90,855 ($393) -------------- ------------ ------------- TOTAL EXPENSES $ 222,973 $ 257,675 ($34,702) -------------- ------------ ------------- NET INCOME (LOSS) $ 486,163 $ 355,572 ($130,591) -------------- ------------ ------------- OPERATING CASH RECONCILIATION: VARIANCE ------------- Depreciation and amortization 90,462 90,855 393 Recovery of amounts previously written off 0 (927) (927) Write-off uncollectible receivables 0 6,810 6,810 (Increase) Decrease in current assets (106,530) 49,422 155,952 Increase (Decrease) in current liabilities 10,080 5,075 (5,005) (Increase) Decrease in cash reserved for payables (12,025) (6,000) 6,025 Advance from current cash flows for future distributions 105,500 70,500 (35,000) -------------- ------------ ------------- Net Cash Provided From Operating Activities $ 573,650 $ 571,307 ($2,343) -------------- ------------ ------------- CASH FLOWS FROM (USED IN) INVESTING AND FINANCING ACTIVITIES Recoveries from former general partners 0 927 927 Proceeds from sale of property and equipment 0 0 0 -------------- ------------ ------------- Net Cash Provided From Investing And Financing Activities $ 0 $ 927 $ 927 -------------- ------------ ------------- Total Cash Flow For Quarter $ 573,650 $ 572,234 ($1,416) Cash Balance Beginning of Period 1,260,497 1,233,624 (26,873) Less 1st quarter distributions paid 5/00 (575,000) (575,000) 0 Change in cash reserved for payables or future distributions (93,475) (64,500) 28,975 -------------- ------------ ------------- Cash Balance End of Period $1,165,672 $1,166,358 $ 686 Cash reserved for 2nd quarter L.P. distributions (575,000) (575,000) 0 Cash reserved for payment of payables (290,749) (327,000) (36,251) -------------- ------------ ------------- Unrestricted Cash Balance End of Period $ 299,923 $ 264,358 ($35,565) ============== ============ ============= - ------------------------------------------------------------------------------------------------------------------------------------ PROJECTED ACTUAL VARIANCE -------------------------------------------------------------- * Quarterly Distribution $ 575,000 $ 575,000 $ 0 Mailing Date 8/15/00 (enclosed) - - ------------------------------------------------------------------------------------------------------------------------------------
* Refer to distribution letter for detail of quarterly distribution. PROJECTIONS FOR DISCUSSION PURPOSES DIVALL INSURED INCOME PROPERTIES 2 LP 2000 PROPERTY SUMMARY AND RELATED ESTIMATED RECEIPTS PORTFOLIO (Note 1)
---------------------------- ------------------------------------ --------------------------- REAL ESTATE EQUIPMENT TOTALS ---------------------------- ------------------------------------ --------------------------- ANNUAL LEASE ANNUAL - ---------------------------------- BASE % EXPIRATION LEASE % ANNUAL CONCEPT LOCATION COST RENT YIELD DATE COST RECEIPTS RETURN COST RECEIPTS RETURN - ---------------------------------- ---------------------------- ------------------------------------ --------------------------- APPLEBEE'S COLUMBUS, OH 1,059,465 135,780 12.82% 84,500 0 0.00% 1,143,965 135,780 11.87% BLOCKBUSTER OGDEN, UT 646,425 100,554 15.56% 646,425 100,554 15.56% DENNY'S (3) PHOENIX, AZ 295,750 0 0.00% 224,376 0 0.00% 520,126 0 0.00% DENNY'S PHOENIX, AZ 972,726 65,000 6.68% 183,239 0 0.00% 1,155,965 65,000 5.62% DENNY'S PHOENIX, AZ 865,900 115,200 13.30% 221,237 0 0.00% 1,087,137 115,200 10.60% DENNY'S TWIN FALLS, ID 699,032 83,200 11.90% 190,000 0 0.00% 889,032 83,200 9.36% MR. MUNCHIES (3) PHOENIX, AZ 500,000 50,800 10.16% 14,259 0 0.00% 514,259 50,800 9.88% HARDEE'S (5) S MILWAUKEE, WI 808,032 64,000 7.92% 808,032 64,000 7.92% HARDEE'S (5) HARTFORD, WI 686,563 64,000 9.32% 686,563 64,000 9.32% HARDEE'S (5) MILWAUKEE, WI 1,010,045 76,000 7.52% (4) 260,000 0 0.00% 1,421,983 76,000 5.34% " " 151,938 0 0.00% HARDEE'S (5) FOND DU LAC, WI 849,767 88,000 10.36% (4) 290,469 0 0.00% 1,140,236 88,000 7.72% HARDEE'S (5) MILWAUKEE, WI 0 0 0.00% 780,000 0 0.00% 780,000 0 0.00% HOOTER'S R. HILLS, TX 1,246,719 95,000 7.62% 1,246,719 95,000 7.62% HOSTETTLER'S DES MOINES, IA 845,000 55,584 6.58% 52,813 0 0.00% 897,813 55,584 6.19% KFC SANTA FE, NM 451,230 60,000 13.30% 451,230 60,000 13.30% MIAMI SUBS PALM BEACH, FL 743,625 39,000 5.24% 743,625 39,000 5.24% - ---------------------------------- ---------------------------- ------------------------------------ ---------------------------
Note 1: This property summary includes only current property and equipment held by the Partnership. Equipment lease receipts shown include a return of capital. 2: Rent is based on 12.5% of monthly sales. Rent projected for 2000 is based on 1999 sales levels. 3: The Partnership entered into a long-term ground lease in which the Partnership is responsible for payment of rent. 4: The lease was terminated and the equipment sold to Hardee's Food Systems in conjunction with their assumption of the Terratron leases in November 1996. 5: These leases were assumed by Hardee's Food Systems at a reduced rental rate from that stated in the original leases. Page 1 of 2 PROJECTIONS FOR DISCUSSION PURPOSES DIVALL INSURED INCOME PROPERTIES 2 LP 1999 PROPERTY SUMMARY AND RELATED ESTIMATED RECEIPTS
PORTFOLIO (Note 1) ----------------------------- -------------------------------------- ---------------------------- REAL ESTATE EQUIPMENT TOTALS ----------------------------- -------------------------------------- ---------------------------- ANNUAL LEASE ANNUAL BASE % EXPIRATION LEASE % TOTAL - ------------------------------- CONCEPT LOCATION COST RENT YIELD DATE COST RECEIPTS RETURN COST RECEIPTS RETURN - ------------------------------- ----------------------------- -------------------------------------- ---------------------------- POPEYE'S PARK FOREST, IL 580,938 77,280 13.30% 580,938 77,280 13.30% SUNRISE PS PHOENIX, AZ 1,084,503 127,920 11.80% 79,219 0 0.00% 1,182,735 127,920 10.82% 19,013 0 0.00% VILLAGE INN GRAND FORKS, ND 739,375 84,000 11.36% 739,375 84,000 11.36% WENDY'S AIKEN, SC 633,750 90,480 14.28% 633,750 90,480 14.28% WENDY'S CHARLESTION, SC 580,938 76,920 13.24% 580,938 76,920 13.24% WENDY'S N. AUGUSTA, SC 660,156 87,780 13.30% 660,156 87,780 13.30% WENDY'S AUGUSTA, GA 728,813 96,780 13.28% 728,813 96,780 13.28% WENDY'S CHARLESTON, SC 596,781 76,920 12.89% 596,781 76,920 12.89% WENDY'S AIKEN, SC 776,344 96,780 12.47% 776,344 96,780 12.47% WENDY'S AUGUSTA, GA 649,594 86,160 13.26% 649,594 86,160 13.26% WENDY'S CHARLESTON, SC 528,125 70,200 13.29% 528,125 70,200 13.29% WENDY'S MT. PLEASANT, SC 580,938 77,280 13.30% 580,938 77,280 13.30% WENDY'S MARTINEZ, GA 633,750 84,120 13.27% 633,750 84,120 13.27% - --------------------------------- ----------------------------- -------------------------------------- ---------------------------- - --------------------------------- ----------------------------- -------------------------- ---------------------------- PORTFOLIO TOTALS (28 Properties) 20,454,284 2,224,738 10.88% 2,551,063 0 0.00% 23,005,347 2,224,739 9.67% - --------------------------------- ----------------------------- -------------------------- ----------------------------
Note 1: This property summary includes only current property and equipment held by the Partnership. Equipment lease receipts shown include a return of capital. Page 2 of 2 EX-27 3 0003.txt FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JUNE 30, 2000 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS 6-MOS DEC-31-1999 DEC-31-1999 APR-01-2000 JAN-01-2000 JUN-30-2000 JUN-30-2000 1,166,358 1,166,358 345,223 345,223 244,783 244,783 0 0 0 0 1,756,364 1,756,364 20,166,587 20,166,587 5,663,373 5,663,373 16,259,578 16,259,578 239,832 239,832 0 0 0 0 0 0 0 0 16,019,746 16,019,746 16,259,575 16,259,578 595,930 1,162,743 613,248 1,196,916 0 0 0 0 250,566 481,269 6,810 6,810 0 0 355,572 708,837 0 0 355,572 708,837 0 0 0 0 0 0 355,572 708,837 7.61 15.16 7.61 15.16
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