-----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, CRo/a2Ipm0c3bQ8LjhKTBmRdU+SoI5wHOKE7KQ5oIMCgy5ivSYyDqHlhLpIS9gm3 pkTw6yNF+cw19f5eCoEsuA== 0000950131-98-003454.txt : 19980520 0000950131-98-003454.hdr.sgml : 19980520 ACCESSION NUMBER: 0000950131-98-003454 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19980519 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP CENTRAL INDEX KEY: 0000825788 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 391606834 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFA14A SEC ACT: SEC FILE NUMBER: 000-17686 FILM NUMBER: 98628101 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 DEFA14A 1 ADDITIONAL PROXY MATERIAL SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2)) [_] Definitive Proxy Statement [X] Definitive Additional Materials [_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP - -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [_] No fee required [_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------------- (5) Total fee paid: ------------------------------------------------------------------------- [X] Fee paid previously with preliminary materials. [_] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: $3,908.80 ------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: Schedule 14A ------------------------------------------------------------------------- (3) Filing Party: DiVall Insured Income Properties 2 Limited Partnership ------------------------------------------------------------------------- (4) Date Filed: April 13, 1998 ------------------------------------------------------------------------- EX-99 2 CORRESPONDENCE TO THE LIMITED [THE PROVO GROUP LOGO] DiVall Insured Income Properties 2, L.P. QUARTERLY NEWS - -------------------------------------------------------------------------------- A publication of The Provo Group, Inc. FIRST QUARTER 1998 WHY ALL THE INTEREST ... IN MY INTERESTS? Madison, Wisconsin Recently you may have been subject to the "feeding" frenzy occurring for your interests in the Partnership. A common question we are hearing is "why all the interest in my interests?" As we have communicated to you before, it's really quite simple -- the interests you own in the Partnership offer immediate value to recent third-party tenderers such as U.S. Restaurant Properties, Inc., Smithtown Bay, LLC, and Whitney Year 2030. Should you be tendering your interests to any of these parties? As your General Partner, we don't think so, particularly if you want to be the recipient of "full" value. We believe you should be the one receiving the final return on your long-term investment NOT someone who buys your interests at a discount for future profit opportunities. In accordance with the Agreement of Limited Partnership, we have requested your consent to sell the properties in the Partnership -- which means that the Partnership will be dissolved following the sale of the assets and final distribution of the proceeds to you. If a majority of Limited Partners are in agreement that the market conditions are favorable for producing maximized value on your interests through liquidation now, we will proceed with the sale of the properties and make a final distribution to you. Although the strong interest in your interests may be causing you concern or confusion -- think of it this way, you have something they want, and you have control over whether they can have it or not. ------------------------ OTHER NEWS INSIDE... . Distributions More Than Budgeted........Distribution Highlights, pg 2 . First Quarter 1998 Property Sales...........Property Highlights, pg 3 [THE PROVO GROUP LOGO] Page 2 DiVall 2 1 Q 98 =========================== Distribution Highlights . 8.0% (approx.) annualized return from operations and 5.0% (approx.) non- annualized return of capital from a special distribution related to the two (2) Denny's property sales and a land easement granted to a property based on $33,000,000 ("net" remaining initial investment). . $50.24 per unit (approx.) for the First Quarter 1998 from both cash flow from operations and investing activities. (NOTE: Original units were purchased for $1,000/unit.) . $2,325,000 total amount distributed for the First Quarter 1998 which was $175,000 more than projected. The "higher" than budgeted distribution is primarily due to better than expected collection of rents receivable, including percentage rents billed during the First Quarter 1998. . $913.00 to $715.00 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 . 7% increase in "total" operating revenues from projections. . 21% increase in "total" expenses from projections. . 2% increase in net income from projections. . $87,000 more than budgeted operating revenues were received by the Partnership for several reasons, from one month's rent collected on the "sold" Denny's; higher than expected interest income received on these two (2) property sales; previously written off equipment lease payments were received on the Denny's lease; and vacancies did not occur as budgeted. . Property appraisals in the amount of $58,000 were accrued at the quarter's end in connection with the proposed liquidation of the partnership. [THE PROVO GROUP LOGO] Page 3 DiVall 2 1 Q 98 =========================== Property Highlights Vacancies --------- . Denny's restaurant (Twin Falls, ID) was vacant at March 31, 1998. Management is currently working with the tenant to relet this property. (NOTE: This tenant continues to make rental payments.) Rents Receivable ---------------- . Applebee's (Columbus, OH) was $9,700 delinquent in percentage rent at March 31, 1998. Scheduled rent is current. . Popeye's (Park Forest, IL) was $25,000 delinquent in percentage rent only at March 31, 1998. (NOTE: This tenant has since paid $10,000 toward this delinquency.) Property Sales -------------- . Denny's restaurants located in Daytona Beach and New Smyrna, Florida, were both sold during the First Quarter 1998. =========================== Return of Capital The following table has been updated to present the breakdown of distributions since the Partnership's first quarterly distribution, for the period ended June 30, 1998 through March 31, 1998.
Distribution Capital Analysis Balance ------------- ----------- Original Capital Balance -- $46,280,300 Cash Flow From Operations Since Inception $24,526,890 -- Total Distributions Since Inception (37,838,868) -- ------------ (Return) of Capital ($13,311,978) (13,311,978) ============ ----------- "Net" Remaining Initial Investment by Original Partners -- $32,968,322 ===========
(NOTE: For a more individualized discussion of return of capital contact Investor Relations.) [THE PROVO GROUP LOGO] Page 4 DiVall 2 1 Q 98 =========================== Questions & Answers . When can I expect my next distribution mailing? Your distribution correspondence for the Second Quarter of 1998 is scheduled to be mailed on August 14, 1998. * * * ================================================================================ For questions or additional information, please contact Investor Relations at: 1-800-547-7686 or 1-608-244-7661 All written inquiries may be mailed or faxed to: The Provo Group, Inc. Post Office Box 8673 1410 Northport Drive Madison, Wisconsin 53708-8673 Madison, Wisconsin 53704 (FAX 608-244-7663) ================================================================================
DIVALL INSURED INCOME PROPERTIES 2 L.P. STATEMENTS OF INCOME AND CASH FLOW CHANGES FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1998 - --------------------------------------------------------------------------------------------------------- PROJECTED ACTUAL VARIANCE --------------------------------------- 1ST 1ST QUARTER QUARTER BETTER OPERATING REVENUES 3/31/98 3/31/98 (WORSE) ----------- ------------ ------------ Rental income $ 613,634 $ 674,321 $ 60,687 Interest income 26,550 38,838 12,288 Gain on sale of assets 556,227 556,227 0 Other income 12,001 25,955 13,954 ----------- ------------ ------------ TOTAL OPERATING REVENUES $1,208,412 $ 1,295,341 $ 86,929 ----------- ------------ ------------ OPERATING EXPENSES Insurance $ 6,624 $ 5,793 $ 831 Management fees 44,965 44,757 208 Overhead allowance 3,627 3,611 16 Advisory Board 3,600 4,158 (558) Administrative 26,364 30,977 (4,613) Professional services 5,450 6,427 (977) Appraisals 0 56,150 (56,150) Disposition fees 66,000 66,000 0 Auditing 19,500 19,383 117 Legal 7,500 16,797 (9,297) Defaulted tenants 2,850 (1,011) 3,861 ----------- ------------ ------------ TOTAL OPERATING EXPENSES $ 186,480 $ 253,042 $ (66,562) ----------- ------------ ------------ GROUND RENT $ 31,200 $ 32,493 $ (1,293) ----------- ------------ ------------ INVESTIGATION AND RESTORATION EXPENSES $ 474 $ 414 $ 60 ----------- ------------ ------------ NON-OPERATING EXPENSES Depreciation $ 105,798 $ 105,797 $ 1 Amortization 2,313 2,313 0 ----------- ------------ ------------ TOTAL NON-OPERATING EXPENSES $ 108,111 $ 108,110 $ 1 ----------- ------------ ------------ TOTAL EXPENSES $ 326,265 $ 394,059 $ (67,794) ----------- ------------ ------------ NET INCOME $ 882,147 $ 901,282 $ 19,135 OPERATING CASH RECONCILIATION: VARIANCE ------------ Depreciation and amortization 108,111 108,110 (1) Gain on sale of assets (556,227) (556,227) 0 (Increase) Decrease in current assets 95,280 205,205 109,925 Increase (Decrease) in current liabilities (87,391) 1,514 88,905 (Increase) Decrease in cash reserved for payables 42,871 800 (42,071) Advance from current cash flows for future distributions (1,200) (1,200) 0 ----------- ------------ ------------ Net Cash Provided From Operating Activities $ 483,591 $ 659,484 $ 175,893 ----------- ------------ ------------ CASH FLOWS FROM (USED IN) INVESTING AND FINANCING ACTIVITIES Recoveries from former G.P. affiliates 0 0 0 Proceeds from property sales 1,666,675 1,665,625 (1,050) ----------- ------------ ------------ Net Cash Provided From Investing And Financing Activities $1,666,675 $ 1,665,625 $ (1,050) ----------- ------------ ------------ Total Cash Flow For Quarter $2,150,266 $ 2,325,109 $ 174,843 Cash Balance Beginning of Period 1,322,532 1,449,785 127,253 Less 4th quarter distributions paid 2/98 (875,000) (875,000) 0 Change in cash reserved for payables or future distributions (41,671) 400 42,071 ----------- ------------ ------------ Cash Balance End of Period $2,556,127 $ 2,900,294 $ 344,167 Cash reserved for 1st quarter L.P. distributions (2,150,000) (2,325,000) (175,000) Cash reserved for payment of payables (125,000) (316,200) (191,200) ----------- ------------ ------------ Unrestricted Cash Balance End of Period $ 281,127 $ 259,094 $ (22,033) =========== ============ ============ - --------------------------------------------------------------------------------------------------------- PROJECTED ACTUAL VARIANCE --------------------------------------- * Quarterly Distribution $2,150,000 $ 2,325,000 $ 175,000 Mailing Date 5/15/98 (enclosed) - - --------------------------------------------------------------------------------------------------------- * Refer to distribution letter for detail of quarterly distribution.
[INSERT LOGO] TheProvoGroup PROJECTIONS FOR DISCUSSION PURPOSES DIVALL INSURED INCOME PROPERTIES 2 LP 1998 PROPERTY SUMMARY AND RELATED ESTIMATED RECEIPTS PORTFOLIO (Note 1)
------------------------------ ------------------------------------------------- REAL ESTATE EQUIPMENT ------------------------------ ------------------------------------------------- ANNUAL LEASE ANNUAL - ------------------------------------ BASE % EXPIRATION LEASE % CONCEPT LOCATION COST RENT YIELD DATE COST RECEIPTS RETURN - ------------------------------------ ------------------------------ ------------------------------------------------- APPLEBEE'S COLUMBUS, OH 1,059,465 135,780 12.82% 84,500 0 0.00% BLOCKBUSTER OGDEN, UT 646,425 100,554 15.56% RED APPLE REST. CEDAR RAPIDS, IA 660,156 54,000 8.18% DENNY'S (2) (3) PHOENIX, AZ 295,750 39,000 13.19% 224,376 0 0.00% DENNY'S PHOENIX, AZ 972,726 65,000 6.68% 183,239 0 0.00% DENNY'S (2) PHOENIX, AZ 865,900 86,000 9.93% 221,237 0 0.00% DENNY'S TWIN FALLS, ID 699,032 83,200 11.90% 04/30/99 190,000 37,860 19.93% DENNY'S (2) (3) PHOENIX, AZ 500,000 37,000 7.40% 14,259 0 0.00% HARDEE'S (5) S MILWAUKEE, WI 808,032 64,000 7.92% HARDEE'S (5) HARTFORD, WI 686,563 64,000 9.32% HARDEE'S (5) MILWAUKEE, WI 1,010,045 76,000 7.52% (4) 260,000 0 0.00% 151,938 0 0.00% HARDEE'S (5) FOND DU LAC, WI 849,767 88,000 10.36% (4) 290,469 0 0.00% HARDEE'S (5) MILWAUKEE, WI 0 0 0.00% 780,000 0 0.00% HOOTER'S R. HILLS, TX 1,246,719 95,000 7.62% HOSTETTLER'S DES MOINES, IA 845,000 66,000 7.81% 52,813 0 0.00% KFC SANTA FE, NM 451,230 60,000 13.30% MIAMI SUBS PALM BEACH, FL 743,625 39,000 5.24% - ------------------------------------ ------------------------------ -------------------------------------------------
- -------------------------------------------------- ORIGINAL EQUITY $46,280,300 NET DISTRIBUTION OF CAPITAL SINCE INCEPTION $13,311,978 ----------- CURRENT EQUITY $32,968,322 ----------- - --------------------------------------------------
- -------------------------------- ---------- TOTAL % ON 32,968,322 ANNUAL EQUITY COST RECEIPTS RETURN RAISE - -------------------------------- ---------- 1,143,965 135,780 11.87% 646,425 100,554 15.56% 660,156 54,000 8.18% 520,126 39,000 7.50% 1,155,965 65,000 5.62% 1,087,137 86,000 7.91% 889,032 121,060 13.62% 514,259 37,000 7.19% 808,032 64,000 7.92% 686,563 64,000 9.32% 1,421,983 76,000 5.34% 1,140,236 88,000 7.72% 780,000 0 0.00% 1,246,719 95,000 7.62% 897,813 66,000 7.35% 451,230 60,000 13.30% 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 1998 is based on 1997 sales levels. 3: The Partnership entered into a long-term ground lease in which the Partnership is responsible for payment of rent. The annual base rent shown is net of the underlying ground lease 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 [LOGO OF PROVO GROUP]
----------------------------------------- ORIGINAL EQUITY $46,280,300 PROJECTIONS FOR NET DISTRIBUTION OF DISCUSSION PURPOSES DIVALL INSURED INCOME PROPERTIES 2 LP CAPITAL SINCE INCEPTION $13,311,978 1997 PROPERTY SUMMARY ----------- AND RELATED ESTIMATED RECEIPTS CURRENT EQUITY $32,968,322 =========== ----------------------------------------- ------------------------------- -------------------------------------------- PORTFOLIO (Note 1) REAL ESTATE EQUIPMENT ------------------------------- -------------------------------------------- ANNUAL LEASE ANNUAL - ------------------------------------- BASE % EXPIRATION LEASE % CONCEPT LOCATION COST RENT YIELD DATE COST RECEIPTS RETURN - ------------------------------------- ------------------------------- -------------------------------------------- POPEYE'S PARK FOREST, IL 580,938 77,280 13.30% SUNRISE PS PHOENIX, AZ 1,084,503 127,920 11.80% 79,219 0 0.00% 19,013 0 0.00% VILLAGE INN GRAND FORKS, ND 739,375 84,000 11.36% WENDY'S AIKEN, SC 633,750 90,480 14.28% WENDY'S CHARLESTON, SC 580,938 76,920 13.24% WENDY'S N. AUGUSTA, SC 660,156 87,780 13.30% WENDY'S AUGUSTA, GA 728,813 96,780 13.28% WENDY'S CHARLESTON, SC 596,781 76,920 12.89% WENDY'S AIKEN, SC 776,344 96,780 12.47% WENDY'S AUGUSTA, GA 649,594 86,160 13.26% WENDY'S CHARLESTON, SC 528,125 70,200 13.29% WENDY'S MT. PLEASANT, SC 580,938 77,280 13.30% WENDY'S MARTINEZ, GA 633,750 84,120 13.27% CASH-A-CHECK HALLANDALE, FL 792,188 30,000 3.79% - ------------------------------------- ------------------------------- -------------------------------------------- - ------------------------------------- ------------------------------- ---------------------------------- PORTFOLIO TOTALS (30 Properties) 21,906,628 2,315,154 10.57% 2,551,063 37,860 1.48% - ------------------------------------- ------------------------------- ----------------------------------
--------------------------------- ---------- TOTALS TOTAL % ON --------------------------------- 32,968,322 - ------------------------------------- TOTAL EQUITY CONCEPT LOCATION COST RECEIPTS RETURN RAISE - ------------------------------------- --------------------------------- ---------- POPEYE'S PARK FOREST, IL 580,938 77,280 13.30% SUNRISE PS PHOENIX, AZ 1,182,735 127,920 10.82% VILLAGE INN GRAND FORKS, ND 739,375 84,000 11.36% WENDY'S AIKEN, SC 633,750 90,480 14.28% WENDY'S CHARLESTON, SC 580,938 76,920 13.24% WENDY'S N. AUGUSTA, SC 660,156 87,780 13.30% WENDY'S AUGUSTA, GA 728,813 96,780 13.28% WENDY'S CHARLESTON, SC 596,781 76,920 12.89% WENDY'S AIKEN, SC 776,344 96,780 12.47% WENDY'S AUGUSTA, GA 649,594 86,160 13.26% WENDY'S CHARLESTON, SC 528,125 70,200 13.29% WENDY'S MT. PLEASANT, SC 580,938 77,280 13.30% WENDY'S MARTINEZ, GA 633,750 84,120 13.27% CASH-A-CHECK HALLANDALE, FL 792,188 30,000 3.79% - ------------------------------------- --------------------------------- ---------- 24,457,691 2,353,015 9.62% 7.14% - ------------------------------------- --------------------------------- ---------- PORTFOLIO TOTALS (30 Properties) - -------------------------------------
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 -----END PRIVACY-ENHANCED MESSAGE-----