SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended March 31, 1996 Commission file #0-16252
JMB MORTGAGE PARTNERS, LTD. - II
(Exact name of registrant as specified in its charter)
Illinois 36-3252916
(State of organization) (I.R.S. Employer Identification No.)
900 N. Michigan Ave., Chicago, Illinois 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312-915-1987
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . 9
PART II. OTHER INFORMATION
Item 5. Other Information. . . . . . . . . . . . . . . . . 10
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 11
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JMB MORTGAGE PARTNERS, LTD. - II
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
ASSETS
------
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . $ 1,356,804 1,391,904
Interest and other receivables. . . . . . . . . . . . . . . . . . . . 5,706 6,421
----------- -----------
Total current assets. . . . . . . . . . . . . . . . . . . . . . 1,362,510 1,398,325
----------- -----------
Investment in unconsolidated venture, at equity . . . . . . . . . . . . 688,946 679,476
----------- -----------
$ 2,051,456 2,077,801
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
Current liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 32,515 11,144
----------- -----------
Total current liabilities.. . . . . . . . . . . . . . . . . . . 32,515 11,144
----------- -----------
Commitments and contingencies
Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings (loss). . . . . . . . . . . . . . . . . . . 1,869,162 1,873,934
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (1,932,819) (1,932,819)
----------- -----------
(62,657) (57,885)
----------- -----------
Limited partners (22,590.5 interests):
Capital contributions, net of offering costs. . . . . . . . . . . . 19,272,546 19,272,546
Cumulative net earnings (loss). . . . . . . . . . . . . . . . . . . 19,963,889 20,006,833
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (37,154,837) (37,154,837)
----------- -----------
2,081,598 2,124,542
----------- -----------
Total partners' capital accounts. . . . . . . . . . . . . . . 2,018,941 2,066,657
----------- -----------
$ 2,051,456 2,077,801
=========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
JMB MORTGAGE PARTNERS, LTD. - II
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
<CAPTION>
1996 1995
--------- --------
<S> <C> <C>
Income:
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,845 221,116
-------- --------
Expenses:
Mortgage investment servicing fees. . . . . . . . . . . . . . . . . . -- 5,285
Professional services . . . . . . . . . . . . . . . . . . . . . . . . 18,000 19,300
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . -- 3,737
General and administrative. . . . . . . . . . . . . . . . . . . . . . 63,031 22,876
-------- --------
81,031 51,198
-------- --------
Operating earnings (loss) . . . . . . . . . . . . . . . . . . (57,186) 169,918
Partnership's share of operations of unconsolidated venture . . . . . . 9,470 13,238
-------- --------
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . $(47,716) 183,156
======== ========
Net earnings (loss) per limited partnership interest. . . . . $ (1.90) 7.66
======== ========
Cash distributions per limited partnership interest . . . . . $ -- 4.00
======== ========
<FN>
See accompanying notes to financial statements.
</TABLE>
<TABLE>
JMB MORTGAGE PARTNERS, LTD. - II
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
<CAPTION>
1996 1995
---------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (47,716) 183,156
Items not requiring (providing) cash or cash equivalents:
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . -- 3,737
Partnership's share of operations of unconsolidated venture,
net of distributions. . . . . . . . . . . . . . . . . . . . . . . . . (9,470) (13,238)
Changes in:
Interest and other receivables. . . . . . . . . . . . . . . . . . . . . . 715 17,161
Amount due from affiliate . . . . . . . . . . . . . . . . . . . . . . . . -- 35,000
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,371 10,913
---------- ----------
Net cash provided by (used in) operating activities . . . . . . . (35,100) 236,729
---------- ----------
Cash flows from investing activities:
Net purchases of short-term investments . . . . . . . . . . . . . . . . . -- (896,229)
Collection of principal on promissory note received in connection
with mortgage loan prepayment . . . . . . . . . . . . . . . . . . . . . -- 963,454
Costs in connection with investment in unconsolidated venture . . . . . . -- (776)
---------- ----------
Net cash provided by (used in) investing activities . . . . . . . -- 66,449
---------- ----------
Cash flows from financing activities:
Distributions to limited partners . . . . . . . . . . . . . . . . . . . . -- (90,362)
Distributions to general partners . . . . . . . . . . . . . . . . . . . . -- (10,040)
---------- ----------
Net cash provided by (used in) financing activities . . . . . . . -- (100,402)
---------- ----------
Net increase (decrease) in cash and cash equivalents. . . . . . . (35,100) 202,776
Cash and cash equivalents, beginning of year. . . . . . . . . . . 1,391,904 1,069,818
---------- ----------
Cash and cash equivalents, end of period. . . . . . . . . . . . . $1,356,804 1,272,594
========== ==========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . . . . . . . . . . . $ -- --
========== ==========
Non-cash investing and financing activities:
Balance due on mortgage note receivable . . . . . . . . . . . . . . . . $ -- 702,100
Deferred interest receivable. . . . . . . . . . . . . . . . . . . . . . -- 85,044
Provision for loan loss . . . . . . . . . . . . . . . . . . . . . . . . -- (116,000)
Capitalized costs . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 776
---------- ----------
Initial investment in unconsolidated venture, at equity . . . . . $ -- 671,920
========== ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
JMB MORTGAGE PARTNERS, LTD. - II
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996 AND 1995
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1995
which are included in the Partnership's 1995 Annual Report, as certain
footnote disclosures which would substantially duplicate those contained in
such audited financial statements have been omitted from this report.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of 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 these
estimates.
Statement of Financial Accounting Standards No. 121 was adopted by the
Partnership on January 1, 1996.
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees, certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments. Such costs recognized by the
Partnership for the three months ended March 31, 1996 and 1995 aggregated
$23,764 and $15,435, respectively, of which $19,575 was unpaid at March 31,
1996.
Payment of approximately $308,000 of distributions from Partnership
operations to the General Partners has been deferred in accordance with the
Partnership Agreement. All amounts deferred or currently payable to the
General Partners or their affiliates do not bear interest.
SPRING HILL FASHION CENTER, WEST DUNDEE, ILLINOIS
Occupancy of the shopping center was 67% at March 31, 1996, down from
75% at December 31, 1995. A major tenant, which occupied approximately 24%
of the leasable space at the property and which was operating under Chapter
11 bankruptcy protection, did not exercise its renewal option when its
lease expired in October 1995 and vacated its space. The Spring Hill
venture, however, executed a ten-year lease (in February 1996) with a
replacement tenant for this space at rental rates lower than those of the
former tenant, resulting in the property currently being 94% leased. The
Spring Hill joint venture is conserving its working capital in order to
fund certain costs associated with this replacement tenant's expected
occupancy in the summer of 1996. Although, the Spring Hill venture is
actively pursuing the sale of this property, there can be no assurance that
any satisfactory sale transaction will be completed by the end of 1996.
UNCONSOLIDATED VENTURE - SUMMARY INFORMATION
Summary income statement information for JMB/Spring Hill Associates
for the three months ended March 31, 1996 and 1995 is as follows:
1996 1995
-------- --------
Total income . . . . . . . . . . $314,013 329,697
======== ========
Operating earnings . . . . . . . $135,298 189,118
======== ========
Partnership's share
of earnings. . . . . . . . . . $ 9,470 13,238
======== ========
ADJUSTMENTS
In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of March 31,
1996 and for the three months ended March 31, 1996 and 1995.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying financial
statements for additional information concerning the Partnership's
investment.
After reviewing the remaining property and its competitive
marketplace, the General Partners of the Partnership expect to be able to
liquidate as quickly as practicable. Therefore, the affairs of the
Partnership are expected to be wound up as soon as it is feasibly possible,
barring unforeseen economic developments.
RESULTS OF OPERATIONS
Interest income decreased for the three months ended March 31, 1996 as
compared to the three months ended March 31, 1995 primarily as a result of
the April 1995 prepayment of the loan secured by the Plaza at Shelter Cove
shopping center. An additional decrease in interest income is attributable
to the March 1995 repayment of amounts due relating to the loan secured by
the Valley Lo Towers Apartments.
The increase in general and administrative expenses for the three
months ended March 31, 1996 as compared to the three months ended March 31,
1995 is attributable primarily to the timing of the recognition of costs
for certain outsourcing services, the recognition of certain prior year
reimbursable costs to affiliates of the General Partners and the timing of
the recognition of certain printing costs in 1996.
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate occupancy levels by quarter for the Partnership's owned or
reflected as owned investment property.
<CAPTION>
1995 1996
------------------------------------- ------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Spring Hill
Fashion Center
Shopping Center
West Dundee, Illinois . . . 94%* 94% 92% 75% 67%
<FN>
- --------------------
* This property was reflected as owned at March 31, 1995 although title did not transfer to the Partnership
and its affiliated lenders pursuant to a deed in lieu of foreclosure until May 1995.
</TABLE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10-A. Agreement for Deed in Lieu of Foreclosure and
related agreements dated as of April 4, 1995 between borrower and lenders
relating to Spring Hill Fashion Center are incorporated herein by reference
to the Partnership's Report for December 31, 1995 on Form 10-K (File No. 0-
16252) dated March 25, 1996.
10-B. Agreement of General Partnership of JMB/Spring Hill
Associates dated May 1, 1995 between JMB Mortgage Partners, Ltd., JMB
Mortgage Partners, Ltd.-II and JMB Mortgage Partners, Ltd.-III is
incorporated herein by reference to the Partnership's Report for December
31, 1995 on From 10-K (File No. 0-16252) dated March 25, 1996.
27. Financial Data Schedule.
(b) No reports on Form 8-K were required or have been filed for
the quarter covered by this report.
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.
JMB MORTGAGE PARTNERS, LTD. - II
BY: JMB Realty Corporation
(Corporate General Partner)
GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Date: May 10, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
GAILEN J. HULL
Gailen J. Hull
Principal Accounting Officer
Date: May 10, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<CIK> 0000730206
<NAME> JMB MORTGAGE PARTNERS, LTD. - II
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,356,804
<SECURITIES> 0
<RECEIVABLES> 5,706
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,362,510
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,051,456
<CURRENT-LIABILITIES> 32,515
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,018,941
<TOTAL-LIABILITY-AND-EQUITY> 2,051,456
<SALES> 0
<TOTAL-REVENUES> 23,845
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 81,031
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (57,186)
<INCOME-TAX> 0
<INCOME-CONTINUING> (47,716)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (47,716)
<EPS-PRIMARY> (1.90)
<EPS-DILUTED> (1.90)
</TABLE>
