SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended June 30, 2000 Commission file number 2-90654
AMRECORP REALTY FUND II
(Exact name of registrant as specified in its charter)
TEXAS 75-1956009
(State or other jurisdiction of (IRS Employer
incorporation or organization Identification
Number)
6210 Campbell Road Suite 140
Dallas, Texas 75248
(Address of principal executive offices)
Registrant's telephone number, including area code: (972)380-8000.
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: Y No:
REGISTRANT IS A LIMITED PARTNERSHIP
TABLE OF CONTENTS
Item 1. Financial Statements
The following Unaudited financial statements are filed
herewith:
Consolidated Balance Sheet as of June 30, 2000 and
December 31, 1999 Page 3
Consolidated Statements of Operations for the Three months
and Six Months Ended June 30, 2000 and 1999
Page 4
Consolidated Statements of Cash Flows for the Three months
Ended June 30, 2000 and 1999
Page 5
Item 2. Results of Operations and Management's Discussion and Analysis of
Financial Condition
Page 6
Liquidity and Capital Resources
Page 7
Other Information Page 8
Signatures Page 9
The statements, insofar as they relate to the period subsequent to
December 31, 1999 are Unaudited.
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
AMRECORP REALTY FUND II
Condensed Consolidated Balance Sheets
June 30, December 31,
2000 1999
(Unaudited)
ASSETS
Real Estate assets, at cost $580,045 $580,045
Land 4,617,978 4,617,978
Buildings and improvements 5,198,023 5,198,023
Less: Accumulated depreciation (3,023,170) (2,923,170)
Real estate, net 2,174,853 2,274,853
Investments in Real Estate
Held for Sale
Cash including cash investments 120,143 378,479
Escrow deposits 168,483 205,850
Deferred Costs and Fees 46,617 35,352
Other assets 1,150 6,681
Total assets $2,511,246 $2,901,215
LIABILITIES AND PARTNERS'
EQUITY:
LIABILITIES:
Mortgage and notes payable $2,302,678 $2,325,774
Payable to Affiliates 1,114 977
Interest payable 0 18,161
Real estate taxes payable 47,502 0
Security deposits 18,001 18,901
Accounts payable and accrued 73,509 130,174
expenses
Total liabilities 2,442,804 2,493,987
PARTNERS CAPITAL (DEFICIT):
Limited Partners 157,369 496,403
General Partners (88,927) (89,175)
Total Partners Capital 68,442 407,228
(Deficit)
Total $2,511,246 $2,901,215
Liability and Partners Equity
See notes to Condensed Consolidated Financial Statements
AMRECORP REALTY FUND II
Condensed Consolidated Statement of Operations
(Unaudited)
Three Months Six Months Ended
Ended June 30, June 30,
REVENUES 2000 1999 2000 1999
Rental income $211,721 $197,413 $413,035 $394,921
Other property 13,183 7,823 20,241 13,379
Total revenues 224,904 205,236 433,276 408,300
EXPENSES
Salaries & wages 16,568 18,170 35,682 30,910
Maintenance & repairs 17,514 12,660 30,608 27,779
Utilities 6,541 6,563 13,535 13,443
Real estate taxes 23,751 20,250 47,502 40,500
General administrative 14,062 10,623 20,872 32,939
Contract services 9,794 9,732 19,667 20,336
Insurance 4,070 3,609 7,840 7,250
Interest 54,024 54,805 108,168 109,820
Depreciation and 50,000 48,000 100,000 96,000
amortization
Property management fees 10,910 10,073 21,167 20,164
Amortization of 1,710 1,710 3,421 3,421
deferred costs and fees
Total expenses 208,944 196,195 408,462 402,562
NET INCOME (LOSS) $15,960 $9,041 $24,814 $5,738
NET INCOME PER SHARE $1.10 $0.62 $1.71 $0.39
See Notes to Condensed Consolidated Financial Statements
AMRECORP REALTY FUND II
Condensed Consolidated Statement of Cash Flows
Unaudited
Three Months Ended
June 30,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITY
Net income (loss) $24,814 $5,738
Adjustments to reconcile net income (loss)
to net cashprovided by operating activities:
Depreciation and amortization 100,000 96,000
Net Effect of changes in operating accounts
Escrow deposits 37,367 29,310
Deferred Costs (11,265) (7,890)
Accrued real estate taxes 47,502 40,470
Security deposits (900) 1,221
Accounts payable (56,665) (51,566)
Other assets 5,531 5,402
Net cash used by operating activities 146,384 118,685
CASH FLOWS FROM INVESTING ACTIVITIES 0 0
Net cash used by operating activities 0 0
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of mortgage notes payable (23,096) (21,061)
Distribution to Limited Partners (363,600) 0
Proceeds from amounts due affiliates 137 (1,284)
Increase in accrued interest (18,161) (18,384)
Net cash provided by investing (404,720) (40,729)
activities
NET INCREASE (DECREASE) IN CASH AND CASH (258,336) 77,956
EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF 378,479 217,493
PERIOD
CASH AND CASH EQUIVALENT, END OF PERIOD $120,143 $295,449
See Notes to Condensed Consolidated Financial Statements
Basis of Presentation:
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the
Partnership believes that the disclosures are adequate to make
the information presented not misleading. It is suggested that
these condensed financial statements be read in conjunction
with the financial statements and notes thereto included in the
Partnership's latest annual report on Form 10-K.
Item 2. RESULTS OF OPERATIONS AND MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
Results of Operations
At June 30, 2000 the Partnership owned one property, Chimney
Square Apartments located in Abilene Texas with approximately
126,554 net rentable square feet.
The occupancy of Chimney Square averaged 96.9% during the
second quarter of 2000 as compared to 96.0% for the second
quarter of 1999.
SECOND QUARTER 2000 COMPARED TO SECOND QUARTER 1999
Revenue from property operations increased $19,668 or 7.25%,
for the second quarter of 2000, as compared to the 1999 second
quarter. The increase in rental income of $14,308 or 7.25% is
primarily due to increased occupancy and higher rental rates.
Other income increased $5,360 or 68.52% primarily due to
increased late charges and other fees. The following table
illustrates the components:
Increase Percent
(Decrease) Change
Rental income $14,308 7.25%
Other property 5,360 68.52%
$19,668 9.58%
Property operating expenses increased $12,749 or 6.50%, for the
second quarter of 2000, as compared to the same period in 1999.
This was primarily due from increased maintenance and repairs.
Maintenance & repairs increased $4,854 or 38.34% higher
turnover of residents. General and administrative costs
increased $3,439 or 32.37% from increases in postage related
mailings. Real estate taxes increased $3,50 or 17.9% primarily
due to increased assessments on the property. Insurance
increased $461 or 12.77% with the annual policy renewal. The
following table illustrates the components by category:
Increase Percent
(Decrease) Change
Salaries & wages ($1,602) 8.82%
Maintenance & repairs 4,854 38.34%
Utilities (22) 0.34%
Real estate taxes 3,501 17.29%
General administrative 3,439 32.37%
Contract services 62 0.64%
Insurance 461 12.77%
Interest (781) 1.43%
Depreciation and 2,000 4.17%
amortization
Property management fees 837 8.31%
Net Increase $12,749 6.50%
FIRST SIX MONTHS 2000 COMPARED TO FIRST SIX MONTHS 1999
Revenue from property operations increased $24,976 or 6.12%,
for the first six months of 2000, as compared to the 1999 first
six months. The increase in rental income of $18,114 or 4.59%
is primarily due to increased occupancy and higher rental
rates. Other income increased $6,862 or 51.29% primarily due
to increased late charges and other fees. The following table
illustrates the components:
Increase Percent
(Decrease) Change
Rental income $18,114 4.59%
Other property 6,862 51.29%
$24,976 6.12%
Property operating expenses increased $5,900 or 1.47%, for the
first six months quarter of 2000, as compared to the same
period in 1999. This was primarily due from decreased general
and administrative costs which dropped $12,067 or 36.63% from
decreases in postage related mailings. Salaries & wages
increased $4,772 or 15.44% due to increased staff levels. Real
estate taxes increased $7,002 or 17.29% due to higher property
value assessments. Maintenance and repairs increased $2,829 or
10.18% from higher turnover of residents. The following table
illustrates the components by category:
Increase Percent
(Decrease) Change
Salaries & wages $4,772 15.44%
Maintenance & repairs 2,829 10.18%
Utilities 92 0.68%
Real estate taxes 7,002 17.29%
General (12,067) 36.63%
administrative
Contract services (669) 3.29%
Insurance 590 8.14%
Interest (1,652) 1.50%
Depreciation and amortization 4,000 4.17%
Property management fees 1,003 4.97%
Net Increase (Decrease) $5,900 1.47%
LIQUIDITY AND CAPITAL RESOURCES
While it is the General Partners primary intention to operate
and manage the existing real estate investments, the General
Partner also continually evaluates this investment in light of
current economic conditions and trends to determine if these
assets should be considered for disposal. Accordingly, in 1996
the Partnership sold its investment in the shopping center
located in Lancaster, Texas, recognizing a loss of $10,177.
Shorewood Apartments, an apartment complex located in
Charlotte, North Carolina was sold in January 1997. Net
proceeds from the sale was 1.3 million dollars resulting in
cash distribution of $100.00 per unit.
As of June 30, 2000, the Partnership had $120,143 in cash and
cash equivalents as compared to $378,479 as of December 31
1999. The net decrease in cash of $258,336 is principally due
to partnership distributions.
The property is encumbered by non-recourse mortgage as of June
30, 2000, with an interest rate of 9.325%. Required principal
payments on this mortgage note for the three years ended
December 31, 2002, are $40,717, $44,680, and $49,029
respectively.
For the foreseeable future, the Partnership anticipates that
mortgage principal payments (excluding balloon mortgage
payments), improvements and capital expenditures will be funded
by net cash from operations. The primary source of capital to
fund future Partnership acquisitions and balloon mortgage
payments will be proceeds from the sale, financing or
refinancing of the properties.
On February 7, 1995 the Partnership refinanced the loan on
Chimney Square Apartments. The original loan matured and a new
$2,475,000 loan bearing interest at 9.325% per year was secured
from Newport Mortgage Company L.P. The loan matures on March 1,
2005. In connection with this loan, the lender required, and
the Partnership provided, a new single asset partnership known
as Chimney Square Apartments, owned 99% by the Fund.
In February, 1991, Amrecorp Realty Inc., resigned as the
Managing General Partner of the Partnership. As was
communicated to all limited partners, this step was taken in
order to minimize any effect that Amrecorp's financial
difficulties might have on the partnership. Management of the
Partnership's assets is performed by Univesco, Inc., a Texas
corporation, Robert J. Werra, CEO.
Management intends to continue operating the Partnership in its
present form while investigating options to improve operations
of the Partnership.
Part II
Other Information
Item 1. Legal Proceedings
See Part I Item 2. Management's Discussion
and Analysis of Financial Conditions and
Results of Operations.
Item 2. Changes in Securities.
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matter to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
None
(A) The following documents are filed herewith
or incorporated herein by reference as
indicated as Exhibits:
Exhibit Designation Document Description
Limited Partnership Agreement
incorporated by reference to
Registration Statement No. 2-90654
effective July 6, 1984.
Limited Partnership Agreement
incorporated by reference to
Registration Statement No. 2-90654
effective July 6, 1984.
11 Not Applicable
15 Not Applicable
18 Not Applicable
19 Not Applicable
20 Not Applicable
23 Not Applicable
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.
AMRECORP REALTY FUND II
a Texas limited partnership
By: /s/ Robert J. Werra
Robert J. Werra,
General Partner
Date: August 1, 2000
[ARTICLE] 5
[LEGEND]
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BOTH
THE JUNE 30, 2000 BALANCE SHEET AND STATEMENT OF INCOME AND EXPENSES
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
[/LEGEND]
[CIK] 0000745061
[NAME] AMRECORP REALTY FUND II
<TABLE>
<S> <C>
[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] DEC-31-2000
[PERIOD-END] JUN-30-2000
[CASH] 120,143
[SECURITIES] 0
[RECEIVABLES] 0
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 0
[PP&E] 5,198,023
[DEPRECIATION] 3,023,170
[TOTAL-ASSETS] 2,511,246
[CURRENT-LIABILITIES] 0
[BONDS] 2,302,678
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 0
[OTHER-SE] 68,442
[TOTAL-LIABILITY-AND-EQUITY] 2,511,246
[SALES] 0
[TOTAL-REVENUES] 224,904
[CGS] 0
[TOTAL-COSTS] 0
[OTHER-EXPENSES] 154,920
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 54,024
[INCOME-PRETAX] 0
[INCOME-TAX] 0
[INCOME-CONTINUING] 0
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 15,960
[EPS-BASIC] 1.10
[EPS-DILUTED] 0
</TABLE>
