SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-14360
NOONEY INCOME FUND LTD. II, L.P.
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(Exact name of Registrant as specified in its charter)
Missouri
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(State or other jurisdiction of incorporation or organization)
43-1357693
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(I.R.S. Employer Identification No.)
7701 Forsyth Boulevard, St. Louis, Missouri 63105
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 863-7700
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Former name, former address and former fiscal year,
if changed since last report.
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 [ ].
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12,13, or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable
date __________.
Page 1 of 13 Pages
<PAGE>
PART I
ITEM 1 - FINANCIAL STATEMENTS:
<TABLE>
NOONEY INCOME FUND LTD. II, L.P.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
<CAPTION>
June 30, December 31,
1996 1995
(Unaudited)
--------------- ---------------
<S> <C> <C>
ASSETS:
Cash .......................................................................... $ 1,383,543 $ 1,092,159
Accounts receivable ........................................................... 200,718 320,515
Investment property, at cost:
Land (and improvements) ..................................................... 2,618,857 2,618,857
Buildings and improvements .................................................. 13,452,340 13,341,502
--------------- ---------------
16,071,197 15,960,359
Less accumulated depreciation ............................................... 3,521,194 3,225,159
--------------- ---------------
12,550,003 12,735,200
Investment property held for sale ............................................. 2,460,000 2,431,537
--------------- ---------------
Total investment property ................................................... 15,010,003 15,166,737
Deferred expenses - At amortized cost ......................................... 152,083 224,155
--------------- ---------------
$ 16,746,347 $ 16,803,566
=============== ===============
LIABILITIES AND PARTNERS' EQUITY:
Liabilities:
Accounts payable and accrued expenses ......................................... $ 286,795 $ 251,779
Accrued real estate taxes ..................................................... 557,210 606,111
Refundable tenant deposits .................................................... 125,434 112,034
Mortgage notes payable ........................................................ 7,190,000 7,190,000
--------------- ---------------
Total Liabilities ............................................................. 8,159,439 8,159,924
Partners' Equity ........................................................................... 8,586,908 8,643,642
--------------- ---------------
$ 16,746,347 $ 16,803,566
=============== ===============
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
-2-
<PAGE>
<TABLE>
NOONEY INCOME FUND LTD. II, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
<CAPTION>
Three Months Ended Six Months Ended
--------------------------- ---------------------------
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES:
Rental and other income ...................... $ 876,834 $ 433,570 $ 1,650,927 $ 883,701
Interest ..................................... 1,382 7,588 6,425 17,086
------------ ------------ ------------ ------------
878,216 441,158 1,657,352 900,787
EXPENSES:
Interest Expense ............................. 153,918 312,029
Depreciation and amortization ................ 152,470 105,145 316,642 217,933
Real estate taxes ............................ 167,490 69,746 337,377 158,994
Property management fees paid to
Nooney Krombach Company ..................... 60,161 26,720 106,514 54,309
Reimbursement to Nooney Krombach
Company for partnership management
services and indirect expenses .............. 6,250 6,250 12,500 12,500
Other operating expenses ..................... 299,587 184,551 629,024 363,473
------------ ------------ ------------ ------------
839,876 392,412 1,714,0876 807,209
------------ ------------ ------------ ------------
NET INCOME (LOSS) ......................................... $ 38,340 $ 48,746 $ (56,734) $ 93,578
============ ============ ============ ============
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT ......................................... $ 1.97 $ 2,51 $ (2.92) $ 4.37
============ ============ ============ ============
PARTNERS' EQUITY:
Beginning of Period .......................... $ 8,548,568 $ 8,733,918 $ 8,643,642 $ 8,689,086
Net Income ................................... 38,340 48,746 (56,734) 93,578
Cash Distribution to Partners ................ 0 (127,477) 0 (127,477)
------------ ------------ ------------ ------------
End of Period ................................ $ 8,586,908 $ 8,655,187 $ 8,586,908 $ 8,655,187
============ ============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
-3-
<PAGE>
<TABLE>
NOONEY INCOME FUND LTD. II, L.P.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Ended Six Months Ended
-------------------------- --------------------------
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) ......................................... $ 38,340 $ 48,746 $ (56,734) $ 93,578
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization ........................... 152,470 105,145 316,642 217,933
Real estate tax deposits received ......................... 0 337,685
Changes in assets and liabilities:
(Increase) Decrease in accounts
receivable .......................................... (1,361) (51,534) 119,797 (32,558)
Increase in prepaid expenses and deposits ............. (1,792) (30,868) (127,056) (92,508)
Increase in deferred assets .......................... (28,755) (987) (28,755) (27,567)
Increase (Decrease) in accounts payable and
accrued expenses ................................... 265,927 44,896 (13,885) (11,482)
Increase (Decrease) in refundable tenant
deposits ........................................... 7,535 (1,005) 13,400 (1,299)
----------- ----------- ----------- -----------
Total Adjustments ................................... 394,024 65,647 617,828 52,519
----------- ----------- ----------- -----------
Net cash from operating activities .................. 432,364 114,393 561,094 146,097
----------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to investment property .......................... (233,046) (44,903) (269,710) (51,887)
----------- ----------- ----------- -----------
Net cash used in investing
activities ....................................... (233,046) (44,903) (269,710) (51,887)
----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners ............................ 0 (127,477) 0 (127,477)
----------- ----------- ----------- -----------
Net cash used in financing activities .................. 0 (127,477) 0 (127,477)
----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH ........................................ 199,318 (57,987) 291,384 (33,267)
CASH, beginning of period .............................................. 1,184,225 1,142,753 1,092,159 1,118,033
----------- ----------- ----------- -----------
CASH, end of period .................................................... $ 1,383,543 $ 1,084,766 $ 1,383,543 $ 1,084,766
=========== =========== =========== ===========
CASH PAID FOR INTEREST ................................................. $ 153,918 $ 0 $ 312,029 $ 0
=========== =========== =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
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<PAGE>
NOONEY INCOME FUND LTD.II, L.P.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
NOTE A:
Refer to the Registrant's financial statements for the year ended December 31,
1995, which are contained in the Registrant's Annual Report on Form 10-K, for a
description of the accounting policies which have been continued without change.
Also, refer to the footnotes to those statements for additional details of the
Registrant's financial condition. The details in those notes have not changed
except as a result of normal transactions in the interim or as noted below.
NOTE B:
The financial statements include only those assets, liabilities, and results of
operations of the partners which relate to the business of Nooney Income Fund
Ltd. II, L.P. The statements do not include assets, liabilities, revenues or
expenses attributable to the partners' individual activities. No provision has
been made for federal and state income taxes since these taxes are the
responsibility of the individual partners. In the opinion of the general
partners, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of operations and
changes in financial position at June 30, 1996 and for all periods presented
have been made.
NOTE C:
The Registrant's properties are managed by Nooney Krombach Company, a
wholly-owned subsidiary of Nooney Company. Certain general partners of the
Registrant are officers and directors of Nooney Company. Nooney Income
Investments Two, Inc., a general partner, is a 75% owned subsidiary of Nooney
Company.
NOTE D:
The earnings per limited partnership unit for the three and six months ended
June 30, 1996 and 1995 was computed based on 19,221 units, the number of units
outstanding during the periods.
-5-
<PAGE>
ITEM 7: MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
Cash on hand as of June 30, 1996 is $1,383,543 an increase of $291,384 when
compared to year end December 31, 1995. The increase in cash can be attributed
to the Registrant receiving the balances in certain cash reserve accounts at the
time of the purchase of the undivided interest in NorthCreek Office Park,
Countryside Executive Center and Northeast Commerce Center. Based on the current
cash balances and the properties ability to provide operating cash flow, the
Registrant expects the properties to fund anticipated capital expenditures for
the remainder of 1996. The anticipated capital expenditures by property are as
follows:
Other Leasing
Capital Capital Total
-------- -------- --------
NorthCreek Office Park .................. $ 42,500 $ 13,200 $ 55,700
Tower Industrial Building ............... $ 0 $ 0 $ 0
Northeast Commerce Center ............... $ 0 $ 16,000 $ 16,000
Countryside Executive Center ............ $ 45,800 $ 50,300 $ 96,100
Leawood Fountain Plaza (24%) ............ $ 14,100 $ 23,700 $ 37,800
-------- -------- --------
$102,400 $103,200 $205,600
======== ======== ========
During the remainder of 1996, approximately $205,600 of capital expenditures are
expected. Leasing capital at the four properties includes funds for tenant
alterations and lease commissions for new and renewal leases. Other capital
expenditures at NorthCreek Office Park includes roof repairs along with some ADA
compliance work. The Registrant has forecasted for Countryside Executive Center
parking lot repairs and resurfacing. Other capital expenditures at Leawood
Fountain Plaza include expenditures to the property to meet ADA requirements,
repair of minor structural problems, painting the building exteriors, wood and
stucco and repair of some of the property's sidewalks and curbing.
In conjunction with the December 31, 1995 purchase of an undivided interest in
NorthCreek Office Park, Countryside Executive Center and Northeast Commerce
Center not previously owned by the Registrant, a loan in the amount of
$7,190,000 was obtained to fund the purchase price. The loan is secured by the
properties purchased in the transaction. The first mortgage loan has a floating
interest rate of 3/4% above the then published prime rate of the lender and a
maturity date of December 31, 2002. Payments have been structured whereby only
interest is paid during 1996 with principal payments commencing January 1, 1997.
As previously disclosed, the General Partners feel that the market conditions
exist whereby Countryside Executive Center should be sold. During the first
quarter of 1996 the Registrant has begun to market the property. The Registrant
feels to achieve a maximum return from the sale of the property additional
leasing should occur prior to a sale.
-6-
<PAGE>
The future liquidity of the Registrant is dependent on its ability to fund
future capital expenditures from operations and cash reserves and maintain
occupancy. Until such time as the real estate market recovers and profitable
sale of the properties is feasible, the Registrant will continue to manage the
properties to achieve its investment objectives.
Results of Operations by Property
The results of operations for the Registrant's properties for the quarters ended
June 30, 1996 and 1995 are detailed in the schedule below. The operating results
for NorthCreek Office Park, Northeast Commerce Center and Countryside Executive
Center are reflective of 100% ownership for the quarter ended June 30, 1996
while the operating results for the quarter ended June 30, 1995 reflect the
following ownership: NorthCreek Office Park (45%), Northeast Commerce Center
(45%), Countryside Executive Center (50%). The ownership percentages for Tower
Industrial Building and Leawood Fountain Plaza remained constant for both
periods. Revenues and expenses of the Registrant are excluded.
Tower Northeast Countryside Leawood
NorthCreek Industrial Commerce Executive Fountain
Office Park Building Center Center Plaza (24%)
----------- ---------- ---------- ---------- -------------
1996
- ---------------------
Revenues ............ $ 330,620 $ 47,007 $ 124,961 $ 305,661 $ 69,720
Expenses ............ 291,868 25,169 157,772 282,303 69,442
--------- --------- --------- --------- ---------
Net Income (Loss) ... $ 38,752 $ 21,838 $ (32,811) $ 23,358 $ 278
========= ========= ========= ========= =========
1995
- ---------------------
Revenues ............ $ 146,000 $ 45,732 $ 47,865 $ 137,423 $ 64,939
Expenses ............ 99,568 22,931 53,925 149,702 70,794
--------- --------- --------- --------- ---------
Net Income (Loss) ... $ 46,432 $ 22,801 $ (6,060) $ (12,279) $ (5,855)
========= ========= ========= ========= =========
Operating results for NorthCreek Office Park, Northeast Commerce Center and
Countryside Executive vary significantly when comparing the quarter ended
results from June 30, 1996 to 1995. To analyze these three properties, the
Registrant will reflect operating results as if the properties were 100% owned
by the Registrant at June 30, 1996 and 1995.
NorthCreek Office Park revenues for the quarter ended June 30, 1996 and 1995 are
$330,620 and $324,445, respectively. The increase in revenues relates to rental
income. As tenants renew their leases the Registrant has been able to increase
their rental rates over the past year. Operating expenses for the quarter ended
June 30, 1996 and 1995 are $291,868 and $221,263, respectively. The increase in
expenses relates to an increase in interest expense and repairs and maintenance
offset by
-7-
<PAGE>
a decrease in depreciation expense. Interest expense increased $84,655 due to
the first mortgage debt the Registrant assumed through the purchase of the
undivided interest in NorthCreek Office Park (55%). Repair and maintenance
expenses increased $5,358 due to miscellaneous repairs needed to various tenants
HVAC units. The decrease in depreciation expense can also be attributed to the
purchase. Prior to the sale, the assets purchased were depreciated over a term
of 30 years. Upon the purchase, the assets were revalued based on the purchase
price and depreciated over 39 1/2 years.
At Tower Industrial Building the operating results for the quarter ended June
30, 1996 and 1995 remained relatively stable.
For the quarter ended June 30, 1996 and 1995 revenues at Northeast Commerce
Center were $124,961 and $106,367, respectively. The increase in revenues can be
attributed to an increase in rental income resulting from an increase in
occupancy during the second quarter of 1996. The properties expenses for the
quarter ended June 30, 1996 and 1995 are $157,772 and $119,834. The increase in
expenses relate to an increase in interest expense, amortization expense and
repairs and maintenance offset by a decrease in depreciation expense. Interest
expense increased $43,097 due to the first mortgage debt the Registrant assumed
through the purchase of the undivided interest in Northeast Commerce Center
(55%). Amortization expenses increased due to increased capital expenditures for
tenant finish and commissions over the past year. Repairs and maintenance
expense increased $7,396 due to general maintenance to the property. The
decrease in depreciation expense also relates to the purchase. Prior to the
sale, the assets purchased were depreciated over a term of 30 years. Upon the
purchase, the assets were revalued based on the purchase price and are
depreciated over 39 1/2 years.
At Countryside Executive Center revenues for the quarter ended June 30, 1996 and
1995 are $305,661 and $274,847, respectively. The increase in revenues of
$30,814 can be attributed to the receipt of a real estate tax refund offset by a
decrease in rental income. The decrease in rental income can be attributed to
the occupancy of the property. Operating expenses for the quarter ended June 30,
1996 and 1995 are $282,303 and $299,405, respectively. The decrease in operating
expenses is caused by a decrease in depreciation expense offset by an increase
in interest expense, vacancy expense and adverting expenses. The decrease in
depreciation expense of $76,903 can be attributed to the reclassification of the
property to property held for sale. With the reclassification of the property
effective January 1, 1996, under generally accepted accounting principals, the
asset can no longer be depreciated. Interest expense increased $26,166 due to
the first mortgage debt the Registrant assumed through the purchase of the
undivided interest in Countryside Executive Center (50%). Vacancy expenses and
advertising expenses can be attributed to the increased leasing activity the
property has undertaken over the past two quarters in an effort to lease-up the
vacant space.
At Leawood Fountain Plaza revenues for the quarter ended June 30, 1996 increased
$4,781 when compared to the same period ended June 30, 1995. The increase in
revenues can be attributed to an overall increase in average occupancy for the
quarter along with an increase in rental rates obtained by the Registrant on
lease renewals and new leases. Expenses for the quarter ended June 30, 1996 and
1995 remained relatively stable.
-8-
<PAGE>
The changes in occupancy levels at the Registrant properties were mixed during
the second quarter of 1996. An analysis of each properties' particular change in
occupancy will be further analyzed later in this document. The occupancy levels
at June 30 are as follows:
Occupancy Levels at June 30,
PROPERTY 1996 1995 1994
- -------------------------------------------------- ------- ------- -------
NorthCreek Office Park ........................... 99% 93% 91%
Tower Industrial Building ........................ 100% 100% 100%
Northeast Commerce Center ........................ 87% 56% 95%
Countryside Executive Center ..................... 72% 81% 89%
Leawood Fountain Plaza (24%) ..................... 93% 93% 91%
Leasing activity during the second quarter of 1996 at NorthCreek Office Park
resulted in the renewal of one tenant totaling 2,440 square feet and the
vacating of one tenant who occupied 869 square feet. The Registrant signed two
new leases totaling 3,100 square feet.The office park has one major tenant, with
two leases that comprise 36% of the available space. These two leases expire in
December 1998 and December 2003, respectively.
Tower Industrial Building is leased to a single tenant whose lease expires on
April 30, 2000.
At Northeast Commerce Center, the Registrant signed three new leases totaling
26,460 square feet. Two of the three leases are for five year periods while the
third lease has a three year term.The property has one major tenant that
occupies 50% of the available space. Their lease expires December 1998.
At Countryside Executive Center, the Registrant renewed three leases totaling
1,701 square feet and two tenants vacated 1,566 square feet. Three new leases
were signed with a total combined square feet of 3,355. The property has no
major tenants who occupy more that 10% of the available space.
During the second quarter of 1996 leasing activity at Leawood Fountain Plaza
netted an increase in occupancy of 2%. The Registrant executed two new leases
totaling 1,537 square feet and renewed two leases totaling 2,926 square feet.
The property has one major tenant that lease approximately 10% of the available
space and their lease expires in July 1999.
Results of Consolidated Operations 1996
For the quarter ended June 30, 1996 consolidated revenues are $878,216 compared
to $441,158 for the quarter ended June 30, 1995. For the six month period ended
June 30, 1996 and 1995 consolidated revenues are $1,657,352 and $900,787,
respectively. The significant increase in consolidated revenues is a direct
result of the purchase of the undivided interest in NorthCreek Office Park
(55%), Countryside Executive Center (50%) and Northeast Commerce Center (55%).
When comparing operating results for the quarter ended June 30, 1996 to 1995 as
if the purchase of the additional undivided interest in the properties occurred
December 31, 1994, consolidated revenues are $878,216 and $816,164,
respectively. For the six month periods ended June 30, 1996 and 1995
consolidated revenues are $1,657,352 and $1,683,269, respectively.The increase
in revenues when comparing similar ownership percentages for the quarter ended
June 30, 1996 to 1995 can be
-9-
<PAGE>
attributed to Countryside Executive Center and a real estate tax refund
received during the second quarter. The decrease in revenues for the six month
period ended June 30, 1996 to 1995 of $25,917 relates to Countryside Executive
Center occupancy level. The average occupancy for the six month period ended
June 30, 1995 was 82% while for the six month period ended June 30, 1996 average
occupancy is 72%. The decrease in rental income at Countryside Executive Center
was offset by a receipt of the real estate tax refund. The operations of
Northeast Commerce Center positively contributed to the offset of lost rental
income at Countryside Executive Center. Revenues increased at Northeast Commerce
Center due to an increase in average occupancy. Average occupancy for the six
month period ended June 30, 1995 was 56% while for the six month period ended
June 30, 1996 average occupancy is 70%.
As of June 30, 1996 and 1995 consolidated expenses for the quarter ended are
$839,875 and $392,412. For the six month period ended June 30, 1996 and 1995
consolidated expenses are $1,714,087 and $807,209, respectively. The significant
increase in consolidated expenses is a direct result of the purchase of the
undivided interest in NorthCreek Office Park (55%), Countryside Executive Center
(50%) and Northeast Commerce Center (55%). When comparing operating results for
the quarter ended June 30, 1996 to 1995 as if the purchase of the additional
undivided interest in the properties occurred December 31, 1994, consolidated
expenses are $839,875 and $744,747, respectively. For the six month period ended
June 30, 1996 and 1995 consolidated expenses are $1,714,087 and $1,518,507,
respectively. The increase in expenses for the quarter ended and six month
period ended June 30, 1996 when compared to June 30, 1995 based on similar
ownership percentages can be attributed to an increase in interest expense and
professional fees offset by a decrease in depreciation expense. Interest expense
increased $153,918 due to the first mortgage debt the Registrant assumed through
the purchase of the undivided interest in NorthCreek Office Park (55%),
Countryside Executive Center (50%) and Northeast Commerce Center (55%). The
increase in professional fees relates to the costs associated with the Consent
Proxy. The decrease in depreciation expense can be attributed to Countryside
Executive Center and the reclassification of the property to property held for
sale. With the reclassification of the property effective January 1, 1996, under
generally accepted accounting principals, the asset can no longer be
depreciated.
Results of Consolidated Operations 1995
As of June 30, 1995, the Registrant consolidated revenues are $441,158 for the
quarter ended and $900,787 for the six month period ended. For the quarter ended
revenues decreased approximately 4.31% while for the six month period ended
revenues remained relatively stable increasing less than 1% when compared to the
same period ended June 30, 1994.
For the quarter ended June 30, 1995 rental revenues decreased approximately
4.85% or $22,060. The decrease in rental revenues relates to the loss of a major
tenant at Northeast Commerce Center effective September 30, 1994. Offsetting the
approximately $50,000 in lost quarterly revenues generated from this tenant were
increases in rental revenues at Leawood Fountain Plaza and NorthCreek Office
Park. However, for the six month period ended June 30, 1995 rental revenues
remained relatively stable. This occurrence is attributable to the receipt of a
termination fee received in the first quarter of 1995 from a tenant at
Countryside Executive Center. The termination fee offset the rental revenues
lost due to the tenant that vacated Northeast Commerce Center. Interest income
significantly increased when compared to the same six month period ended June
30, 1994. The increase is attributable to higher cash balances in the
Registrant's short term investment vehicles.
-10-
<PAGE>
As of June 30, 1995, the Registrant's consolidated expenses for the quarter
ended and six month period ended are $392,412 and $807,209, respectively. For
the same periods ended June 30, 1994 consolidated expenses were $385,034 and
$784,114, respectively. The expenses increased approximately 1.92% and 2.95% for
the quarter ended and six month period ended June 30, 1995, respectively, when
compared with the quarter ended and six month period ended June 30, 1994.
The increase in consolidated expenses relates to increases in other operating
expenses offset by decreases in real estate taxes and depreciation and
amortization. For the quarter ended and six month period ended June 30, 1995,
the other operating expenses are $184,551 and $363,473, respectively, compared
to $147,048 and $306,175 for the quarter ended and six month period ended June
30, 1994. The increases of $37,503 and $57,298 for the quarter ended and six
month period ended relates primarily to increased professional fees pertaining
to the consent proxy. In addition, at Leawood Fountain Plaza and Countryside
Executive Center increases in vacancy expenses, parking lot expenses and repairs
and maintenance added to the overall increase in other operating expenses. The
decrease in real estate taxes is comprised of decreases at both Countryside
Executive Center and Northeast Commerce Center. The changes in real estate taxes
are attributable to rate and/or property reassessmsents. Real estate taxes at
the three other properties remained relatively stable. Depreciation and
amortization decreases can be attributed to certain capital expenditures (lease
commissions and tenant alterations) at the Registrant's properties becoming
fully depreciated and/or amortized, offset by additonal capital expenditures at
Tower Industrial, Countryside Executive Center and Leawood Fountain Plaza.
Each quarter, the General Partners assses the properties for impairment. If
conclusive evidence of an impairment is found in any particular quarter, further
valuation procedures would be performed. Additionally, as a matter of policy,
the Registrant has each of its properties appraised on an annual basis by an
independent appraisal firm. It is difficult to pinpoint an exact time or event
to which impairment of a real estate investment can be attributed. Reductions in
value are usually recognized on an annual basis at the time appraisals are
completed.
Inflation
The effects of inflation did not have a material impact upon the Registrant's
operations in fiscal year 1995, and are not expected to materially affect the
Registrant's operations in 1996.
-11-
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
See Exhibit Index.
(b) Reports on Form 8-K
None
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.
NOONEY INCOME FUND LTD. II, L.P.
Dated: 8/14/96 By: /s/ Gregory J. Nooney, Jr.
-------------------------------------
Gregory J. Nooney, Jr.
General Partner
Nooney Income Investments Two, Inc.
By: /s/ Gregory J. Nooney, Jr.
-------------------------------------
Gregory J. Nooney, Jr.
Chairman of the Board and
Chief Executive Officer
By: /s/ Patricia A. Nooney
-------------------------------------
Patricia A. Nooney - Director
Senior Vice President and Secretary
BEING A MAJORITY OF THE DIRECTORS
-12-
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -------------------------------------------------------------------
3 Amended and Restated Agreement and Certificate of Limited
Partnership dated February 3, 1986, is incorporated by reference to
the Registrant's Annual Report on Form 10-K for the fiscal year
ended October 31, 1986, as filed pursuant to Rule 13a-1 of the
Securities Exchange Act of 1934 (File No. 0-14360).
27 Financial Data Schedule (provided for the information of the
Securities and Exchange Commission only)
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR NOONEY INCOME FUND LTD. II, L.P. AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000757764
<NAME> NOONEY INCOME FUND LTD. II, L.P.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
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0
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