FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
(As last amended by 34-32231, eff. 6/3/93.)
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 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.........
Commission file number 0-15758
JACQUES-MILLER INCOME FUND, L.P. II
(Exact name of small business issuer as specified in its charter)
Delaware 62-1244325
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
102 Woodmont Boulevard, Suite 420
Nashville, Tennessee 37205
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Check whether the issuer (1) 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 .
PART I - FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS
a) JACQUES-MILLER INCOME FUND, L.P. II
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 1996
Assets
Cash and cash equivalents $732
Notes receivable (net of allowance
of $3,026) --
$732
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 1
Other liabilities 15
Partners' Capital (Deficit)
General partner $(106)
Limited partners (12,400 units
issued and outstanding) 822 716
$732
See Accompanying Notes to Consolidated Financial Statements
b) JACQUES-MILLER INCOME FUND, L.P. II
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
Revenues:
Rental income $ 1 $ 177 $ 290 $ 602
Other income 13 18 54 73
Total revenues 14 195 344 675
Expenses:
Operating 2 87 146 271
General and administrative 9 29 35 90
Maintenance -- 27 56 82
Depreciation -- 30 -- 88
Interest -- 46 73 158
Property taxes -- 16 24 55
Total expenses 11 235 334 744
Gain on sale of investment
property -- -- 1,348 856
Income (loss) before
extraordinary item 3 (40) 1,358 787
Extraordinary loss on
early extinguishment of debt -- -- (221) --
Net income (loss) $ 3 $ (40) $ 1,137 $ 787
Net income (loss) allocated
to general partner (1%) $ -- $ -- $ 11 $ 8
Net income (loss) allocated
to limited partners (99%) 3 (40) 1,126 779
$ 3 $ (40) $ 1,137 $ 787
Per limited partnership unit:
Income (loss) before
extraordinary item $ .21 $ (3.20) $108.41 $ 62.87
Extraordinary item -- -- (17.63) --
Net income (loss) per limited
partnership unit $ .21 $ (3.20) $ 90.78 $ 62.87
See Accompanying Notes to Consolidated Financial Statements
c) JACQUES-MILLER INCOME FUND, L.P. II
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Partners' capital (deficit)
at December 31, 1995 12,400 $ (108) $ 613 $ 505
Net income for the nine months
ended September 30, 1996 11 1,126 1,137
Distributions to partners (9) (917) (926)
Partners' capital (deficit)
at September 30, 1996 12,400 $ (106) $ 822 $ 716
See Accompanying Notes to Consolidated Financial Statements
d) JACQUES-MILLER INCOME FUND, L.P. II
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
1996 1995
Cash flows from operating activities:
Net income $ 1,137 $ 787
Adjustments to reconcile net income to net cash
provided by (used in) in operating activities:
Depreciation -- 88
Amortization of discounts and loan costs 13 23
Gain on sale of investment property (1,348) (856)
Loss on early extinguishment of debt 221 --
Change in accounts:
Restricted cash 26 61
Accounts receivable -- 2
Escrow for taxes 17 96
Other assets 11 1
Accounts payable (36) (178)
Tenant security deposit liabilities 2 (64)
Accrued taxes -- (129)
Other liabilities 25 (37)
Net cash provided by (used in) operating
activities 68 (206)
Cash flows from investing activities:
Property improvements and replacements (13) (35)
Deposits to restricted escrows (15) (41)
Receipts from restricted escrows 126 463
Proceeds from sale of investment property 927 1,613
Net cash provided by investing activities 1,025 2,000
Cash flows from financing activities:
Payments on mortgage notes payable (21) (45)
Distributions (926) (1,872)
Net cash used in financing activities (947) (1,917)
Net increase (decrease) in cash and cash equivalents 146 (123)
Cash and cash equivalents at beginning of period 586 744
Cash and cash equivalents at end of period $ 732 $ 621
Supplemental disclosure of cash flow information:
Cash paid for interest $ 67 $ 153
See Accompanying Notes to Consolidated Financial Statements
e) JACQUES-MILLER INCOME FUND, L.P. II
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Jacques-Miller
Income Fund, L.P. II ("Partnership") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of the General Partner ("Jacques Miller, Inc."), all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three and nine month
periods ended September 30, 1996, are not necessarily indicative of the results
that may be expected for the fiscal year ending December 31, 1996. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Partnership's annual report on Form 10-KSB for the
fiscal year ended December 31, 1995.
Certain reclassifications have been made to the 1995 information to conform to
the 1996 presentation.
NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES
The Partnership has outstanding notes receivable with affiliated partnerships.
No income was recorded for the nine months ended September 30, 1996, and the
year ended December 31, 1995, as no payments were made to the Partnership. (See
"Note C" for further information concerning the notes receivable).
NOTE C - NOTES RECEIVABLE
The Partnership holds seven notes receivable at September 30, 1996, totaling
approximately $1,599,000 with approximately $1,427,000 of related accrued
interest, all of which is fully reserved. Included in the provision for
uncollectibles is approximately $1,054,000 of deferred interest revenue. Six of
the seven notes in the principal amount of approximately $1,201,000 are due from
related partnerships. These six promissory notes are unsecured by the related
partnerships and are subordinated to the underlying mortgages of the respective
partnerships.
NOTE D - SALE OF WILLOW OAKS
On January 17, 1995, Jacques-Miller Income Fund II Special Asset Partnership
(Willow Oaks), L.P., which is 99.9% owned by the Partnership, sold Willow Oaks
to an unaffiliated purchaser, Willow Bryan Apartments, L.P., a Delaware limited
partnership. The buyer assumed the mortgages, payable to Bank of America. The
total outstanding balance on the mortgage notes payable, including interest, was
approximately $5,439,000. The Partnership received net proceeds of
approximately $1,613,000 after payment of closing costs. This disposition
resulted in a gain of approximately $856,000.
NOTE E - SALE OF LA PLAZA
On May 24, 1996, Jacques-Miller Income Fund II Special Asset Partnership (La
Plaza) L.P., which is 99.9% owned by the Partnership, sold La Plaza Apartments,
located in Altamonte Springs, Florida, to an unaffiliated purchaser, Wymore
Equity Associates, L.C., a Florida limited liability company. The General
Partner decided to sell La Plaza, the sole remaining property held by the
Partnership, in its effort to terminate the Partnership. Wymore Equity
Associates, L.C. purchased La Plaza Apartments for a contract price of $3.2
million. Included as part of this purchase price is the assumption of
approximately $1,984,000 in first and second mortgage debt. The Partnership
received net proceeds of approximately $927,000 after payment of closing costs.
This disposition resulted in a gain of approximately $1,348,000 and a loss on
early extinguishment of debt of approximately $221,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership consisted of one investment property until May 24, 1996, when La
Plaza Apartments was sold to an unaffiliated purchaser. Average occupancy at La
Plaza Apartments was 94% through May 24, 1996, and 93% for the nine months ended
September 30, 1995.
Results of Operations
The Partnership's net income for the nine months ended September 30, 1996, was
approximately $1,137,000 as compared to net income of approximately $787,000 for
the nine months ended September 30, 1995. The Partnership recorded net income
of approximately $3,000 for the three months ended September 30, 1996, as
compared to a net loss of approximately $40,000 for the three months ended
September 30, 1995. The increase in net income for the nine month period ended
September 30, 1996, is primarily attributable to the gain of approximately
$1,348,000 on the sale of La Plaza Apartments which occurred on May 24, 1996.
Although Willow Oaks Apartments was sold in 1995, the gain realized was only
approximately $856,000. Also, operating, general and administrative,
maintenance, depreciation, interest, and property tax expense all decreased for
both the three and nine month periods ended September 30, 1996, due to the sale
of La Plaza Apartments. Partially offsetting the gain on the sale of La Plaza
Apartments was the recognition of an extraordinary loss on the early
extinguishment of debt of approximately $221,000. Rental income and other income
decreased during the three and nine month periods ended September 30, 1996, as a
result of the sale of La Plaza Apartments. This decrease was partially offset
by an increase in interest income due to an increase in the cash balances.
Liquidity and Capital Resources
At September 30, 1996, the Partnership reported unrestricted cash of
approximately $732,000 versus approximately $621,000 at September 30, 1995. Net
cash provided by operating activities increased as a result of the decrease in
accounts payable due to the sale of La Plaza. Net cash provided by investing
activities decreased primarily due to a decrease in the proceeds received from
the sale of investment properties. The Partnership recognized proceeds of
approximately $1,613,000 in January 1995 from the sale of Willow Oaks as
compared to proceeds of approximately $927,000 from the sale of La Plaza in May
1996. Also, the decrease is attributable to the decrease in receipts from
restricted escrows in 1996. In 1995, these receipts were used to fund roof
replacement costs. Net cash used in financing activities decreased primarily
due to the distribution of approximately $1,872,000 during the first nine months
of 1995. In August 1996, the Partnership paid distributions of approximately
$926,000 to the partners.
On May 24, 1996 the Partnership sold La Plaza Apartments to an unaffiliated
purchaser, Wymore Equity Associates, L.C., a Florida limited liability company.
The General Partner decided to sell La Plaza, the sole remaining property held
by the Partnership, in its effort to terminate the Partnership. Wymore Equity
Associates, L.C. purchased La Plaza Apartments for a contract price of
$3,200,000. Included as part of the purchase price is the assumption of
approximately $1,984,000 in first and second mortgage debt. The Partnership
received net proceeds of approximately $927,000 after payment of closing costs.
This disposition resulted in a gain of approximately $1,348,000 and a loss on
early extinguishment of debt of approximately $221,000.
The Partnership holds seven notes receivable at September 30, 1996, totaling
approximately $1,599,000 with approximately $1,427,000 of related accrued
interest, all of which is fully reserved. Included in the provision for
uncollectibles is approximately $1,054,000 of deferred interest revenue. Six of
the seven notes in the principal amount of approximately $1,201,000 are due from
related partnerships. These six promissory notes are unsecured by the related
partnerships and are subordinated to the underlying mortgages of the respective
partnerships. Payments on these notes are restricted to excess cash flow after
payment of the first and second mortgages. No payments were received in the
nine months ended September 30, 1996 or 1995. Future payments are dependent on
excess cash flows from the properties or sales proceeds.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8-K:
None filed during the quarter ended September 30, 1996.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
JACQUES-MILLER INCOME FUND, L.P. II
By: Jacques-Miller, Inc.
Corporate General Partner
By:/s/ C. David Griffin
C. David Griffin
President
Chief Executive Officer
Date: October 30, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Jacques-Miller Income Fund, L.P. II's 1996 Third Quarter 10-QSB and is qualified
in its entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000774655
<NAME> JACQUES-MILLER INCOME FUND, L.P. II
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 732
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 732
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 716
<TOTAL-LIABILITY-AND-EQUITY> 732
<SALES> 0
<TOTAL-REVENUES> 344
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 334
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 73
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (221)
<CHANGES> 0
<NET-INCOME> 1,137
<EPS-PRIMARY> 90.78<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multipler is 1.
</FN>
</TABLE>
