IR PASS-THROUGH CORP.
c/o Wexford Management LLC
411 West Putnam Avenue
Greenwich, CT 06830
(203) 862-7000
Fax: (203) 862-7461
Writer's Direct Dial:
862-7000
ARROS Fund II (the "Fund")
February, 1996
Dear Unitholder:
Enclosed for your review are the Fund's audited financial statements as of
December 31, 1995. As you are aware, the Funds' investments are passive in
nature and consist of interest-bearing payment obligations which originated from
a series of net lease real estate partnerships. As such, the primary source of
payment for these obligations is the lease payments received from the
partnership's corporate tenants. We are pleased to report that all tenant
obligations continue to be met and, on an overall basis, the credit ratings of
these tenants have not materially changed since the initial offering of the
Units.
As previously reported, the Fund has made arrangements with Royal Alliance
Associates (212-551-5100) to act as a market maker and with DCC Securities Corp.
(212-527-0220) to facilitate trading, as a broker, between buyers and sellers of
Units. Please contact these firms directly if you have any questions regarding
such activities.
If you have any specific questions regarding your holdings in the Fund, please
call IFTC at 800-874-6205.
Sincerely,
ARROS Fund II
By: IR Pass-through Corp., Sponsor
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Unitholders, Sponsor, and Trustee of
Integrated ARROs Fund II:
We have audited the accompanying financial statements of financial condition of
Integrated ARROs Fund II (the "Trust") as of December 31, 1995 and 1994,
including the schedule of portfolio investments as of December 31, 1995, and the
related statements of operations and changes in net assets for the years then
ended and the schedule of selected per unit operating performance, ratios and
supplemental data for the period April 16, 1987 (Inception) to December 31, 1987
and each of the eight years in the period ended December 31, 1995. These
financial statements and per unit operating performance, ratios and supplemental
data are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and per unit operating
performance, ratios and supplemental data based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and per unit
operating performance, ratios and supplemental data are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and selected per unit operating
performance, ratios and supplemental data referred to above present fairly, in
all material respects, the financial position of Integrated ARROs Fund II at
December 31, 1995 and 1994, the results of its operations and changes in its net
assets and the selected per unit operating performance, ratios and supplemental
data for the above-stated periods in conformity with generally accepted
accounting principles.
As explained in Note 2, the financial statements include investments in payment
obligations valued at $20,033,008 and $17,864,885 (100 percent of net assets)
for the years ended December 31, 1995 and 1994, respectively, whose values have
been stated at the lower of fair market value as estimated by the Board of
Directors of the Sponsor in the absence of readily ascertainable market values
or Minimum Termination Value. We have reviewed the procedures used by the Board
of Directors in arriving at its estimate of value of such investments and have
inspected underlying documentation, and, in the circumstances, we believe the
procedures are reasonable and the documentation appropriate. However, because of
the inherent uncertainty of valuation, those estimated values may differ
significantly from the values that would have been used had a ready market for
the investments existed, and the differences could be material.
DELOITTE & TOUCHE, LLP
New York, New York
February 19, 1996
<PAGE>
Integrated ARROs Fund II
Statements of Financial Condition
<TABLE>
<CAPTION>
December 31,
-------------------------
1995 1994
----------- -----------
<S> <C> <C>
Assets
Investments in payment obligations, at
minimum termination value (cost $7,446,008) .... $20,033,008 $17,864,885
=========== ===========
Net Asset .......................................... $20,033,008 $17,864,885
=========== ===========
Net Asset Value per unit (7,446 units
outstanding) ....................................... $ 2,690.44 $ 2,399.26
=========== ===========
</TABLE>
See notes to financial statements
<PAGE>
Integrated ARROs Fund II
Statements of Operations
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------
1995 1994
---------- ----------
<S> <C> <C>
Investment income:
Interest ......................... $2,168,123 $1,924,727
========== ==========
</TABLE>
See notes to financial statements
<PAGE>
Integrated ARROs Fund II
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------
1995 1994
----------- -----------
<S> <C> <C>
Increase in net assets from operations:
Investment income ......................... $ 2,168,123 $ 1,924,727
Net assets:
Beginning of period ............................ 17,864,885 15,940,158
----------- -----------
End of period .................................. $20,033,008 $17,864,885
=========== ===========
</TABLE>
See notes to financial statements
<PAGE>
Integrated ARROs Fund II
Notes to Financial Statements
1. ORGANIZATION
Integrated ARROs Fund II (the "Fund") is a grantor trust created under the
laws of the State of New York and registered under the Investment Company
Act of 1940 as a closed-end, non-diversified management investment company.
The Fund was formed in April 1987 for the purpose of realizing appreciation
in value and deferring the receipt of income through investments in a
portfolio consisting of payment obligations (the "Payment Obligations"),
issued by certain privately offered, single purpose limited partnerships
(the "Partnerships") previously sponsored by Integrated Resources, Inc.
("Integrated"). These Partnerships acquired and net leased commercial real
estate, which was sold to the Fund by IR Pass-through Corporation (the
"Sponsor"), formerly a wholly-owned subsidiary of Integrated. Pursuant to
the Consummation of A Plan of Reorganization ("the Steinhardt Plan"), on
November 3, 1994, the Sponsor is now a wholly-owned indirect subsidiary of
Presidio Capital Corp. ("Presidio") (See Footnote 3). All capitalized
terms, herein not defined, have the same meaning as defined in the Trust
Indenture.
2. SIGNIFICANT ACCOUNTING POLICIES
Security Valuation
The Payment Obligations are valued at the lower of fair market value (as
determined by the Board of Directors of the Sponsor) or Minimum Termination
Amount (as defined in the Trust Indenture).
Federal Income Taxes
The Fund is classified as a grantor trust. As a consequence, the Fund is
not subject to Federal Income Taxation.
3. CONFLICTS OF INTEREST
Entities directly or indirectly owned by former officers and/or directors
of the Sponsor and/or Integrated are the general partners of the
Partnerships. Such general partners have a fiduciary responsibility to make
decisions which are in the best interest of their respective Partnership.
There may be circumstances in which such general partners may make
decisions on behalf of the Partnerships which could conflict with or have
an adverse effect on the rights of unitholders of the Fund. Although the
Partnerships must comply with the terms of the Payment Obligations, there
can be no assurance that the decisions of the general partners on behalf of
the Partnerships would not adversely affect the value of the units and/or
the ability of the Partnerships to fulfill their obligations under the
Payment Obligations.
Subject to the rights of the Unitholders under the Trust Indenture,
Presidio is responsible for the administration of the Fund through its
indirect ownership of all of the shares of the Sponsor. Wexford Management
LLC ("Wexford"), formerly known as Concurrency Management Corp.
("Concurrency") provides administrative services to Presidio, who provides
services for the Fund.
4. THE PAYMENT OBLIGATIONS
The five Payment Obligations acquired by the Fund were issued from 1981 to
1982 for the sale to the Partnerships of rights to acquire interests in
properties or for services rendered.
Payments on the five Payment Obligations are scheduled over a period not in
excess of 40 years from commencement of the initial terms ("Primary
Terms"), ranging from 20 to 25 years, of the respective net leases.
Interest at simple interest rates ranging from 15.125% to 19.625% accrues
on the principal amount for each Payment Obligation. Payments on the
Payment Obligations are scheduled to commence approximately 15 years after
commencement of the Primary Terms of a net lease.
If a net lease is not extended by the lessee beyond the Primary Term, the
Partnership's obligation to pay the balance of the principal of a Payment
Obligation and accrued interest does not accelerate. In such event, the
Partnership may either seek to re-lease or to sell the property, but there
can be no assurance that such a sale or new lease would be made or that it
would be made timely. If a sale is made, the balance of the principal and
accrued interest thereon may be declared by the holder of the Payment
Obligation, in its discretion, to be immediately due and payable. Upon any
disposition by a Partnership of its interest in the property, the
Partnership shall be obligated to pay the holder of the Payment Obligation
(after satisfaction of any obligations senior to that of the Payment
Obligation which are then due and payable) first, accrued unpaid interest
and then the unpaid principal balance of the payment Obligation. If such
sale is not made, so long as the Partnership continues to make timely
payments under the Payment Obligation, generally there is no right of the
Fund to accelerate payment thereof.
There are significant limitations on the amounts that the Fund may receive
in the event of a sale or other disposition of a Partnership's property. As
such, it is possible that the Fund may not realize the entire outstanding
principal and interest thereon of the related Payment Obligation.
5. COMMITMENTS AND CONTINGENCIES
The Sponsor will bear all costs of administering the Fund through the
period in which the Fund will be receiving only primary term payments.
However, upon the period when the Fund begins receiving renewal term
payments, the Fund shall bear a portion of such costs equal to the
percentage of the renewal term payments received by the Fund in such year
to all of the payments received by the Fund in such year.
The Sponsor projects, based on a present value estimate of legal,
accounting, trustee fees, and printing and mailing costs, that the $450,000
previously received by the sponsor from Integrated in settlement of the
Sponsor's claim, will enable the Sponsor to meet its obligations to the
Fund, and its similar obligations to Fund I, through approximately the year
2000, at which time, the Sponsor believes, securities held by the Fund and
Fund I should begin to generate cash which could be used to administer the
Fund and Fund I. There can be no assurance that such cash will be generated
or that the $450,000 paid by Integrated will be sufficient to fund the
Sponsor's obligations through the year 2000.
<PAGE>
Set forth below is certain information with respect to the Sponsor's
directors and officers. The business address for each of them is c/o
Wexford Management LLC, 411 West Putnam Avenue, Greenwich, Connecticut
06830.
<TABLE>
<CAPTION>
NAME POSITIONS WITH SPONSOR PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
- ---- ---------------------- -----------------------------------------
<S> <C> <C>
Robert Holtz Director and President Presidio, Vice President and Secretary since August 1994; Resurgence, Vice
President and Assistant Secretary since March 1994; Wexford Management LLC,
Vice President since January 1996; Wexford Management Corp., Vice President
from November 1995 through December 1995; Concurrency, Vice President from May
1994 through October 1995; Bear Stearns Real Estate Group Inc., Vice President
from June 1993 through May 1994. Employed from 1989 to 1994.
Mark Plaumann Director and Vice President Wexford Management LLC, Senior Vice President since January 1996; Wexford
Management Corp., Senior Vice President from November 1995 through December
1995; Concurrency, Vice President from February 1995 through October 1995;
Alvarez and Marsel, Inc., a crisis-management consulting firm, Managing
Director from 1990 through January 1995.
Jay L. Maymudes Vice President, Secretary Presidio, Chief Financial Officer, Vice President and Treasurer since August
and Treasurer 1994; Resurgence, Chief Financial Officer, Vice President and Assistant
Secretary since July 1994; Wexford Management LLC, Chief Financial Officer and
Vice President since January 1996; Wexford Management Corp., Chief Financial
Officer and Vice President from November 1995 through December 1995;
Concurrency, Chief Financial Officer and Vice President from July 1994 through
October 1995; Dusco, Inc. (a real estate investment advisor), Secretary and
Treasurer from December 1988, and Senior Vice President from February 1990, in
each case through June 1994.
Arthur H. Amron Vice President & Assistant Presidio, Vice President since November 1994; Wexford Management LLC, General
Secretary Counsel since January 1996; Wexford Management Corp., General Counsel from
November 1995 through December 1995; Concurrency, General Counsel from November
1994 through October 1995; from 1992 to November 1994, attorney with Schulte,
Roth & Zabel; Prior to 1992, attorney with Debevoise & Plimpton.
Guy Sansone Assistant Secretary Wexford Management LLC, Vice President since January 1996; Wexford Management
Corp., Vice President from November 1995 through December 1995; Concurrency,
employed from November 1994 through October 1995; Deloitte & Touche LLP,
Manager, employed from 1989 through October 1994.
</TABLE>
The general partner of Trefar Associates ("Trefar") entered into a contract of
sale as of February 1, 1995 with Xerox Corporation, the lessee of the property
owned by Trefar. This contract is contingent upon several events including a
two-thirds approval vote by the limited partners. The anticipated closing of
this sale is April 1, 1996, at which time the Fund expects to realize proceeds
of approximately $5,000,000 based on the approximate minimum termination value
of the investment. If such proceeds are received, the Fund will not recognize
any material gain or loss on the transaction as it is carrying its investment at
the minimum termination value.
<PAGE>
<TABLE>
<CAPTION>
Integrated ARROs Fund II
Schedule of Portfolio Investments
December 31, 1995
Partnership
Date Payment Original Simple
Obligation Property Type of Principal Interest Accrued
Incurred Lessee Location property Amount Rate Interest
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bradall Albertson's Boise, ID Department $ 1,940,000 16.500% $ 4,177,123
12/16/82 Inc. Snohomish, WA Stores
Las Cruces, NM
Sioux Falls, SD
Bradenton, FL
Dalhill The Kroger Houston, TX Supermarkets 1,485,000 19.625% 4,070,492
1/15/82 Company Dallas, TX
Columbus, OH
Cincinnati, OH
Louisville, KY (2)
Trefar Xerox Freemont, CA Manufacturing/ 3,702,463 17.000% 9,110,269
7/21/81 Corporation Warehouse/
(amended Distribution
3/31/84) Facility
Walmad Walgreen Windsor, WI Warehouse/ 1,500,000 18.500% 3,844,739
2/25/82 Company Distribution
Facility
Zebon The Dow Creole, AL Plant 2,198,000 15.125% 4,214,377
5/1/83 Chemical Prudhoe Bay Station, AK Facilities
Company Mt. Pleasant, MI
Hebron, OH
Kellyville, OK
Tulsa, OK
Bryan, TX
Levelland, TX
----------- -----------
$10,825,463 $25,417,000
=========== ===========
(1) Primary Term of the applicable net lease.
(2) Two properties.
<PAGE>
<CAPTION>
Integrated ARROs Fund II
Schedule of Portfolio Investments -- Continued
December 31, 1995
Partnership Discount To
Date Payment Arrive at Periodic Minimum
Obligation Property Type of Minimum Termination Payment During Termination
Incurred Lessee Location property Value Primary Term (1) Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bradall Albertson's Boise, ID Department $ 2,190,472 7/1/98-1/1/08 $ 3,926,651
12/16/82 Inc. Snohomish, WA Stores $387,871/semi.
Las Cruces, NM
Sioux Falls, SD
Bradenton, FL
Dalhill The Kroger Houston, TX Supermarkets 1,621,045 1/31/97-12/31/06 3,934,447
1/15/82 Company Dallas, TX $57,242/mo.
Columbus, OH
Cincinnati, OH
Louisville, KY (2)
Trefar Xerox Freemont, CA Manufacturing/ 7,803,863 11/1/97-10/1/07 5,008,869
7/21/81 Corporation Warehouse/ $70,823/mo.
(amended Distribution
3/31/84) Facility
Walmad Walgreen Windsor, WI Warehouse/ 2,016,044 4/1/97-3/1/02 3,328,695
2/25/82 Company Distribution $23,125/mo.;
Facility 4/1/02-3/1/07
$92,551/mo.
Zebon
5/1/83 The Dow Creole, AL Plant 2,578,031 12/1/98-6/1/03 3,834,346
Chemical Prudhoe Bay Station, AK Facilities $558,719/semi.
Company Mt. Pleasant, MI
Hebron, OH
Kellyville, OK
Tulsa, OK
Bryan, TX
Levelland, TX
----------- -----------
$16,209,455 $20,033,008
=========== ===========
(1) Primary Term of the applicable net lease.
(2) Two properties.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Integrated ARROs Fund II
Schedule of Selected Per Unit Operating Performance, Ratios and Supplemental Data
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------
Per Unit Operating Performance 1995 1994 1993 1992 1991
- ------------------------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Begining of Period $ 2,399.26 $ 2,140.77 $ 1,902.45 $ 1,706.89 $ 1,525.18
Net Investment Income 291.18 258.49 238.32 195.56 181.71
----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period $ 2,690.44 $ 2,399.26 $ 2,140.77 $ 1,902.45 $ 1,706.89
=========== =========== =========== =========== ===========
Total Investment Return $ 291.18 $ 258.49 $ 238.32 $ 195.56 $ 181.71
=========== =========== =========== =========== ===========
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period $20,033,008 $17,864,885 $15,940,158 $14,165,629 $12,709,507
Ratio of Expense to Average Net Assets N/A N/A N/A N/A N/A
Ratio of Net Income to Average Net Assets 11.44% 11.39% 11.79% 10.83% 11.24%
Portfolio Turnover Rate N/A N/A N/A N/A N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INTEGRATED ARROS II -- SCHEDULE OF ACCRUED INTEREST ON OUTSTANDING PAYMENT OBLIGATIONS
JANUARY 1, 1995 THROUGH DECEMBER 31, 1995
DATE AMOUNT DATE AMOUNT DATE AMOUNT DATE AMOUNT
<S> <C> <C> <C> <C> <C> <C> <C>
1-Jan-95 23,570,871 23-Feb-95 23,839,631 17-Apr-95 24,108,392 9-Jun-95 24,377,152
2-Jan-95 23,575,942 24-Feb-95 23,844,702 18-Apr-95 24,113,463 10-Jun-95 24,382,223
3-Jan-95 23,581,013 25-Feb-95 23,849,773 19-Apr-95 24,118,534 11-Jun-95 24,387,294
4-Jan-95 23,586,084 26-Feb-95 23,854,844 20-Apr-95 24,123,605 12-Jun-95 24,392,365
5-Jan-95 23,591,155 27-Feb-95 23,859,915 21-Apr-95 24,128,676 13-Jun-95 24,397,436
6-Jan-95 23,596,226 28-Feb-95 23,864,986 22-Apr-95 24,133,747 14-Jun-95 24,402,507
7-Jan-95 23,601,297 1-Mar-95 23,870,057 23-Apr-95 24,138,818 15-Jun-95 24,407,578
8-Jan-95 23,606,368 2-Mar-95 23,875,128 24-Apr-95 24,143,889 16-Jun-95 24,412,649
9-Jan-95 23,611,439 3-Mar-95 23,880,199 25-Apr-95 24,148,959 17-Jun-95 24,417,720
10-Jan-95 23,616,510 4-Mar-95 23,885,270 26-Apr-95 24,154,030 18-Jun-95 24,422,791
11-Jan-95 23,621,580 5-Mar-95 23,890,341 27-Apr-95 24,159,101 19-Jun-95 24,427,862
12-Jan-95 23,626,651 6-Mar-95 23,895,412 28-Apr-95 24,164,172 20-Jun-95 24,432,933
13-Jan-95 23,631,722 7-Mar-95 23,900,483 29-Apr-95 24,169,243 21-Jun-95 24,438,004
14-Jan-95 23,636,793 8-Mar-95 23,905,554 30-Apr-95 24,174,314 22-Jun-95 24,443,075
15-Jan-95 23,641,864 9-Mar-95 23,910,625 1-May-95 24,179,385 23-Jun-95 24,448,146
16-Jan-95 23,646,935 10-Mar-95 23,915,696 2-May-95 24,184,456 24-Jun-95 24,453,217
17-Jan-95 23,652,006 11-Mar-95 23,920,767 3-May-95 24,189,527 25-Jun-95 24,458,288
18-Jan-95 23,657,077 12-Mar-95 23,925,838 4-May-95 24,194,598 26-Jun-95 24,463,358
19-Jan-95 23,662,148 13-Mar-95 23,930,909 5-May-95 24,199,669 27-Jun-95 24,468,429
20-Jan-95 23,667,219 14-Mar-95 23,935,979 6-May-95 24,204,740 28-Jun-95 24,473,500
21-Jan-95 23,672,290 15-Mar-95 23,941,050 7-May-95 24,209,811 29-Jun-95 24,478,571
22-Jan-95 23,677,361 16-Mar-95 23,946,121 8-May-95 24,214,882 30-Jun-95 24,483,642
23-Jan-95 23,682,432 17-Mar-95 23,951,192 9-May-95 24,219,953 1-Jul-95 24,488,713
24-Jan-95 23,687,503 18-Mar-95 23,956,263 10-May-95 24,225,024 2-Jul-95 24,493,784
25-Jan-95 23,692,574 19-Mar-95 23,961,334 11-May-95 24,230,095 3-Jul-95 24,498,855
26-Jan-95 23,697,645 20-Mar-95 23,966,405 12-May-95 24,235,166 4-Jul-95 24,503,926
27-Jan-95 23,702,716 21-Mar-95 23,971,476 13-May-95 24,240,237 5-Jul-95 24,508,997
28-Jan-95 23,707,787 22-Mar-95 23,976,547 14-May-95 24,245,308 6-Jul-95 24,514,068
29-Jan-95 23,712,858 23-Mar-95 23,981,618 15-May-95 24,250,379 7-Jul-95 24,519,139
30-Jan-95 23,717,929 24-Mar-95 23,986,689 16-May-95 24,255,449 8-Jul-95 24,524,210
31-Jan-95 23,723,000 25-Mar-95 23,991,760 17-May-95 24,260,520 9-Jul-95 24,529,281
1-Feb-95 23,728,070 26-Mar-95 23,996,831 18-May-95 24,265,591 10-Jul-95 24,534,352
2-Feb-95 23,733,141 27-Mar-95 24,001,902 19-May-95 24,270,662 11-Jul-95 24,539,423
3-Feb-95 23,738,212 28-Mar-95 24,006,973 20-May-95 24,275,733 12-Jul-95 24,544,494
4-Feb-95 23,743,283 29-Mar-95 24,012,044 21-May-95 24,280,804 13-Jul-95 24,549,565
5-Feb-95 23,748,354 30-Mar-95 24,017,115 22-May-95 24,285,875 14-Jul-95 24,554,636
6-Feb-95 23,753,425 31-Mar-95 24,022,186 23-May-95 24,290,946 15-Jul-95 24,559,707
7-Feb-95 23,758,496 1-Apr-95 24,027,257 24-May-95 24,296,017 16-Jul-95 24,564,778
8-Feb-95 23,763,567 2-Apr-95 24,032,328 25-May-95 24,301,088 17-Jul-95 24,569,848
9-Feb-95 23,768,638 3-Apr-95 24,037,399 26-May-95 24,306,159 18-Jul-95 24,574,919
10-Feb-95 23,773,709 4-Apr-95 24,042,469 27-May-95 24,311,230 19-Jul-95 24,579,990
11-Feb-95 23,778,780 5-Apr-95 24,047,540 28-May-95 24,316,301 20-Jul-95 24,585,061
12-Feb-95 23,783,851 6-Apr-95 24,052,611 29-May-95 24,321,372 21-Jul-95 24,590,132
13-Feb-95 23,788,922 7-Apr-95 24,057,682 30-May-95 24,326,443 22-Jul-95 24,595,203
14-Feb-95 23,793,993 8-Apr-95 24,062,753 31-May-95 24,331,514 23-Jul-95 24,600,274
15-Feb-95 23,799,064 9-Apr-95 24,067,824 1-Jun-95 24,336,585 24-Jul-95 24,605,345
16-Feb-95 23,804,135 10-Apr-95 24,072,895 2-Jun-95 24,341,656 25-Jul-95 24,610,416
17-Feb-95 23,809,206 11-Apr-95 24,077,966 3-Jun-95 24,346,727 26-Jul-95 24,615,487
18-Feb-95 23,814,277 12-Apr-95 24,083,037 4-Jun-95 24,351,798 27-Jul-95 24,620,558
19-Feb-95 23,819,348 13-Apr-95 24,088,108 5-Jun-95 24,356,869 28-Jul-95 24,625,629
20-Feb-95 23,824,419 14-Apr-95 24,093,179 6-Jun-95 24,361,939 29-Jul-95 24,630,700
21-Feb-95 23,829,490 15-Apr-95 24,098,250 7-Jun-95 24,367,010 30-Jul-95 24,635,771
22-Feb-95 23,834,560 16-Apr-95 24,103,321 8-Jun-95 24,372,081 31-Jul-95 24,640,842
<PAGE>
<CAPTION>
INTEGRATED ARROS II -- SCHEDULE OF ACCRUED INTEREST ON OUTSTANDING PAYMENT OBLIGATIONS -- Continued
JANUARY 1, 1995 THROUGH DECEMBER 31, 1995
DATE AMOUNT DATE AMOUNT DATE MOUNT
<S> <C> <C> <C> <C> <C>
1-Aug-95 24,645,913 23-Sep-95 24,914,673 15-Nov-95 25,183,434
2-Aug-95 24,650,984 24-Sep-95 24,919,744 16-Nov-95 25,188,505
3-Aug-95 24,656,055 25-Sep-95 24,924,815 17-Nov-95 25,193,576
4-Aug-95 24,661,126 26-Sep-95 24,929,886 18-Nov-95 25,198,647
5-Aug-95 24,666,197 27-Sep-95 24,934,957 19-Nov-95 25,203,717
6-Aug-95 24,671,268 28-Sep-95 24,940,028 20-Nov-95 25,208,788
7-Aug-95 24,676,338 29-Sep-95 24,945,099 21-Nov-95 25,213,859
8-Aug-95 24,681,409 30-Sep-95 24,950,170 22-Nov-95 25,218,930
9-Aug-95 24,686,480 1-Oct-95 24,955,241 23-Nov-95 25,224,001
10-Aug-95 24,691,551 2-Oct-95 24,960,312 24-Nov-95 25,229,072
11-Aug-95 24,696,622 3-Oct-95 24,965,383 25-Nov-95 25,234,143
12-Aug-95 24,701,693 4-Oct-95 24,970,454 26-Nov-95 25,239,214
13-Aug-95 24,706,764 5-Oct-95 24,975,525 27-Nov-95 25,244,285
14-Aug-95 24,711,835 6-Oct-95 24,980,596 28-Nov-95 25,249,356
15-Aug-95 24,716,906 7-Oct-95 24,985,667 29-Nov-95 25,254,427
16-Aug-95 24,721,977 8-Oct-95 24,990,737 30-Nov-95 25,259,498
17-Aug-95 24,727,048 9-Oct-95 24,995,808 1-Dec-95 25,264,569
18-Aug-95 24,732,119 10-Oct-95 25,000,879 2-Dec-95 25,269,640
19-Aug-95 24,737,190 11-Oct-95 25,005,950 3-Dec-95 25,274,711
20-Aug-95 24,742,261 12-Oct-95 25,011,021 4-Dec-95 25,279,782
21-Aug-95 24,747,332 13-Oct-95 25,016,092 5-Dec-95 25,284,853
22-Aug-95 24,752,403 14-Oct-95 25,021,163 6-Dec-95 25,289,924
23-Aug-95 24,757,474 15-Oct-95 25,026,234 7-Dec-95 25,294,995
24-Aug-95 24,762,545 16-Oct-95 25,031,305 8-Dec-95 25,300,066
25-Aug-95 24,767,616 17-Oct-95 25,036,376 9-Dec-95 25,305,137
26-Aug-95 24,772,687 18-Oct-95 25,041,447 10-Dec-95 25,310,207
27-Aug-95 24,777,758 19-Oct-95 25,046,518 11-Dec-95 25,315,278
28-Aug-95 24,782,828 20-Oct-95 25,051,589 12-Dec-95 25,320,349
29-Aug-95 24,787,899 21-Oct-95 25,056,660 13-Dec-95 25,325,420
30-Aug-95 24,792,970 22-Oct-95 25,061,731 14-Dec-95 25,330,491
31-Aug-95 24,798,041 23-Oct-95 25,066,802 15-Dec-95 25,335,562
1-Sep-95 24,803,112 24-Oct-95 25,071,873 16-Dec-95 25,340,633
2-Sep-95 24,808,183 25-Oct-95 25,076,944 17-Dec-95 25,345,704
3-Sep-95 24,813,254 26-Oct-95 25,082,015 18-Dec-95 25,350,775
4-Sep-95 24,818,325 27-Oct-95 25,087,086 19-Dec-95 25,355,846
5-Sep-95 24,823,396 28-Oct-95 25,092,157 20-Dec-95 25,360,917
6-Sep-95 24,828,467 29-Oct-95 25,097,227 21-Dec-95 25,365,988
7-Sep-95 24,833,538 30-Oct-95 25,102,298 22-Dec-95 25,371,059
8-Sep-95 24,838,609 31-Oct-95 25,107,369 23-Dec-95 25,376,130
9-Sep-95 24,843,680 1-Nov-95 25,112,440 24-Dec-95 25,381,201
10-Sep-95 24,848,751 2-Nov-95 25,117,511 25-Dec-95 25,386,272
11-Sep-95 24,853,822 3-Nov-95 25,122,582 26-Dec-95 25,391,343
12-Sep-95 24,858,893 4-Nov-95 25,127,653 27-Dec-95 25,396,414
13-Sep-95 24,863,964 5-Nov-95 25,132,724 28-Dec-95 25,401,485
14-Sep-95 24,869,035 6-Nov-95 25,137,795 29-Dec-95 25,406,556
15-Sep-95 24,874,106 7-Nov-95 25,142,866 30-Dec-95 25,411,627
16-Sep-95 24,879,177 8-Nov-95 25,147,937 31-Dec-95 25,416,697
17-Sep-95 24,884,248 9-Nov-95 25,153,008 1-Jan-96 25,421,768
18-Sep-95 24,889,318 10-Nov-95 25,158,079
19-Sep-95 24,894,389 11-Nov-95 25,163,150
20-Sep-95 24,899,460 12-Nov-95 25,168,221
21-Sep-95 24,904,531 13-Nov-95 25,173,292
22-Sep-95 24,909,602 14-Nov-95 25,178,363
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
INTEGRATED ARROS II
SCHEDULE OF ACCRUED INTEREST ON OUTSTANDING PAYMENT OBLIGATIONS -- Continued
JANUARY 1, 1995 THROUGH DECEMBER 31, 1995
INTEREST
PAYMENT INTEREST ANNUAL INCEPTION TO INCEPTION
OBLIGATION RATE INTEREST 31-Dec-95 DATE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1,940,000 16.500% 320,100 4,177,086 16-Dec-82
1,485,000 19.625% 291,431 4,070,456 15-Jan-82
3,702,463 17.000% 629,419 9,110,189 14-Jul-81
1,500,000 18.500% 277,500 3,844,705 25-Feb-82
2,198,000 15.125% 332,448 4,214,341 1-May-83
- ---------- --------- ----------
10,825,463 1,850,897 25,416,778
========== ========= ==========
ROUNDED 25,417,000
==========
12/31/94 INTEREST AMOUNT 23,565,800
==========
DAILY INTEREST AMOUNT 5,070.95
==========
</TABLE>
<PAGE>
For period ended 12/31/95
File Number 811-4393
Signature Page
This report is signed on behalf of the Registrant in the town of Greenwich in
the State of Connecticut on the 29th day of February, 1996.
IR Pass-through Corporation
(Sponsor of Integrated ARROs
Fund II, the Registrant during the
period ending 12/31/95)
Witness: /s/ Jay L. Maymudes By: /s/ Robert Holtz
------------------------------- -----------------------
Name: Jay L. Maymudes Robert Holtz, President
Title: Vice President,
Secretary and Treasurer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 20,033
<RECEIVABLES> 0
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</TABLE>
