<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1995
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: 0-15726
SUMMIT TAX EXEMPT L.P. II
--------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 13-3370413
--------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Ave., New York, N.Y. 10022
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 421-5333
N/A
--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report
Indicate by check CK 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 _CK_ No __
<PAGE>
<PAGE>
Part I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SUMMIT TAX EXEMPT L.P. II
(a limited partnership)
STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
<S> <C> <C>
--------------------------------------------------------------------------------------------------
ASSETS
Participating first mortgage bonds, net $159,199,346 $159,186,119
Temporary investments 3,692,034 2,175,490
Cash 85,019 872,662
Cash held in escrow -- 520,677
Interest receivable, net 747,994 797,401
Promissory notes receivable, net 121,014 175,405
Deferred bond selection fees, net 2,082,026 2,174,386
Other assets 37,493 15,803
------------ ------------
Total assets $165,964,926 $165,917,943
------------ ------------
------------ ------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Deferred income $ 510,036 $ 568,953
Due to affiliates 359,760 30,481
Accrued expenses 69,489 67,017
Reserve for disputed claim -- 422,287
------------ ------------
Total liabilities 939,285 1,088,738
------------ ------------
Contingencies
Partners' capital
BUC$holders (9,151,620 BUC$ issued and outstanding) 165,118,154 164,925,646
General partners (92,513) (96,441)
------------ ------------
Total partners' capital 165,025,641 164,829,205
------------ ------------
Total liabilities and partners' capital $165,964,926 $165,917,943
------------ ------------
------------ ------------
--------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements
</TABLE>
2
<PAGE>
<PAGE>
SUMMIT TAX EXEMPT L.P. II
(a limited partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended Three months ended
June 30, June 30,
------------------------- -------------------------
1995 1994 1995 1994
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------
REVENUES
Interest income from participating first
mortgage bonds, net $5,863,440 $5,709,215 $2,776,893 $2,926,859
Interest income from temporary investments 61,269 26,136 36,262 13,880
Interest income from promissory notes 13,960 20,357 5,765 8,433
---------- ---------- ---------- ----------
5,938,669 5,755,708 2,818,920 2,949,172
---------- ---------- ---------- ----------
EXPENSES
Management fees 405,312 405,312 202,656 202,656
Loan servicing fees 200,991 200,991 101,051 101,051
General and administrative 187,608 158,952 102,542 79,450
Amortization of deferred bond selection
fees 92,360 92,360 46,180 46,180
---------- ---------- ---------- ----------
886,271 857,615 452,429 429,337
---------- ---------- ---------- ----------
Net income $5,052,398 $4,898,093 $2,366,491 $2,519,835
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
ALLOCATION OF NET INCOME
BUC$holders $4,951,350 $4,800,131 $2,319,161 $2,469,438
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
General partners $ 101,048 $ 97,962 $ 47,330 $ 50,397
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income per BUC $ .54 $ .52 $ .25 $ .27
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
-----------------------------------------------------------------------------------------------------
</TABLE>
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
<TABLE>
<CAPTION>
GENERAL
BUC$HOLDERS PARTNERS TOTAL
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------
Partners' capital (deficit)--December 31, 1994 $164,925,646 $(96,441) $164,829,205
Net income 4,951,350 101,048 5,052,398
Distributions (4,758,842) (97,120 ) (4,855,962)
------------ -------- ------------
Partners' capital (deficit)--June 30, 1995 $165,118,154 $(92,513) $165,025,641
------------ -------- ------------
------------ -------- ------------
---------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements
</TABLE>
3
<PAGE>
<PAGE>
SUMMIT TAX EXEMPT L.P. II
(a limited partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30,
---------------------------
<S> <C> <C>
1995 1994
---------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received, net $ 5,954,969 $ 5,487,616
Fees and expenses paid (483,850) (576,984)
Receipt of cash held in escrow 98,390 --
----------- -----------
Net cash provided by operating activities 5,569,509 4,910,632
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Net purchase of temporary investments (1,516,544) (256,220)
Principal payments received from loans made to properties 15,354 14,181
----------- -----------
Net cash used in investing activities (1,501,190) (242,039)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions paid (4,855,962) (4,855,961)
----------- -----------
Net decrease in cash (787,643) (187,368)
Cash at beginning of period 872,662 302,826
----------- -----------
Cash at end of period $ 85,019 $ 115,458
----------- -----------
----------- -----------
---------------------------------------------------------------------------------------------------
SCHEDULE RECONCILING NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Net income $ 5,052,398 $ 4,898,093
----------- -----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of deferred bond selection fees 92,360 92,360
Accretion of valuation allowance (13,227) (13,227)
Accretion of deferred income (19,880) --
Changes in:
Cash held in escrow 520,677 (5,092)
Interest receivable, net 49,407 (249,773)
Promissory notes receivable, net 39,037 28,739
Other assets (21,690) (29,664)
Accrued expenses 2,472 (55,558)
Deferred income (39,037) (28,739)
Due to affiliates 329,279 273,493
Reserve for disputed claim (422,287) --
----------- -----------
Total adjustments 517,111 12,539
----------- -----------
Net cash provided by operating activities $ 5,569,509 $ 4,910,632
----------- -----------
----------- -----------
---------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements
</TABLE>
4
<PAGE>
<PAGE>
SUMMIT TAX EXEMPT L.P. II
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
(Unaudited)
A. General
These financial statements have been prepared without audit. In the opinion
of management, the financial statements contain all adjustments (consisting of
only normal recurring adjustments) necessary to present fairly the financial
position of Summit Tax Exempt L.P. II (the ``Partnership'') as of June 30, 1995,
the results of its operations for the six and three months ended June 30, 1995
and 1994 and its cash flows for the six months ended June 30, 1995 and 1994.
However, the operating results for the interim periods may not be indicative of
the results expected for the full year.
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. It is suggested that these financial statements be
read in conjunction with the financial statements and notes thereto included in
the Partnership's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the year ended December 31, 1994.
B. Participating First Mortgage Bonds
Effective January 1, 1995, the Partnership adopted Statement of Financial
Accounting Standards (``SFAS'') No. 114, Accounting by Creditors for Impairment
of a Loan. The initial adoption of SFAS No. 114 had no effect on the net income
of the Partnership for the six months ended June 30, 1995.
SFAS No. 114 requires creditors to evaluate the collectibility of both
interest and principal of a participating first mortgage bond (``FMB'') when
determining whether it is impaired. An FMB is considered to be impaired when,
based on current information and events, it is probable the creditor will be
unable to collect all amounts due according to the contractual terms. When an
FMB is considered to be impaired, the amount of the loss accrual is determined
by discounting the expected future cash flows of the FMB at its effective
interest rate or, for practical purposes, from the estimated fair value of the
collateral. To the extent that the owners of properties underlying the FMBs may
require modifications to their forbearance agreements or the FMBs may otherwise
become impaired in subsequent periods, the Partnership may be required to record
additional valuation allowances which could have a material effect on the
Partnership's financial statements.
Prior to January 1, 1995, the original owner of the underlying property and
obligor of the Pelican Cove FMB had been replaced by an affiliate of Related Tax
Exempt Associates II, Inc. (the ``Related General Partner'') who had not made an
equity investment in the underlying property. This FMB, which had been
classified as an Asset Held for Sale in prior years, has been reclassified to an
FMB in 1995 for all periods presented.
5
<PAGE>
<PAGE>
Descriptions of the various FMBs owned by the Partnership at June 30, 1995
are as follows:
<TABLE>
<CAPTION>
Annualized
Interest
Rate Paid
for the
six months Minimum
ended Pay Rate Stated
June 30, June Interest Call Maturity Face Carrying
Property Location 1995* 1995 Rate* Date Date Amount Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C>
--------------- --------------- ----------- ----------- ------- ------------ ------------ ------------ ------------
Bay Club Mt. Pleasant,
SC 8.83% 7.25% 8.25% Sep. 2000 Sep. 2006 $ 6,400,000 $ 6,274,346
Loveridge Contra Costa,
CA 6.16(E) 8.00 8.00 Nov. 1998 Nov. 2006 8,550,000 8,550,000
The Lakes Kansas City, MO 5.21(D) 4.87 4.87 Dec. 2006 Dec. 2006 13,650,000 12,750,000
Crowne Pointe Olympia, WA 8.00 8.00 8.00 Dec. 1998 Dec. 2006 5,075,000 5,075,000
Orchard Hills Tacoma, WA 8.00 8.00 8.00 Dec. 1998 Dec. 2006 5,650,000 5,650,000
Highland Ridge St. Paul, MN 6.54(F) 8.00 8.00 Feb. 1999 Feb. 2007 15,000,000 15,000,000
Newport Village Tacoma, WA 7.75(C) 7.00 8.00 Jan. 1999 Jan. 2007 13,000,000 13,000,000
Sunset Downs Lancaster, CA 5.60(E) 7.75 8.00 May 1999 May 2007 15,000,000 15,000,000
Willow Creek Ames, IA 8.00 8.00 8.00 Oct. 1999 Oct. 2006 6,100,000 6,100,000
Cedar Pointe Nashville, TN 8.00 8.00 8.00 Apr. 1999 Apr. 2007 9,500,000 9,500,000
Shannon Lake Atlanta, GA 6.00 6.00 8.00 Jun. 1999 Jun. 2007 12,000,000 12,000,000
Bristol Village Bloomington, MN 8.96(C) 7.50 8.00 Jun. 1999 Jun. 2005 17,000,000 17,000,000
Suntree Ft. Myers, FL 7.50 7.50 8.00 Jul. 1999 Jul. 2007 7,500,000 7,500,000
River Run Miami, FL 8.00 8.00 8.00 Aug. 1999 Aug. 2007 7,200,000 7,200,000
Pelican Cove St. Louis, MO 7.50 (B) 8.00 Feb. 1999 Feb. 2007 18,000,000 18,000,000
Players Club(A) Ft. Myers, FL 7.00 7.00 8.00 Aug. 1999 Aug. 2007 2,500,000 2,500,000
------------ ------------
$162,125,000 161,099,346
------------
------------
Less: Allowance for loss on impairment of assets (1,900,000)
------------
Carrying Amount $159,199,346
------------
------------
* The rate paid represents the interest recorded by the Partnership while the stated rate represents the coupon rate of the FMB.
(A) Summit Tax Exempt L.P. III, of which the general partners are either the same or affiliates of the General Partners of the
Partnership, acquired the other $7,200,000 of the Players Club FMB.
(B) Pay rate is based on the net cash flow generated by the property.
(C) Includes receipt of deferred base interest relating to prior periods.
(D) Includes contingent interest received during the six months ended June 30, 1995.
(E) See discussion below.
(F) Represents five monthly payments.
</TABLE>
Effective with the May 1, 1995 payment date, the Loveridge and Sunset Downs
FMBs have made payments based on the monthly net cash flow generated by the
operations of the underlying properties pending finalization of the agreement
outlined below.
Pursuant to an executed Letter of Intent, the obligor of the Sunset Downs FMB
has agreed to enter into a forbearance agreement to be effective as of August 1,
1995. In accordance with the terms of this agreement, the obligor of the FMB
will pay debt service on the FMB to the extent of the cash flow generated by the
underlying property. The difference between the pay rate and the stated rate of
this FMB is deferred and payable out of available future cash flow. Pursuant to
the terms of the agreement, the obligor will replace the present property
manager and leasing agent with a new property manager who is an affiliate of the
Related General Partner. Other terms of the agreement call for the deed to be
transferred to the Partnership or its designee no later than January 30, 1997
should the obligor be unable to bring the FMB fully current on all interest due
and payable (including deferred base interest) on or before that date. These
obligations are secured by a guarantee from an affiliate of the obligor which
is intended to protect certain of the Partnership's rights. No additional
allowance for loss on impairment was required as a result of this transaction.
Pursuant to an executed Letter of Intent, the original owner and obligor of
the Loveridge FMB has agreed to transfer the deed to the underlying property to
be effective as of August 1, 1995 to an affiliate of the Related General Partner
for limited consideration. Pursuant to the agreement, the Related affiliate, who
has not made an equity investment in the underlying property, will assume the
day-to-day responsibilities and obligations of operating the property. The
Partnership will receive the monthly net cash generated by the property as
payment toward debt service. No additional allowance for loss on impairment was
required as a result of this transaction.
Final documentation of these agreements has not yet been completed. There is
no certainty that these agreements will be finalized.
6
<PAGE>
<PAGE>
With respect to the FMBs which are subject to forbearance agreements with the
respective obligors, the difference between the stated interest rates and the
actual rates paid (while deferred and payable out of available future cash flow
or, ultimately, from sale or refinancing proceeds) on FMBs is not accrued for
financial statement purposes. The accrual of interest at the stated interest
rate will resume once a property's ability to pay the stated rate has been
adequately demonstrated. Unrecorded contractual interest income was
approximately $401,000 and $928,000 for the six months ended June 30, 1995 and
1994, respectively.
On May 13, 1993, the Partnership, on behalf of Lakes Project Investors, Inc.
(``LPI''), an affiliate of the Related General Partner who replaced the original
developer, deposited a cash escrow of $500,000 in connection with the filing of
an appeal of a mechanics lien judgment rendered against The Lakes. In July,
1994, the appeal was rejected and the judgment affirmed. However, at that time
LPI petitioned the court for a rehearing or, in the alternative, a transfer of
the case to the Missouri Supreme Court. On January 23, 1995, in settlement of
this case, LPI and the plaintiff agreed that approximately $422,000 of the
current escrow balance be paid to the plaintiff. The balance of funds
(approximately $99,000) remaining in escrow was returned to LPI and thence to
the Partnership. Previously, the Partnership had reserved fully for the appeal.
C. Related Parties
The General Partners and their affiliates perform services for the
Partnership which include, but are not limited to: accounting and financial
management; registrar, transfer and assignment functions; asset management;
investor communications; printing and other administrative services. The General
Partners and their affiliates receive reimbursements for costs incurred in
connection with the services, the amount of which is limited by provisions of
the Agreement of Limited Partnership (the ``Partnership Agreement''). The costs
and expenses were:
<TABLE>
<CAPTION>
Six months ended Three months ended
June 30, June 30,
-------------------- --------------------
1995 1994 1995 1994
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------
Prudential-Bache Properties, Inc. (``PBP'') and
affiliates:
Management fee $202,656 $202,656 $101,328 $101,328
General and administrative 68,232 49,603 41,646 24,801
-------- -------- -------- --------
270,888 252,259 142,974 126,129
-------- -------- -------- --------
Related General Partner and affiliates:
Management fee 202,656 202,656 101,328 101,328
Loan servicing fees 200,991 200,991 101,051 101,051
General and administrative 10,081 8,007 5,894 1,375
-------- -------- -------- --------
413,728 411,654 208,273 203,754
-------- -------- -------- --------
$684,616 $663,913 $351,247 $329,883
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
An affiliate of the Related General Partner receives loan servicing fees (see
above) in the amount of .25% per annum of the principal amount outstanding on
FMBs serviced by the affiliate.
The General Partners are paid, in the aggregate, an annual management fee
equal to .5% of the original amount invested in FMBs.
A division of Prudential Securities Incorporated (``PSI''), an affiliate of
PBP, is responsible for the purchase, sale, and safekeeping of the Partnership's
temporary investments. This account is maintained in accordance with the
Partnership Agreement.
PSI owns 60,625 BUC$ at June 30, 1995.
The Players Club property (securing a $2,500,000 FMB in this Partnership)
also secures an FMB for $7,200,000 owned by Summit Tax Exempt L.P. III, of which
the general partners are either the same or affiliates of the General Partners
of this Partnership.
The original obligors of the Suntree, Players Club and River Run FMBs are
affiliates of the Related General Partner.
7
<PAGE>
<PAGE>
D. Contingencies
On October 18, 1993, a putative class action, captioned Kinnes et al. v.
Prudential Securities Group Inc. et al. (93 Civ. 654), was filed in the United
States District Court for the District of Arizona, purportedly on behalf of
investors in the Partnership against the Partnership, PBP, PSI and a number of
other defendants. On November 16, 1993, a putative class action captioned
Connelly et al. v. Prudential-Bache Securities Inc. et al. (93 Civ. 713), was
filed in the United States District Court for the District of Arizona,
purportedly on behalf of investors in the Partnership against the Partnership,
PBP, PSI and a number of other defendants. On January 3, 1992, a putative class
action, captioned Levine v. Prudential-Bache Properties Inc. et al. (92 Civ.
52), was filed in the United States District Court for the Northern District of
Illinois purportedly on behalf of investors in the Partnership against the
General Partners, PSI and a number of other defendants. Subsequently the Related
General Partner exited the litigation by way of settlement. On April 14, 1994,
the Judicial Panel on Multidistrict Litigation (the ``Panel'') deferred transfer
of the case to the Southern District of New York (discussed more fully below)
until after the Illinois court decided a pending motion to dismiss the
complaint. On June 3, 1994, that court granted the motion of PBP and PSI and
dismissed the first amended complaint without prejudice. On June 30, 1994,
plaintiffs filed a second amended complaint. The Panel subsequently reaffirmed
the April 14, 1994 transfer. By order dated July 13, 1994, the Panel
unconditionally transferred the Levine case for inclusion in the consolidated
proceedings in the Southern District of New York described below.
By its April 14, 1994 order, the Panel transferred (in addition to Levine as
discussed above) the Kinnes case, and by order dated June 8, 1994, the Connelly
case, together with a number of other actions, on each occasion, not involving
the Partnership, to a single judge of the United States District Court for the
Southern District of New York and consolidated them for pretrial proceedings
under the caption In re Prudential Securities Incorporated Limited Partnerships
Litigation (MDL Docket 1005). On June 8, 1994, plaintiffs in the transferred
cases filed a complaint that consolidated the previously filed complaints and
named as defendants, among others, PSI, certain of its present and former
employees and the General Partners. The Partnership is not named a defendant in
the consolidated complaint, but the name of the Partnership is listed as being
among the limited partnerships at issue in the case. The consolidated complaint
alleges violations of the federal and New Jersey Racketeer Influenced and
Corrupt Organizations Act (``RICO'') statutes, fraud, negligent
misrepresentation, breach of fiduciary duties, breach of third-party beneficiary
contracts and breach of implied covenants in connection with the marketing and
sales of limited partnership interests. Plaintiffs request relief in the nature
of rescission of the purchase of securities and recovery of all consideration
and expenses in connection therewith, as well as compensation for lost use of
money invested less cash distributions; compensatory damages; consequential
damages; treble damages for defendants' RICO violations (both federal and New
Jersey); general damages for all injuries resulting from negligence, fraud,
breaches of contract, and breaches of duty in an amount to be determined at
trial; disgorgement and restitution of all earnings, profits, benefits and
compensation received by defendants as a result of their unlawful acts; costs
and disbursements of the action; reasonable attorneys' fees; and such other and
further relief as the court deems just and proper.
On November 28, 1994 the transferee court deemed each of the complaints in
the constituent actions (including Kinnes) amended to conform to the allegations
of the consolidated complaint. PSI and PBP, along with various other defendants,
filed a motion to dismiss the consolidated complaint on December 20, 1994. That
motion is pending.
The General Partners and PSI believe they have meritorious defenses to the
complaints and intend to vigorously defend against these actions.
E. Subsequent Event
In August 1995, a distribution of approximately $2,379,000 and $49,000 was
paid to the BUC$holders and General Partners, respectively, for the quarter
ended June 30, 1995.
8
<PAGE>
<PAGE>
SUMMIT TAX EXEMPT L.P. II
(a limited partnership)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Summit Tax Exempt L.P. II (``the Partnership'') has invested in sixteen
tax-exempt participating first mortgage bonds (``FMBs'') issued by various state
or local governments or their agencies or authorities. The FMBs are secured by
participating first mortgage loans on multi-family residential apartment
properties.
At the beginning of the year, the Partnership had cash and temporary
investments of $3,048,000. After payment of distributions and receipt of the net
cash flow from operations, the Partnership ended the quarter with $3,777,000 in
cash and temporary investments. The second quarter distribution of $2,379,000
($.26 per BUC) was paid to BUC$holders in August 1995 from cash flow from
operations. As further discussed in Note B to the financial statements, two FMBs
will be restructured effective as of August 1, 1995. These restructurings may
negatively impact liquidity in future quarters. Interest payments from FMBs are
anticipated to provide sufficient liquidity to meet the operating expenditures
of the Partnership in future years and to fund distributions.
Results of Operations
Net income increased by $154,000 for the six months ended June 30, 1995 but
decreased by $153,000 for the three months ended June 30, 1995 as compared to
1994 for the reasons discussed below.
Interest income from FMBs increased by $154,000 but decreased by $150,000 for
the six and three months ended June 30, 1995, respectively, as compared to 1994.
These fluctuations are primarily due to additional interest received from the
Newport Village, Bristol Village, Players Club and Suntree FMBs as required by
the terms of their respective forbearance agreements, increased cash flow
generated by the Pelican Cove property which increased its interest payments to
the Partnership and contingent interest received from The Lakes. These increases
were partially offset by reduced debt service payments received from the
Loveridge and Sunset Downs FMBs during the three month period ended June 30,
1995 (see Note B to the financial statements for further discussion) and
nonrecurring contingent interest received from Crowne Pointe and Willow Creek in
1994.
Interest income from promissory notes decreased by $6,000 and $3,000 for the
six and three months ended June 30, 1995, respectively, as compared to 1994 due
to the repayment of the Pelican Cove and The Lakes property tax loans in May
1994.
Interest income from temporary investments increased by approximately $35,000
and $22,000 for the six and three months ended June 30, 1995, respectively, as
compared to 1994 due to higher interest rates and invested balances in 1995.
General and administrative expenses increased by approximately $29,000 and
$23,000 for the six and three months ended June 30, 1995, respectively, as
compared to 1994. This increase is primarily due to an increase in
administrative expense as well as legal costs relating to the Kinnes litigation
described in Note D to the financial statements.
9
<PAGE>
<PAGE>
Property Information
The following table lists the FMBs the Partnership owns together with
occupancy rates of the underlying properties as of July 16, 1995:
<TABLE>
<CAPTION>
Annualized Interest
Rate Paid
Stated for the six Minimum
Face Interest months ended Pay Rate
Property Location Amount of FMB Occupancy Rate* June 30, 1995* June 1995
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------
Bay Club Mt. Pleasant, SC $ 6,400,000 96.9% 8.25% 8.83% 7.25%
Loveridge Contra Costa, Ca 8,550,000 96.6 8.00 6.16(E) 8.00
The Lakes Kansas City, Mo 13,650,000 87.4 4.87 5.21(D) 4.87
Crowne Pointe Olympia, Wa 5,075,000 86.2 8.00 8.00 8.00
Orchard Hills Tacoma, Wa 5,650,000 92.0 8.00 8.00 8.00
Highland Ridge St. Paul, Mn 15,000,000 99.1 8.00 6.54(F) 8.00
Newport Village Tacoma, Wa 13,000,000 90.8 8.00 7.75(C) 7.00
Sunset Downs Lancaster, Ca 15,000,000 82.5 8.00 5.60(E) 7.75
Pelican Cove St. Louis, Mo 18,000,000 97.4 8.00 7.50 (B)
Willow Creek Ames, Ia 6,100,000 100.0 8.00 8.00 8.00
Cedar Pointe Nashville, Tn 9,500,000 94.2 8.00 8.00 8.00
Shannon Lake Atlanta, Ga 12,000,000 95.9 8.00 6.00 6.00
Bristol Village Bloomington, Mn 17,000,000 100.0 8.00 8.96(C) 7.50
Suntree Ft. Myers, Fl 7,500,000 91.9 8.00 7.50 7.50
River Run Miami, Fl 7,200,000 98.1 8.00 8.00 8.00
Players Club(A) Ft. Myers, Fl 2,500,000 86.0 8.00 7.00 7.00
-------------
$162,125,000
-------------
-------------
------------------------------------------------------------------------------------------------------------------------
* The rate paid represents the interest recorded by the Partnership while the stated rate represents the coupon rate of the
FMB.
(A) Summit Tax Exempt L.P. III, of which the general partners are either the same or affiliates of the General Partners of
the Partnership, acquired the other $7,200,000 of the Players Club FMB.
(B) Pay rate is based on the net cash flow generated by the property.
(C) Includes receipt of deferred base interest relating to prior periods.
(D) Includes contingent interest received during the six months ended June 30, 1995.
(E) See Note B to the financial statements.
(F) Represents five monthly payments.
</TABLE>
General
The determination as to whether it is in the best interest of the Partnership
to enter into forbearance agreements on the FMBs or, alternatively, to pursue
its remedies under the loan documents, including foreclosures, is based upon
several factors. These factors include, but are not limited to, property
performance, owner cooperation and projected legal costs.
From time to time, certain property owners have elected to supplement the
cash flow generated by the properties to meet the required FMB interest
payments. There can be no assurance that in the future any property owner will
elect to supplement property cash flow to satisfy FMB interest requirements, if
necessary. The owner of the Highland Ridge property supplemented cash flow
generated by the respective properties to meet its interest payments during the
six months ended June 30, 1995. The owner of the Sunset Downs and Loveridge
properties supplemented the cash flow generated by the respective properties to
meet their interest payments during the first two months of 1995. (See Note B to
the financial statements for further discussion).
10
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings--Incorporated by reference to Note D to the financial
statements filed herewith in Item 1 of Part I of the Registrant's
Quarterly Report.
Item 2. Changes in Securities--None
Item 3. Defaults Upon Senior Securities--None
Item 4. Submission of Matters to a Vote of Security Holders--None
Item 5. Other Information--None
Item 6. Exhibits and Reports on Form 8-K--
(a) Exhibits:
4(a)--Partnership Agreement, incorporated by reference to Exhibit A
to the Prospectus of Registrant, dated July 7, 1986, filed
pursuant to Rule 424(b) under the Securities Act of 1933, File
No. 33-5213
4(b)--Certificate of Limited Partnership, incorporated by
reference to Exhibit 4 to Amendment No.1 to Registration
Statement on Form S-11. File No. 33-5213
27--Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K--No reports on Form 8-K were filed during the
quarter.
11
<PAGE>
<PAGE>
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.
SUMMIT TAX EXEMPT L.P. II
By: Prudential-Bache Properties, Inc.
A Delaware corporation, General Partner
By: /s/ Robert J. Alexander Date: August 11, 1995
----------------------------------------
Robert J. Alexander
Vice President and Chief Accounting
Officer
By: Related Tax Exempt Associates II, Inc.
A Delaware corporation, General Partner
By: /s/ Alan P. Hirmes Date: August 11, 1995
----------------------------------------
Alan P. Hirmes
Vice President
12
<PAGE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial
information extracted from the financial
statements for Summit Tax Exempt LP II
and is qualified in its entirety by reference
to such financial statements
</LEGEND>
<RESTATED>
<CIK> 0000792924
<NAME> Summit Tax Exempt LP II
<MULTIPLIER> 1
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> Jun-30-1995
<PERIOD-TYPE> 6-Mos
<CASH> 85,019
<SECURITIES> 3,692,034
<RECEIVABLES> 162,187,873
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 165,964,926
<CURRENT-LIABILITIES> 939,285
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 165,025,641
<TOTAL-LIABILITY-AND-EQUITY> 165,964,926
<SALES> 5,938,669
<TOTAL-REVENUES> 5,938,669
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 886,271
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 5,052,398
<INCOME-TAX> 5,052,398
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,052,398
<EPS-PRIMARY> .54
<EPS-DILUTED> 0
</TABLE>
