SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 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 No. 0-16456
Berry and Boyle Development Partners II
(A Massachusetts Limited Partnership)
(Exact name of registrant as specified in its charter)
Massachusetts 04-2946004
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
57 River Street, Wellesley Hills, MA 02181
(Address of principal executive offices) (Zip Code)
(617) 237-0544
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 and 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 ___
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
<PAGE>
<TABLE>
BERRY AND BOYLE DEVELOPMENT PARTNERS II
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
---------------
ASSETS
September 30,
1995 December 31,
(Unaudited) 1994
Property, at cost (Notes 2, 3, 5, and 6):
<S> <C> <C>
Land $5,148,247 $5,148,247
Buildings and improvements 15,989,689 15,989,689
Equipment, furnishings and fixtures 1,909,476 1,588,836
23,047,412 22,726,772
Less accumulated depreciation (4,244,324) (3,934,660)
18,803,088 18,792,112
Cash and cash equivalents (Notes 2 and 4) 425,220 193,329
Short-term investments (Note 2) 247,975 848,098
Deposits and prepaid expenses 2,472 3,887
Accounts and interest receivable 350 483
Investment in partnership (Notes 2 and 6) 1,443,598 1,516,413
Deferred costs 424 24,853
Deferred expenses, net of accumulated
amortization of $487,630 and $472,,155 (Note 2) 39,542 55,017
Total assets $20,962,669 $21,434,192
LIABILITIES AND PARTNERS' EQUITY
Mortgage notes payable (Note 7) 10,015,390 10,083,673
Accounts payable and accrued expenses 217,695 199,308
Due to affiliates (Note 9) 8,954 11,608
Rents received in advance - 4,988
Tenant security deposits 65,605 66,036
Total liabilities 10,307,644 10,365,613
Minority Interest (Note 5) 738,360 706,420
Partners' equity (Note 8) 9,916,665 10,362,159
Total liabilities and partners' equity $20,962,669 $21,434,192
<PAGE>
BERRY AND BOYLE DEVELOPMENT PARTNERS II
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
-------------
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
---- ---- ---- ----
Revenue:
<S> <C> <C> <C> <C>
Rental income $653,695 $639,685 $1,954,737 $1,881,660
Interest income 7,816 8,739 31,363 26,100
Other income 15,822 21,847 43,942 63,287
Total revenue 677,333 670,271 2,030,042 1,971,047
Expenses:
General and administrative (Note 9) 47,387 35,994 147,441 118,689
Operations 392,603 302,452 971,038 839,421
Depreciation and amortization 107,336 112,829 325,139 330,237
Interest 246,409 248,697 740,898 747,597
Equity in loss (income) from
partnership (Note 6) 18,876 3,540 10,002 4,232
Total expenses 812,611 703,512 2,194,518 2,040,176
Net income (loss) before minority interest (135,278) (33,241) (164,476) (69,129)
Minority interests' equity in
subsidiary (income) loss (Note 5) 5,165 (925) 1,864 2,721
Net income (loss) ($130,113) ($34,166) ($162,612) ($66,408)
Net income (loss) allocated to:
General Partners (1,301) (342) (1,626) (664)
Per unit of Investor Limited
Partner interest:
36,963 units issued (3.48) (0.92) (4.36) (1.78)
<PAGE>
BERRY AND BOYLE DEVELOPMENT PARTNERS II
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
-------------
Investor Total
General Limited Partners'
Partners Partners Equity
<S> <C> <C> <C>
Balance at December 31, 1993 (59,083) 11,013,624 $10,954,541
Cash distributions (10,184) (499,000) (509,184)
Net loss (832) (82,366) (83,198)
Balance at December 31, 1994 (70,099) 10,432,258 10,362,159
Cash distributions (5,658) (277,224) (282,882)
Net income (loss) (1,626) (160,986) (162,612)
Balance at September 30,1995 ($77,383) $9,994,048 $9,916,665
<PAGE>
BERRY AND BOYLE DEVELOPMENT PARTNERS II
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (decrease) in cash and cash equivalents
(Unaudited)
-------------
Nine Months Ended
September 30,
1995 1994
---- ----
Cash flows from operating activities:
<S> <C> <C>
Interest received $33,348 $30,791
Cash received from rents 1,949,318 1,870,808
Cash received from other income 43,942 63,287
Administrative expenses (150,373) (146,844)
Rental operations expenses (969,131) (814,899)
Interest paid (722,562) (747,849)
Net cash provided by operating activities 184,542 255,294
Cash flows from investing activities:
Purchase of fixed assets (320,640) (28,744)
Deferred costs 24,429 -
Cash received from short-term investments 598,138 325,281
Distributions received from partnership 62,812 84,260
Net cash provided (used) by investing activities 364,739 380,797
Cash flows from financing activities:
Distributions to partners (282,882) (414,892)
Deposits (28) (64)
Contributions from the minority interest 49,292 7,262
Principal payments on mortgage notes payable (68,283) (61,092)
Distributions to the minority interest (15,489) (8,667)
Net cash provided (used) by financing activities (317,390) (477,453)
Net increase (decrease) in cash and cash equivalents 231,891 158,638
Cash and cash equivalents at beginning of period 193,329 185,083
Cash and cash equivalents at end of period $425,220 $343,721
<PAGE>
BERRY AND BOYLE DEVELOPMENT PARTNERS II
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (decrease) in cash and cash equivalents
(Unaudited)
-------------
Reconciliation of net income (loss) to net cash provided by operating
activities:
Nine Months Ended
September 30,
1995 1994
---- ----
Net income (loss) ($162,612) ($66,408)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 325,139 330,237
Equity in (income) loss from partnership 10,002 4,232
Minority interests' equity in subsidiary income (loss) (1,864) (2,721)
Change in assets and liabilities net of effects from investing and financing
activities:
Decrease (increase) in accounts and interest receivable 2,118 (2,819)
Decrease (increase) in deposits and prepaid expenses 1,415 -
Increase (decrease) in accounts
payable and accrued expenses 18,417 22,421
Increase (decrease) in due to affiliates (2,654) (19,266)
Increase (decrease) in rent received in advance (431) (5,468)
Increase (decrease) in tenant security deposits (4,988) (4,914)
Net cash provided by operating activities $184,542 $255,294
</TABLE>
<PAGE>
BERRY AND BOYLE DEVELOPMENT PARTNERS II
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------
1. Organization of Partnership:
Berry and Boyle Development Partners II (A Massachusetts Limited Partnership)
(the "Partnership") was formed on January 9, 1987. Berry and Boyle Management, a
California Limited Partnership, ("Management"), Richard G. Berry and Stephen B.
Boyle are the General Partners. Except under certain limited circumstances upon
termination of the Partnership, the General Partners are not required to make
any additional capital contributions. The General Partners or their affiliates
will receive various fees for services and reimbursement for various
organizational and selling costs incurred on behalf of the Partnership.
The Partnership issued all of the Original Limited Partnership Interests to
Stephen B. Boyle in exchange for a capital contribution of $100. At the time of
the original admission of Limited Partners, the Original Limited Partner ceased
to be a Limited Partner.
On February 13, 1987 the Securities and Exchange Commission declared the
Partnership's public offering (the "Prospectus") of up to 60,000 units of
Limited Partnership Interests at $500 per unit (the "Units") effective and the
marketing and sale of the Units commenced shortly thereafter. The initial
closing of the offering took place on June 30, 1987 at which time the holders of
5,231 Units were admitted to the Partnership. The Partnership continued to admit
subscribers monthly thereafter until August 10, 1988 when it terminated the
offering having admitted 1,918 investors acquiring 36,963 Units totaling
$18,481,500. There were 1,925 investors at September 30, 1995.
The accompanying consolidated financial statements present the activity of the
Partnership for the nine months ended September 30, 1995 and 1994.
The Partnership will continue until December 31, 2010, unless earlier terminated
by the sale of all, or substantially all, of the assets of the Partnership, by
the dissolution and liquidation of the joint ventures or as otherwise provided
in the Partnership Agreement.
2. Significant Accounting Policies:
A. Basis of Presentation
The consolidated financial statements include the accounts of the
Partnership and its subsidiaries: The Pines on Cheyenne Creek Joint
Venture, Mariposa Joint Venture and Canyon View East Joint Venture. All
intercompany accounts and transactions have been eliminated in
consolidation. The Partnership accounts for its investment in Casabella
Associates utilizing the equity method of accounting. The Partnership's
investment account is adjusted to reflect its pro rata share of
profits, losses and distributions from Casabella Associates.
The Partnership follows the accrual basis of accounting.
B. Cash and Cash Equivalents
The Partnership considers all highly liquid debt instruments purchased
with a maturity of three months or less to be cash equivalents.
C. Depreciation
Depreciation is provided for by the use of the straight-line method
over estimated useful lives as follows:
Buildings and improvements 40 years
Equipment, furnishings and fixtures 5 years
D. Deferred Expenses
Costs of obtaining the mortgages on the properties are being amortized
over the term of the related mortgage notes payable using the
straight-line method. Buy down fees relating to permanent loan
refinancings (see Note 7) are being amortized over a three year period.
E. Offering Costs
Costs in connection with the offering of Units were charged to Limited
Partners' equity upon the sale of the related Units.
F. Income Taxes
The Partnership is not liable for Federal or state income taxes because
Partnership income or loss is allocated to the Partners for income tax
purposes. If the Partnership's tax returns are examined by the Internal
Revenue Service or state taxing authority and such an examination
results in a change in Partnership taxable income (loss), such change
will be reported to the Partners.
G. Rental Income
Leases require the payment of rent in advance, however, rental income
is recorded as earned.
<PAGE>
<TABLE>
3. Property:
Property, at cost, consisted of the following at September 30, 1995:
Initial Cost Costs Capitalized
to Partnership Subsequent to Acquisition
Buildings Equipment, Buildings Equipment,
Property and Furnishings and Furnishings
Description Land Improv. & Fixtures Improv. & Fixtures
The Pines on Cheyenne Creek,
a 108-unit residential
rental complex located in
<S> <C> <C> <C> <C> <C>
Colorado Springs, Colorado $1,865,535 $6,105,495 $657,307 $47,529 $331,071
Mariposa, an 84-unit
residential rental
complex located in
Scottsdale, Arizona 1,428,347 3,979,992 375,165 11,153 16,013
Canyon View East, a 96-unit
residential rental
complex located in
Tucson, Arizona 1,844,761 5,801,389 500,895 44,131 29,025
$5,138,643 $15,886,876 $1,533,367 $102,813 $376,109
Depreciation expense for the nine months ended September 30, 1995 and 1994 and accumulated depreciation
at September 30, 1995 and December 31, 1994 consisted of the following:
Accumulated
Depreciation
Depreciation June 30, December 31,
Expense
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Buildings and improvements $299,806 $299,613 $2,683,144 $2,383,338
Equipment, furnishings and fixtures 9,858 15,150 1,561,180 1,551,322
$309,664 $314,763 $4,244,324 $3,934,660
Each of the properties is encumbered by a nonrecourse mortgage note payable (see Note 7).
3. Property:
Property, at cost, consisted of the following at September 30, 1995:
Amount at Which carried
at Close of Period
Buildings Equipment,
Property and Furnishings Accumulated
Description Land Improv. & Fixtures Total Depreciation
The Pines on Cheyenne Creek,
a 108-unit residential
rental complex located in
<S> <C> <C> <C> <C> <C>
Colorado Springs, Colorado $1,865,535 $6,153,024 $988,378 $9,006,937 $1,740,705
Mariposa, an 84-unit
residential rental
complex located in
Scottsdale, Arizona 1,428,347 3,991,145 391,178 5,810,670 1,038,046
Canyon View East, a 96-unit
residential rental
complex located in
Tucson, Arizona 1,854,365 5,845,520 529,920 8,229,805 1,465,573
$5,148,247 $15,989,689 $1,909,476 $23,047,412 $4,244,324
</TABLE>
4. Cash and Cash Equivalents:
Cash and cash equivalents at September 30, 1995 and December 31, 1994 consisted
of the following:
September 30, December 31,
1995 1994
Cash on hand ....................... $ 63,904 $ 20,514
Money market accounts .............. 361,316 172,815
--------- ---------
$ 425,220 $ 193,329
5. Joint Venture and Property Acquisitions:
The Pines
On September 26, 1988, the Partnership and a limited partnership affiliated with
the General Partners (the "Affiliated Partnership") acquired The Pines, a
108-unit residential property located in Colorado Springs, Colorado and
simultaneously contributed the property to a joint venture comprised of the
Partnership, the Affiliated Partnership and the property developer. The
Partnership owns a majority interest in the joint venture and, therefore, the
accounts and operations of the joint venture have been consolidated into those
of the Partnership. The Partnership and the Affiliated Partnership have been
designated the co-managing joint venture partners of the joint venture and will
have control over all decisions affecting the joint venture and the property.
In accordance with the terms of the purchase agreement joint venture agreement,
through September 30, 1995, the Partnership has contributed $5,065,101 to the
joint venture ($218,020 of which was contributed in 1995), which was used to:
(1) repay a portion of the construction loan from a third party lender, (2)
cover operating deficits incurred during the lease up period, (3) fund $470,870
of property acquisition costs and (4) pay certain costs associated with the
refinancing of the permanent loan.
Net cash from operations (as defined in the joint venture agreement) is to be
distributed as available to each joint venture partner quarterly as follows:
First, to the Partnership and the Affiliated Partnership,
proportionately, an amount equal to 11.25% per annum, noncumulative
(computed daily on a simple noncompounded basis from the date of
completion funding) of their respective capital investment (as defined
in the joint venture agreement);
Second, the balance 65.25% to the Partnership, 14.75% to the Affiliated
Partnership, and 20% to the property developer.
All losses from operations and depreciation for the joint venture are allocated
81.56% to the Partnership and 18.44% to the Affiliated Partnership, in
proportion to their respective joint venture interest.
All profits from operations to the extent of cash distributions shall first be
allocated to the Partnership, the Affiliated Partnership, and the property
developer in the same proportion as the cash distributions. Any remaining
profits are allocated 65.25% to the Partnership, 14.75% to the Affiliated
Partnership, and 20% to the property developer.
In the case of certain capital transactions and distributions as defined in the
joint venture agreement, the allocation of related profits, losses and cash
distributions, if any, would be different than as described above and would be
effected by the relative balances in the individual partners' capital accounts.
Mariposa
On February 3, 1989, the Partnership acquired a joint venture interest in the
Mariposa Joint Venture which owns and operates an 84-unit residential property
located in Scottsdale, Arizona known as Mariposa. Since the Partnership owns a
majority interest in the joint venture, the accounts and operations of the joint
venture have been consolidated into those of the Partnership. The Partnership
has been designated the managing joint venture partner of the joint venture and
will have control over all decisions affecting the joint venture and the
property.
In accordance with the terms of the purchase agreement and the joint venture
agreement, through September 30, 1995, the Partnership has contributed
$3,138,028 to the joint venture ($14,035 of which was contributed in 1995),
which was used to: (1) repay a portion of the construction loan from a third
party lender, (2) cover operating deficits incurred during the lease up period,
(3) pay for certain capital improvements, (4) fund $430,474 of property
acquisition costs and (5) pay certain costs associated with the refinancing of
the permanent loan.
Net cash from operations (as defined in the joint venture agreement) is to be
distributed, as available, to each joint venture partner, not less often than
quarterly, as follows:
First, to the Partnership an amount equal to 10.6% per annum,
noncumulative (computed daily on a simple noncompounded basis from the
date of completion funding) of the Partnership's capital investment (as
defined in the joint venture agreement);
Second, the balance 70% to the Partnership and 30% to the other joint
venture partner.
All losses from operations and depreciation for the joint venture are allocated
99.5% to the Partnership and 0.5% to the other joint venture partner.
All profits from operations shall be allocated to each joint venture partner pro
rata in accordance with the distribution of net cash from operations for such
fiscal year.
In the case of certain capital transactions and distributions as defined in the
joint venture agreement, the allocation of related profits, losses and cash
distributions, if any, would be different than as described above and would be
effected by the relative balances in the individual partners' capital accounts.
Canyon View East
On March 8, 1989, the Partnership acquired an interest in the Canyon View East
Joint Venture which owns and operates a 96-unit residential property located in
Tucson, Arizona known as Canyon View East. Since the Partnership owns a majority
interest in the joint venture, the accounts and operations of the joint venture
have been consolidated into those of the Partnership. The Partnership has been
designated the managing joint venture partner of the joint venture and will have
control over all decisions affecting the joint venture and the property.
In accordance with the terms of the purchase agreement and the joint venture
agreement, the Partnership has contributed $4,783,612 to the joint venture
through September 30, 1995, which was used to: (1) repay a portion of the
construction loan from a third party lender, (2) cover operating deficits
incurred during the lease up period, (3) fund $523,022 of property acquisition
costs and (5) pay certain costs associated with the permanent loan refinancing.
Net cash from operations (as defined in the joint venture agreement) is to be
distributed, as available, to each joint venture partner, not less often than
quarterly, as follows:
First, to the Partnership an amount equal to 11.25% per annum,
noncumulative (computed daily on a simple noncompounded basis from the
date of completion funding) of the Partnership's capital investment (as
defined in the joint venture agreement);
Second, the balance 75% to the Partnership and 25% to the other joint
venture partners.
All losses from operations and depreciation for the joint venture are allocated
100% to the Partnership.
All profits from operations shall be allocated to each joint venture partner in
accordance with, and to the extent of, the distribution of net cash from
operations. Any excess profits shall be allocated 100% to the Partnership.
In the case of certain capital transactions and distributions as defined in the
joint venture agreement, the allocation of related profits, losses and cash
distributions, if any, would be different than as described above and would be
effected by the relative balances in the individual partners' capital accounts.
6. Investment in Partnership:
On September 28, 1990, the Partnership contributed $1,800,000 to purchase an
approximate 38% interest in Casabella Associates, a general partnership between
the Partnership, Berry and Boyle Development Partners (A Massachusetts Limited
Partnership) ("DPI") and Berry and Boyle Development Partners III (A
Massachusetts Limited Partnership) ("DPIII"). In addition to its contribution
referred to above, the Partnership incurred $268,861 of acquisition costs,
including $186,300 in acquisition fees paid to the General Partners.
On September 28, 1990, Casabella Associates purchased a majority interest in the
Casabella I Joint Venture, an Arizona joint venture that owned and operated
Casabella Phase I, a 61-unit residential property located in Scottsdale,
Arizona. On April 23, 1991, Casabella Associates, acquired a majority interest
in the Casabella Joint Venture which owns Casabella Phase II, a 93-unit
residential community, located adjacent to Casabella Phase I. On that date,
Casabella Associates and EW Casabella I Limited Partnership contributed their
interests in the Casabella I Joint Venture to the Casabella Joint Venture. In
addition, the permanent lender funded a $7,320,000 permanent loan, the proceeds
of which were used to refinance the $2,700,000 loan pertaining to Phase I and,
together with cash contributions of Casabella Associates, repay the construction
loan for Phase II. As a result of such transactions, by operation of law,
Casabella Joint Venture, which is comprised of Casabella Associates and EW
Casabella I Limited Partnership, now owns both Phases I and II of Casabella.
Casabella is now managed and operated as one single 154-unit residential
community.
On June 30, 1992, Casabella Joint Venture refinanced its original $7,320,000
permanent loan using the proceeds of a new first mortgage loan in the amount of
$7,300,000. Under the terms of the new note, monthly principal and interest
payments of $61,887, based on a fixed interest rate of 9.125%, are required over
the term of the loan. The balance of the note will be due on July 15, 1997. The
costs associated with this refinancing totaled $112,117 and were funded by
Casabella Associates.
<PAGE>
7. Mortgage Notes Payable:
All of the property owned by the Partnership is pledged as collateral for the
mortgage notes payable outstanding at September 30, 1995 and December 31, 1994
which consisted of the following:
September 30, December 31,
1995 1994
The Pines .......................... $ 3,197,328 $ 3,218,558
Mariposa ........................... 2,888,343 2,908,154
Canyon View East ................... 3,929,719 3,956,961
----------- -----------
$10,015,390 $10,083,673
On September 14, 1990, the Pines on Cheyenne Creek Joint Venture refinanced its
$3,200,000 permanent loan together with deferred interest utilizing the proceeds
of a new first mortgage loan in the amount of $3,252,000. Under the terms of the
new $3,252,000 note, monthly payments of $29,076 including principal and
interest, at the rate 10%, are be payable. The balance of the note is payable on
September 15, 1997.
On September 13 and 14, 1990 the Canyon View East and Mariposa Joint Ventures
refinanced their respective $4,000,000 and $2,940,000 original permanent loans.
Under the terms of the new $4,000,000 and $2,940,000 notes, monthly payments of
principal and interest, at the rate of 9.75%, or $35,047 and $25,759,
respectively are payable. The balance of the notes are payable on September 15,
1997.
Accrued interest at September 30, 1995 and December 31, 1994 consisted of the
following:
September 30, December 31,
1995 1994
The Pines .............................. $ 13,322 $ 13,410
Mariposa ............................... 11,734 11,814
Canyon View East ....................... 15,964 16,074
-------- --------
$ 41,020 $ 41,298
======== ========
The aggregate principal amounts of long term borrowings due during the calendar
years 1995 through 1997, respectively, are as follows, $91,480, $100,886 and
$9,890,788.
8. Partners' Equity:
Under the terms of the Partnership Agreement profits are allocated 98% to the
Limited Partners and 2% to the General Partners; losses are allocated 99% to the
Limited Partners and 1% to the General Partners.
Cash distributions to the partners are governed by the Partnership Agreement and
are made, to the extent available, 98% to the Limited Partners and 2% to the
General Partners.
The allocation of the related profits, losses, and distributions, if any, would
be different than described above in the case of certain events as defined in
the Partnership Agreement, such as the sale of an investment property or an
interest in a joint venture partnership.
9. Related Party Transactions:
For the nine months ended September 30, 1995 and 1994, general and
administrative expenses included $55,963 and $50,412, respectively, of salary
reimbursements paid to the General Partners for certain administrative and
accounting personnel who performed services for the Partnership.
The officers and principal shareholders of Evans Withycombe, Inc., the developer
and property manager of Mariposa, together hold a two and one half percent
cumulative profit or partnership voting interest in Berry and Boyle. During the
nine months ended September 30, 1995 and 1994, $28,508 and $27,204,
respectively, of property management fees were paid or accrued to Evans
Withycombe, Inc.
Berry and Boyle Residential Services, the property manager of The Pines and
Canyon View East, is an affiliate of the General Partners of the Partnership.
During the nine months ended September 30, 1995 and 1994, $71,464 and $69,686,
respectively, of property management fees had been paid or accrued to
Residential Services.
<PAGE>
-17-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity; Capital Resources
In connection with its capitalization, the Partnership admitted 1,918 investors
who purchased a total of 36,963 Units aggregating $18,481,500. These offering
proceeds, net of organizational and offering costs of $2,772,225, provided
$15,709,275 of net proceeds to be used for the purchase of income-producing
residential properties, including related fees and expenses, and working capital
reserves. The Partnership has expended $14,689,033 to (i) acquire its interest
in The Pines, Mariposa, Canyon View East and Casabella joint ventures, (ii) to
pay acquisition expenses, including acquisition fees to the General Partners,
(iii) pay costs associated with the refinancing of the permanent loans for The
Pines, Mariposa and Canyon View East and (iv) to cover operating deficits
incurred during the initial lease up period. The remaining net proceeds of
$1,020,242 will be used to establish working capital reserves sufficient to meet
the future needs of the Partnership, including contributions that may be
required at the various joint ventures, as determined by the General Partners.
As of September 30, 1995, $425,488 cumulatively was contributed to the joint
ventures for this purpose ($232,055 of which was contributed in 1995).
The working capital reserves of the Partnership consisted of cash and cash
equivalents and short-term investments. Together these amounts provide the
Partnership with the necessary liquidity to carry on its day-to-day operations
and to make necessary contributions to the various joint ventures. Thus far in
1995, the aggregate net decrease in working capital reserves was $368,232. The
decrease resulted primarily from cash provided by operations of $184,542,
distributions from Casabella Associates of $62,812, and contributions from the
minority interest of $49,292, offset by $320,640 of fixed asset purchases,
distributions to partners of $282,882, principal payments on mortgage notes
payable of $68,283 and distributions to the minority interest of $15,489.
Property Status
The Pines
As of September 30, 1995, the property was 96% occupied, compared to 92%
approximately one year ago. At September 30, 1995 and 1994, the market rents for
the various unit types were as follows:
Unit Type 1995 1994
--------- ---- ----
One bedroom den .............................. $775 $775
Two bedroom two bath ......................... 875 875
Mariposa
The property was 95% occupied as of September 30, 1995, compared to 87%
approximately one year ago. At September 30, 1995 and 1994, the market rents for
the various unit types were as follows:
Unit Type 1995 1994
--------- ---- ----
One bedroom one bath ......................... $ 705 $ 675
Two bedroom two bath ......................... 845 815
Two bedroom two bath den ..................... 1,045 1,015
Canyon View East
The property was 86% occupied as of September 30, 1995, compared to 93%
approximately one year ago. At September 30, 1995 and 1994, the market rents for
the various unit types were as follows:
Unit Type 1995 1994
--------- ---- ----
Two bedroom two bath ............................. $865 $822
Two bedroom two bath w/den ....................... 980 945
Three bedroom two bath ........................... 980 954
Casabella
As of September 30, 1995, the property was 90% occupied, compared to 88%
approximately one year ago. At September 30, 1995 and 1994, the average monthly
rents collected for the various unit types were as follows:
Unit Type 1995 1994
--------- ---- ----
One bedroom two bath w/den ................... $ 805 $ 775
Two bedroom two bath ......................... 930 895
Two bedroom two bath w/den ................... 1,136 1,068
Results of Operations
The Partnership's operating results for the three months ended September 30,
1995 consisted of interest earned on short-term investments of $6,543,
administrative expenses of $41,987, the Partnership's share of the loss from
Casabella Associates of $18,876 and its share of the losses allocated from the
joint ventures, as follows:
Canyon The
View East Pines Mariposa
Revenue .............................. $ 220,988 259,520 $ 189,304
Expenses:
General and administrative ......... 1,800 1,800 1,800
Operations ......................... 121,171 164,393 107,039
Depreciation and amortization ...... 39,213 41,314 26,809
Interest ........................... 95,900 80,023 70,486
258,084 287,530 206,134
Net income (loss) .................... ($ 37,096) ($ 28,010) ($ 16,830)
The Partnership's operating results for the three months ended September 30,
1994 consisted of interest earned on short-term investments of $8,370,
administrative expenses of $30,964, the Partnership's share of the loss from
Casabella Associates of $3,540 and its share of the losses allocated from the
joint ventures, as follows:
Canyon The
View East Pines Mariposa
Revenue ............................. $ 229,809 250,393 $ 181,699
Expenses:
General and administrative ........ 1,676 1,677 1,677
Operations ........................ 104,904 122,506 75,042
Depreciation and amortization ..... 44,191 40,436 28,202
Interest .......................... 96,822 80,760 71,115
247,593 245,379 176,036
Net income (loss) ................... ($ 17,784) $ 5,014 $ 5,663
The Partnership's operating results for the nine months ended September 30, 1995
consisted of interest earned on short-term investments of $28,998,
administrative expenses of $131,591, the Partnership's share of the income from
Casabella Associates of $10,002 and its share of the losses allocated from the
joint ventures, as follows:
Canyon The
View East Pines Mariposa
Revenue .............................. $ 678,836 750,147 $ 571,083
Expenses:
General and administrative ......... 5,144 5,306 5,400
Operations ......................... 302,914 390,409 277,715
Depreciation and amortization ...... 117,640 123,942 83,557
Interest ........................... 288,358 240,597 211,943
714,056 760,254 578,615
Net income (loss) .................... ($ 35,220) ($ 10,107) ($ 7,532)
The Partnership's operating results for the nine months ended September 30, 1994
consisted of interest earned on short-term investments of $24,784,
administrative expenses of $103,948, the Partnership's share of the loss from
Casabella Associates of $4,232 and its share of the losses allocated from the
joint ventures, as follows:
Canyon The
View East Pines Mariposa
Revenue ............................. $ 709,282 693,755 $ 543,226
Expenses:
General and administrative ........ 4,977 4,733 5,031
Operations ........................ 274,685 347,933 216,803
Depreciation and amortization ..... 132,535 113,094 84,608
Interest .......................... 291,060 242,753 213,784
703,257 708,513 520,226
Net income (loss) ................... $ 6,025 ($ 14,758) $ 23,000
Comparison of Operating Results for the Nine Months Ended September 30, 1995 and
1994:
Interest income increased 20% over the prior period as a result of higher
interest rates on the Partnership's short term investments. General and
administrative expenses increased 24% due to increased legal expense and
printing and mailing expense. Operating expenses increased 16% as a result of
increases in repairs and maintenance, salaries and wages, and advertising and
promotion.
Thus far in 1995, the Partnership has made the following cash distributions to
its Partners:
Feb. 15 May 15 Aug. 15 Total
------- ------ ----- -----
Limited Partners ....... $ 92,408 $ 92,408 $ 92,408 $277,224
General Partners ....... 1,886 1,886 1,886 5,658
-------- -------- -------- --------
$ 94,294 $ 94,294 $ 94,294 $282,882
======== ======== ======== ========
<PAGE>
PART II - OTHER INFORMATION
-----------------
ITEM 1. Legal Proceedings
Response: None
ITEM 2. Changes in Securities
Response: None
ITEM 3. Defaults Upon Senior Securities
Response: None
ITEM 4. Submission of Matters to a Vote of Security Holders
Response: None
ITEM 5. Other Information
Response: None
ITEM 6. Exhibits and Reports on Form 8-K
Response: 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.
BERRY AND BOYLE DEVELOPMENT PARTNERS II
(A Massachusetts Limited Partnership)
(Registrant)
BY: BERRY AND BOYLE MANAGEMENT
A General Partner
BY: BERRY AND BOYLE INC.
A General Partner
BY:
James E. Glynn, Treasurer
Date: November 13, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> Dec-31-1994
<PERIOD-END> Sep-30-1995
<CASH> 425,220
<SECURITIES> 247,975
<RECEIVABLES> 350
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 23,047,412
<DEPRECIATION> 4,244,324
<TOTAL-ASSETS> 20,962,669
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 10,655,025
<TOTAL-LIABILITY-AND-EQUITY> 20,962,669
<SALES> 0
<TOTAL-REVENUES> 2,030,042
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,455,484
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 740,898
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 162,612
<EPS-PRIMARY> 0.000
<EPS-DILUTED> 0.000
</TABLE>
