<PAGE>
Exhibit 99
DiVall Insured Income Properties 2, L.P.
QUARTERLY NEWS
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A publication of The Provo Group, Inc. THIRD QUARTER 2000
Preparing for Liquidation
As we reported to you earlier this year, we plan to put the DiVall 2 portfolio
up for sale next year. We plan to have updated appraisals completed by the end
of January. We will then adjust the sale price accordingly and begin the sealed
bid process during the 2/nd/ Quarter. This will give us plenty of time to market
the portfolio. We would anticipate closing the sale during the 3/rd/ Quarter and
then distributing all proceeds and winding up the Partnership by year-end.
In an effort to make this liquidation "neat and clean" we have re-evaluated all
the properties. This Partnership did have one "problem" property. The Denny's
Restaurant located on Camelback Road was vacant. Additionally, this property had
a Ground Lease. (This means the Tenant paid rent to us for the building and we
paid rent to another landlord, the Ground Lessor). Therefore, not only were we
not collecting rent on this property, we were liable for the ground rent and we
were liable for all real estate taxes. The Ground Lease did not expire for
another 2 years and we knew this property would be difficult to release unless
the ground lessor participated in an extension. However, the ground lessor had
already disclosed that he wanted the property back after the two years..
Therefore, we negotiated to terminate the Ground Lease early for a fee of
$90,000. Please keep in mind, the ground rent alone was $60,000 annually.
Additionally, we would have been responsible for $20,000 per year in real estate
taxes. It is unfortunate we had to pay out this amount in a lump sum, however it
will definitely save us money in the long run. We effectively "bought out" our
$160,000 liability for $90,000. This will help our 2001 cash flow by $80,000.
We feel all the other properties are stable. We have no other vacancies and few
delinquencies. We feel this is a well balanced portfolio and would be considered
a desirable purchase. We will keep you updated on our liquidation efforts during
the next Quarter.
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Distribution Highlights
. 8.49% (approx.) annualized return from operations based on $23,550,000
(estimated net asset value as of December 31, 1999).
. $500,000 total amount distributed for the Third Quarter 2000 which was
$75,000 lower than originally budgeted.
. $10.80 per unit (approx.) for the Third Quarter 2000.
. $1,043.00 to $845.00 range of distributions per unit from the first unit
sold to the last unit sold before the offering closed (February 1990),
respectively. (NOTE: Distributions are from both cash flow from operations
and "net" cash activity from financing and investing activities.)
<PAGE>
Page 2 DiVall 2 3 Q 00
Statements of Income and Cash Flow Highlights
. 9% increase in "total" operating revenues from projections.
. The increase in revenues is almost entirely due to accrual of percentage
rents for tenants who have reached their breakpoint for the year.
. If not for the termination of the Denny's (Camelback Road) Lease, the
expenses would have decreased by 13%. However, there was an increase in
expenses due to the $90,000 termination fee which was not originally
budgeted. A $143,000 loss on disposition of assets was also recorded to
write-off the balance of the building which was surrendered to the ground
lessor upon termination of the lease. This is a non-cash item.
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Property Highlights
. Mulberry Street Grill (Formerly Mr. Munchies, Phoenix, AZ) was delinquent
at September 30, 2000 in the amount of $8,000. This is a decrease in the
original balance due, which was over $15,000. This tenant has been making
catch-up payments and we fully anticipate the balance to be paid by
November 30, 2000. "Season" is coming in the Phoenix area.
. Denny's (Camelback Road) - This Lease was terminated effective June 30,
2000. Please see cover article for more information.
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For questions or additional information, please contact Investor Relations at:
1-800-547-7686 or 1-816-421-7444
All written inquiries may be mailed or faxed to:
The Provo Group, Inc.
101 West 11th Street, Suite 1110
Kansas City, Missouri 64105
(FAX 816-221-2130)
E-Mail: [email protected]
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<PAGE>
<TABLE>
<CAPTION>
DIVALL INSURED INCOME PROPERTIES 2 L.P.
STATEMENTS OF INCOME AND CASH FLOW CHANGES
FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2000
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PROJECTED ACTUAL VARIANCE
-----------------------------------------------
3RD 3RD
QUARTER QUARTER BETTER
OPERATING REVENUES 9/30/00 9/30/00 (WORSE)
------------- ------------- -----------
<S> <C> <C> <C>
Rental income $ 695,536 $ 758,090 $ 62,554
Interest income 13,600 15,558 1,958
Other income 0 1,446 1,446
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TOTAL OPERATING REVENUES $ 709,136 $ 775,094 $ 65,958
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OPERATING EXPENSES
Insurance $ 4,317 $ 4,404 $ (87)
Management fees 46,872 46,909 (37)
Overhead allowance 3,783 3,789 (6)
Advisory Board 3,700 2,188 1,512
Administrative 20,028 10,354 9,674
Professional services 7,100 5,520 1,580
Auditing 12,000 12,800 (800)
Legal 4,500 2,102 2,398
Ground lease termination fee 0 90,000 (90,000)
Loss on disposition of assets 0 142,591 (142,591)
Defaulted tenants 900 740 160
------------- ------------- -----------
TOTAL OPERATING EXPENSES $ 103,200 $ 321,397 $(218,197)
------------- ------------- -----------
GROUND RENT $ 31,650 $ 16,511 $ 15,139
------------- ------------- -----------
INVESTIGATION AND RESTORATION EXPENSES $ 0 $ 56 (56)
------------- ------------- -----------
NON-OPERATING EXPENSES
Depreciation $ 88,098 $ 88,098 0
Amortization 2,364 2,757 (393)
------------- ------------- -----------
TOTAL NON-OPERATING EXPENSES $ 90,462 $ 90,855 $ (393)
------------- ------------- -----------
TOTAL EXPENSES $ 225,312 $ 428,819 $(203,507)
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NET INCOME (LOSS) $ 483,824 $ 346,275 $(137,549)
OPERATING CASH RECONCILIATION: VARIANCE
-----------
Depreciation and amortization 90,462 90,855 393
Recovery of amounts previously written off 0 (1,391) (1,391)
Loss on disposition of assets 0 142,591 142,591
(Increase) Decrease in current assets (81,977) (171,574) (89,597)
Increase (Decrease) in current liabilities 10,055 10,278 223
(Increase) Decrease in cash reserved for payables (11,990) (10,000) 1,990
Advance from current cash flows for future distributions 83,000 83,000 0
------------- ------------- -----------
Net Cash Provided From Operating Activities $ 573,374 $ 490,034 $ (83,340)
------------- ------------- -----------
CASH FLOWS FROM (USED IN) INVESTING
AND FINANCING ACTIVITIES
Recoveries from former general partners 0 1,391 1,391
Proceeds from sale of property and equipment 0 0 0
------------- ------------- -----------
Net Cash Provided From Investing And Financing
Activities $ 0 $ 1,391 $ 1,391
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Total Cash Flow For Quarter $ 573,374 $ 491,425 $ (81,949)
Cash Balance Beginning of Period 1,165,672 1,166,358 686
Less 2nd quarter distributions paid 8/00 (575,000) (575,000) 0
Change in cash reserved for payables or future distributions (71,010) (73,000) (1,990)
------------- ------------- -----------
Cash Balance End of Period $1,093,036 $1,009,783 $ (83,253)
Cash reserved for 3rd quarter L.P. distributions (575,000) (500,000) 75,000
Cash reserved for payment of payables (219,739) (256,000) (36,261)
------------- ------------- -----------
Unrestricted Cash Balance End of Period $ 298,297 $ 253,783 $ (44,514)
============== ============= ===========
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PROJECTED ACTUAL VARIANCE
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* Quarterly Distribution $ 575,000 $ 500,000 $ (75,000)
Mailing Date 11/15/00 (enclosed) -
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</TABLE>
* Refer to distribution letter for detail of quarterly distribution.
<PAGE>
PROJECTIONS FOR
DISCUSSION PURPOSES
DIVALL INSURED INCOME PROPERTIES 2 LP
2000 PROPERTY SUMMARY
AND RELATED ESTIMATED RECEIPTS
PORTFOLIO (Note 1)
<TABLE>
<CAPTION>
-------------------------- ------------------------------------ ---------------------------
REAL ESTATE EQUIPMENT TOTALS
-------------------------- ------------------------------------ ---------------------------
ANNUAL LEASE ANNUAL
---------------------------------- BASE % EXPIRATION LEASE % * ANNUAL
CONCEPT LOCATION COST RENT YIELD DATE COST RECEIPTS RETURN COST RECEIPTS RETURN
---------------------------------- -------------------------- ------------------------------------ ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
APPLEBEE'S COLUMBUS, OH 1,059,465 135,780 12.82% 84,500 0 0.00% 1,143,965 135,780 11.87%
BLOCKBUSTER OGDEN, UT 646,425 100,554 15.56% 646,425 100,554 15.56%
DENNY'S PHOENIX, AZ 972,726 65,000 6.68% 183,239 0 0.00% 1,155,965 65,000 5.62%
DENNY'S PHOENIX, AZ 865,900 115,200 13.30% 221,237 0 0.00% 1,087,137 115,200 10.60%
FIESTA TIME TWIN FALLS, ID 699,032 83,200 11.90% 190,000 0 0.00% 889,032 83,200 9.36%
MR. MUNCHIES (3) PHOENIX, AZ 500,000 50,800 10.16% 14,259 0 0.00% 514,259 50,800 9.88%
HARDEE'S (5) S. MILWAUKEE, WI 808,032 64,000 7.92% 808,032 64,000 7.92%
HARDEE'S (5) HARTFORD, WI 686,563 64,000 9.32% 686,563 64,000 9.32%
HARDEE'S (5) MILWAUKEE, WI 1,010,045 76,000 7.52% (4) 260,000 0 0.00% 1,421,983 76,000 5.34%
" " 151,938 0 0.00%
HARDEE'S (5) FOND DU LAC, WI 849,767 88,000 10.36% (4) 290,469 0 0.00% 1,140,236 88,000 7.72%
HARDEE'S (5) MILWAUKEE, WI 0 0 0.00% 780,000 0 0.00% 780,000 0 0.00%
HOOTER'S R. HILLS, TX 1,246,719 95,000 7.62% 1,246,719 95,000 7.62%
HOSTETTLER'S DES MOINES, IA 845,000 55,584 6.58% 52,813 0 0.00% 897,813 55,584 6.19%
KFC SANTA FE, NM 451,230 60,000 13.30% 451,230 60,000 13.30%
MIAMI SUBS PALM BEACH, FL 743,625 39,000 5.24% 743,625 39,000 5.24%
---------------------------------- -------------------------- ------------------------------------ ---------------------------
</TABLE>
Note 1: This property summary includes only current property and equipment
held by the Partnership. Equipment lease receipts shown include a
return of capital.
2: Rent is based on 12.5% of monthly sales. Rent projected for 2000 is
based on 1999 sales levels.
3: The Partnership entered into a long-term ground lease in which the
Partnership is responsible for payment of rent.
4: The lease was terminated and the equipment sold to Hardee's Food
Systems in conjunction with their assumption of the Terratron leases
in November 1996.
5: These leases were assumed by Hardee's Food Systems at a reduced rental
rate from that stated in the original leases.
Page 1 of 2
<PAGE>
PROJECTIONS FOR
DISCUSSION PURPOSES
DIVALL INSURED INCOME PROPERTIES 2 LP
1999 PROPERTY SUMMARY
AND RELATED ESTIMATED RECEIPTS
PORTFOLIO (Note 1)
<TABLE>
<CAPTION>
REAL ESTATE EQUIPMENT TOTALS
----------------------------- --------------------------------------- -----------------------------
ANNUAL LEASE ANNUAL
BASE % EXPIRATION LEASE % ANNUAL %
CONCEPT LOCATION COST RENT YIELD DATE COST RECEIPTS RETURN COST RECEIPTS RETURN
----------- ---------------- ---------- --------- ------ ---------- --------- -------- ------ ---------- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
POPEYE'S PARK FOREST, IL 580,938 77,280 13.30% 580,938 77,280 13.30%
SUNRISE PS PHOENIX, AZ 1,084,503 127,920 11.80% 79,219 0 0.00% 1,182,735 127,920 10.82%
19,013 0 0.00%
VILLAGE INN GRAND FORKS, ND 739,375 84,000 11.36% 739,375 84,000 11.36%
WENDY'S AIKEN, SC 633,750 90,480 14.28% 633,750 90,480 14.28%
WENDY'S CHARLESTON, SC 580,938 76,920 13.24% 580,938 76,920 13.24%
WENDY'S N. AUGUSTA, SC 660,156 87,780 13.30% 660,156 87,780 13.30%
WENDY'S AUGUSTA, GA 728,813 96,780 13.28% 728,813 96,780 13.28%
WENDY'S CHARLESTON, SC 596,781 76,920 12.89% 596,781 76,920 12.89%
WENDY'S AIKEN, SC 776,344 96,780 12.47% 776,344 96,780 12.47%
WENDY'S AUGUSTA, GA 649,594 86,160 13.26% 649,594 86,160 13.26%
WENDY'S CHARLESTON, SC 528,125 70,200 13.29% 528,125 70,200 13.29%
WENDY'S MT. PLEASANT, SC 580,938 77,280 13.30% 580,938 77,280 13.30%
WENDY'S MARTINEZ, GA 633,750 84,120 13.27% 633,750 84,120 13.27%
---------- --------- ------ --------- - ----- ---------- --------- ------
PORTFOLIO TOTALS
(27 Properties) 20,158,534 2,224,738 11.04% 2,326,687 0 0.00% 22,485,211 2,224,739 9.89%
</TABLE>
Note 1: This property summary includes only current property and equipment held
by the Partnership. Equipment lease receipts shown include a return of
capital.
Page 2 of 2
