<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 Q/A
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
-----------------------------------
FOR QUARTER ENDED MARCH 31, 1995
Commission file number 0-26468
American Retirement Villas Properties II
- ----------------------------------------
(Exact name of Registrant as specified in it's charter)
California 33-0278155
- ---------- ----------
state or other jurisdiction (IRS Employer Identification
of organization Number)
245 Fischer Avenue, Suite D-1
Costa Mesa, California 92626
- ---------------------- -----
(address of principal executive (zip code)
office)
Registrant's telephone number, (714) 751-7400
including area code --------------
Indicate by a check mark whether the registrant (1) has filed all the reports to
be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months, (or for such shorter period that the registrant
was required to file reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- -----
<PAGE> 2
PART I ITEM 1
AMERICAN RETIREMENT VILLAS PROPERTIES II
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS (UNAUDITED)
MARCH 31, 1995 AND DECEMBER 31, 1994
<TABLE>
<CAPTION>
1995 1994
ASSETS (UNAUDITED) (AUDITED)
---------------------------------- ----------- -----------
<S> <C> <C>
Properties, at cost (notes 3, 4 and 5)
Land $ 2,902,684 $ 2,902,684
Building and improvements, less
accumulated depreciation of $4,745,034
in 1995 and $3,865,219 in 1994 15,704,322 15,669,092
Leasehold property and improvements,
less accumulated amortization of
$5,163,247 in 1995
and $5,595,821 in 1994 1,350,032 1,764,926
Furniture, fixtures and equipment, less
accumulated depreciation of $1,037,746
in 1995 and $1,108,392 in 1994 814,936 692,250
----------- -----------
Net Properties 20,771,974 21,028,952
Cash and cash equivalents 316,588 605,100
Loan fees, less accumulated amortization
of $7,998 in 1995 and $7,093 in 1994 2,701 3,606
Other assets 1,196,305 1,127,179
----------- -----------
Total assets $22,287,569 $22,764,837
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Notes Payable (note 5) 6,660,629 $ 7,189,166
Accounts payable and accrued expenses 1,081,196 772,228
Amounts payable to affiliates (note 3) 125,400 494,423
Distribution payable to partners 93,673 544,381
----------- -----------
Total Liabilities 7,960,897 9,000,198
Partners' capital (deficit) (note 2 and 3):
General partners' capital (deficit) 291,177 (162,861)
Limited partners' capital, 34,995 units
outstanding 14,035,496 13,927,500
----------- -----------
Total liabilities and partners' equity 22,287,569 $22,764,837
=========== ===========
</TABLE>
See accompanying notes to financial statements (unaudited).
<PAGE> 3
PART I ITEM 1
AMERICAN RETIREMENT VILLAS PROPERTIES II
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR QUARTER ENDED MARCH 31, 1995
FOR QUARTER ENDED MARCH 31, 1994
<TABLE>
<CAPTION>
QUARTER QUARTER
ENDED MARCH ENDED MARCH
31, 1995 31, 1994
----------- -----------
<S> <C> <C>
Revenues:
Rent 3,696,826 3,406,167
Assisted living 495,679 370,004
Interest 3,998 4,161
Other 58,714 43,012
---------- ----------
Total Revenues 4,255,218 3,823,344
---------- ----------
Costs and expenses (note 3):
Rental property operations 2,128,214 2,003,038
Assisted living 204,209 178,414
General and administrative 454,862 461,687
Ground rent (note 4) 286,699 285,771
Depreciation and amortization 526,902 691,932
Property taxes 128,343 132,880
Advertising 31,433 14,354
Repairs & maintenance 113,068 84,303
Interest 147,550 148,213
Bad debt 14,852 15,492
---------- ----------
Total costs and expenses 4,036,132 4,016,084
Net Income (loss) 219,086 (192,740)
Net gain (loss) to General Partner 2,191 (1,927)
Net gain (loss) to Limited Partner $ 216,895 $ (190,812)
========== ==========
Net Income (loss) per Limited Partner
unit $ 6.20 $ (5.45)
========== ==========
</TABLE>
See accompanying notes to financial statements (unaudited).
<PAGE> 4
PART I ITEM 1
AMERICAN RETIREMENT VILLAS PROPERTIES II
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THREE MONTHS ENDED MARCH 31, 1995
FOR THREE MONTHS ENDED MARCH 31, 1994
<TABLE>
<CAPTION>
1995 1994
----------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 219,086 $ (192,740)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 526,902 691,932
Change in assets and liabilities:
Decrease in loan fees 905 1,156
(Increase) in other assets (69,126) (97,067)
Increase (decrease) in accounts
payable and accrued expenses 308,968 43,979
Increase (decrease) in amounts
payable to affiliates 83,923 12,975
----------- ----------
Net cash provided by operating activities 1,070,657 460,235
Cash flows from investing activities:
Capital expenditures (269,507) (85,143)
----------- ----------
Net cash used in investing activities (269,507) (85,143)
----------- ----------
Cash flows from financing activities:
Borrowings on line of credit 150,000 225,000
Principal repayments on line of credit (650,000) (325,000)
Principal repayments on notes payable (28,537) (27,486)
Distributions paid (561,124) (431,914)
----------- ----------
Net cash used by financing activities (1,089,662) (559,400)
----------- ----------
Net decrease in cash and cash equivalents (288,512) (184,308)
Cash and cash equivalents at beginning of period 605,100 389,830
----------- ----------
Cash and cash equivalents at end of period $ 316,588 $ 205,522
=========== ==========
</TABLE>
See accompanying notes to financial statements (unaudited).
<PAGE> 5
PART 1 ITEM 1 (CONTINUED)
AMERICAN RETIREMENT VILLAS PROPERTIES II
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1995
(1) SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference. The financial statements
reflect all adjustments and disclosures which, are in the opinion of management,
necessary for a fair presentation. All such adjustments are of a normal
recurring nature.
Carrying Value of Real Estate
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
Restricted Cash
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
Loan Fees
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
Rental Income
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
Income Taxes
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
Net Income (Loss) per Limited Partner Unit
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
Cash and Cash Equivalents
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
<PAGE> 6
PART 1 ITEM 1 (CONTINUED)
AMERICAN RETIREMENT VILLAS PROPERTIES II
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1995
Reclassifications
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
(2) ORGANIZATION AND PARTNERSHIP AGREEMENT
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
(3) TRANSACTIONS WITH AFFILIATES
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference, except for the following
additional comments. For the quarter ended March 31, 1995 property management
fees and partnership administration fees of $212,761 and $76,492, respectively,
were paid or accrued to the Managing General Partner.
During the quarter ending March 31, 1995, the General Partner made a non-cash
contribution of $452,947 to the Partnership as forgiveness of fees owed to the
General Partner. Such fees had been recognized as expenses by the Partnership in
prior periods.
(4) PROPERTIES
Covina Villa:
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
Valley View Lodge of Rossmoor:
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
Retirement Inn of Daly City:
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
Retirement Inn of Fullerton:
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
Retirement Inn of Sunnyvale:
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
<PAGE> 7
PART 1 ITEM 1 (CONTINUED)
AMERICAN RETIREMENT VILLAS PROPERTIES II
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1995
Retirement Inn of Fremont:
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
Retirement Inn of Campbell:
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
Retirement Inn of Burlingame:
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
Inn at Willow Glen:
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
Montego Heights Lodge:
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
(5) NOTES PAYABLE
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
(6) ESOP
Pursuant to Regulation S-X Rule 10-1(5) the material stated in the December 31,
1994 Form 10K is incorporated by this reference.
<PAGE> 8
PART I ITEM II
AMERICAN RETIREMENT VILLAS PROPERTIES II
(A CALIFORNIA LIMITED PARTNERSHIP)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(1) LIQUIDITY.
The General Partners expect that the cash to be
generated from operations of all the Registrant's properties will be adequate to
pay operating expenses, make necessary capital improvements, make required
principal reductions, and provide distributions to the Partners. On a long-term
basis, the Registrant's liquidity is sustained primarily from cash flow provided
by operating activities. During the three months ended March 31, 1995, net cash
provided by operating activities was approximately $748,835 as compared to cash
provided by operating activities of approximately $590,676 for the three months
ended March 31, 1994.
During the three months ended March 31, 1995, the
Registrant used net cash in investing activities of $269,507 compared to $85,143
for the three months ended March 31, 1994. The Registrant's investing activities
consisted of capital improvements made on its ten properties.
During the three months ended March 31, 1995, the
Registrant used net cash in financing activities of $636,715 compared to
$559,400 for the three months ended March 31, 1994. The Registrant's financing
activities consisted of principal reduction on notes payable and distributions
paid to the Partners.
The General Partners are not aware of any trends,
other than national economic conditions, which have had or which may be
reasonably expected to have a material favorable or unfavorable impact on
revenues or income from the operations or sale of properties. The General
Partners believe that if the inflation rate increases they will be able to pass
the subsequent increase in operating expenses onto the residents of the
properties by way of higher rental and Assisted Living rates. The Registrant has
long term debt of approximately $6,660,629, as of March 31, 1995. $3,462,282 is
due August 1, 2018, $2,838,676 is due November 1, 2016, $349,333 is due December
1, 1996, and $10,338 is due January 1, 1997.
(2) CAPITAL RESOURCES.
Registrant contemplates spending approximately
$500,000 for capital expenditures during 1995 for physical improvements at its
four facilities. The funds for these improvements should be available from
operations.
There are no known material trends, favorable or
unfavorable, in the Registrant's capital resources, and there is no expected
change in the mix of such resources.
(3) RESULTS OF OPERATIONS.
THREE MONTHS ENDED MARCH 31, 1995 COMPARED WITH
THE THREE MONTHS ENDED MARCH 31, 1994.
Revenue for the three months ended March 31,
1995, and the three months ended March 31, 1994 includes rental income and
Assisted Living income from all ten properties, interest earned on cash balances
and other revenue. Total revenues for the three months ended March 31, 1995 were
$4,255,218, an increase of approximately 11% over revenues of $3,823,344 for the
three months ended March 31, 1994.
<PAGE> 9
PART I ITEM II (CONTINUED)
AMERICAN RETIREMENT VILLAS PROPERTIES II
(A CALIFORNIA LIMITED PARTNERSHIP)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The largest component of revenue, rent, increased
by approximately 8% from the three months ended March 31, 1994 to the three
months ended March 31, 1995. The increase in rent was due to an increase in
occupancy of approximately 7% and an increase in rental rates of approximately
4%.
Revenue from Assisted Living increased by
approximately 34% from the three months ended March 31, 1994 to the three months
ended March 31, 1995. The increase in Assisted Living was due to aggressive
marketing of the Assisted Living services and the resulting increase in the
number of residents using the program.
Interest and other revenue increased
approximately 33% from the three months ended March 31, 1994 to the three months
ended March 31, 1995. Interest income results from interest earned on cash
deposits. Other revenue generally includes processing fees and beauty shop
revenue.
Sources of revenue for the three months ended
March 31, 1995 and March 31, 1994 are summarized as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1995 MARCH 31, 1994
<S> <C> <C>
Rent $3,696,826 $3,406,167
Assisted Living 495,679 370,004
Interest 3,998 4,161
Other 58,714 43,012
---------- ----------
$4,255,218 $3,823,344
========== ==========
</TABLE>
Total cost and expenses for the three months
ended March 31, 1995 were $4,036,132, an increase of less than 1% over costs and
expenses of $4,016,084 for the three months ended March 31, 1994.
The largest component of expenses, rental
property operations, consist primarily of property management costs, payroll
related expenses, utilities, food expenses and maintenance and supplies. Rental
property operations expenses increased over 6% from the three months ended March
31, 1994 to the three months ended March 31, 1995. This increase in expenses
corresponds with the increase in revenues.
Assisted Living expenses consist primarily of the
related payroll expense. Assisted living expenses increased by over 14% from
the three months ended March 31, 1994 to the three months ended March 31, 1995.
Assisted Living expenses increased due to the increases in size of the related
staff providing Assisted Living services. This increase corresponds to the
increase in Assisted Living revenue.
<PAGE> 10
PART I ITEM II (CONTINUED)
AMERICAN RETIREMENT VILLAS PROPERTIES II
(A CALIFORNIA LIMITED PARTNERSHIP)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General and administrative expenses are comprised
of, but not limited to, costs for accounting, partnership administration, bad
debt, data processing, investor relations, insurance, and professional services.
General and administrative expenses decreased by over 1% from the three months
ended March 31, 1994 to the three months ended March 31, 1995.
Depreciation and amortization expense decreased
by approximately 24% from the three months ended March 31, 1994 to the three
months ended March 31, 1995. This decrease is due to fixed assets becoming fully
depreciated.
Interest expense remained approximately the same
for the three months ended March 31, 1994 compared to the three months ended
March 31, 1995.
Selected costs and expenses for the three months
ended March 31, 1995 and March 31, 1994 are summarized as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1995 MARCH 31, 1994
<S> <C> <C>
Rental Property Operations $2,128,214 $2,236,727
Assisted Living 204,209 202,675
General and Administrative 454,863 449,770
Depreciation and Amortization 526,902 432,889
Property Taxes 128,343 180,092
Interest 147,550 148,213
</TABLE>
<PAGE> 11
PART II
AMERICAN RETIREMENT VILLAS PROPERTIES II
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 1 LEGAL PROCEEDINGS
None
ITEM 2 CHANGE IN SECURITIES
None
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
None
ITEM 5 OTHER INFORMATION
None.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8K
A. Exhibit 27 - Financial Data Schedule
B. None
<PAGE> 12
PART II (CONTINUED)
AMERICAN RETIREMENT VILLAS PROPERTIES II
(A CALIFORNIA LIMITED PARTNERSHIP)
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.
AMERICAN RETIREMENT VILLAS PROPERTIES II,
A CALIFORNIA LIMITED PARTNERSHIP
By ARV Assisted Living, Inc.
-----------------------------
Managing General Partner
Date: February 1, 1996 By /s/GARY L. DAVIDSON
---------------------
Gary L. Davidson
Chairman of the Board
Date: February 1, 1996 By /s/GRAHAM ESPLEY-JONES
-----------------------
Graham Espley-Jones
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 1,172,207
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 343,387
<PP&E> 20,771,974
<DEPRECIATION> 10,946,027
<TOTAL-ASSETS> 22,287,569
<CURRENT-LIABILITIES> 7,960,897
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 14,326,672
<TOTAL-LIABILITY-AND-EQUITY> 22,287,569
<SALES> 0
<TOTAL-REVENUES> 4,255,218
<CGS> 0
<TOTAL-COSTS> 3,888,582
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 147,550
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 219,086
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
