FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter ended June 30, 1997
------------------------------------------------------
Commission file number 0-16832
------------------------------------------------------
IDM Participating Income Company-II
(A California Limited Partnership)
State of California 33-0177934
- -------------------------------------- -------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
2424 S.E. Bristol Street, Suite 200
Newport Beach, California 92660
- -------------------------------------- -------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (714) 225-7520
-------------------------------------
Indicate by check mark 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 [X]. No [_].
Number of limited partnership interests outstanding as of June 30, 1997: 200,000
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following financial statements are submitted in the next pages:
Page number
-----------
Balance Sheets - June 30, 1997 and December 31, 1996 4
Statements of Operations - For the Six Months Ended
June 30, 1997 and 1996 and the Three Months Ended
June 30, 1997 and 1996 5
Statements of Cash Flows - For the Six Months Ended
June 30, 1997 and 1996 6
Notes to Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview:
The following discussion should be read in conjunction with the Partnership's
Financial Statements and Notes thereto appearing elsewhere in this Form 10-Q.
The bankruptcy proceeding and the Plan has had, and will continue to have, a
material and substantial impact on the Partnership's liquidity, capital
resources and results of operations, which are discussed below.
Results of Operations:
Comparison of 1997 to 1996.
Interest income decreased in 1997 as a result of the sale of the Meadow Wood
Village, Ltd. note and junior deed of trust effective September 1, 1996.
Interest continued to accrue at 12.12% through the sale date. For the six months
and three months ended June 30, 1996, the Partnership recognized interest income
of $114,000 and $57,000, respectively, related to this loan.
Meadow Wood Village, Ltd. discontinued interest payments in 1996. For the six
months and three months ended June 30, 1996, interest receivable of $134,000 and
$57,000 related to the Meadow Wood Village, Ltd. note was reserved in its
entirety. This loan was sold in 1996 and no such reserves were incurred in 1997.
2
<PAGE>
General and administrative expenses were unchanged for the six month period
ended June 30, 1997 when compared to the same period in 1996. This is the result
of an increase in accounting and legal fees in 1997. This increase was offset by
a reduction in other professional fees incurred for a fair value opinion on the
Villa Redondo loan receivable in 1996. No such costs were incurred in 1997.
For the three month period ended June 30, 1997, when compared to the same period
in 1996, general and administrative expenses increased by $16,000. This is the
result of an increase in accounting and legal fees in 1997 when compared to the
same period in the prior year.
Liquidity and Capital Resources:
During the six months ended June 30, 1997, the Partnership's cash position
increased by the collection of receivables to affiliates and the collection of
interest income. The Partnership is in a liquid position at June 30, 1997 with
cash balances of $494,000 and current liabilities of $10,000. The Partnership
has no commitments for any future capital expenditures.
Inflation:
The Partnership does not expect inflation to be a material factor in its
operations in 1997.
3
<PAGE>
IDM PARTICIPATING INCOME COMPANY - II
(A California Limited Partnership)
BALANCE SHEETS
June 30, 1997 and December 31, 1996
June 30, 1997 December 31, 1996
------------- -----------------
ASSETS
Cash $ 494,000 $ 576,000
Loans to affiliates:
Interest receivable 15,000 57,000
Principal, less reserve for possible
losses of $2,124,000 at June 30, 1997
and $8,924,000 at December 31, 1996 615,000 415,000
Receivable from affiliate 92,000 150,000
------------- -----------------
Total Assets $ 1,216,000 $ 1,198,000
============= =================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 10,000 $ 1,000
Partners' capital:
General Partner 436,000 436,000
Limited Partners:
200,000 units authorized,
200,000 issued and outstanding 770,000 761,000
------------- -----------------
Total Partners' capital 1,206,000 1,197,000
------------- -----------------
Total Liabilities and Partners' capital $ 1,216,000 $ 1,198,000
============= =================
See accompanying notes
4
<PAGE>
IDM PARTICIPATING INCOME COMPANY - II
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 1997 and 1996
and for the Three Months Ended June 30, 1997 and 1996
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
------------------------ ------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Interest income $ 56,000 $ 173,000 $ 31,000 $ 91,000
General and administrative expenses (47,000) (47,000) (32,000) (16,000)
Provision for possible losses -- (134,000) -- (57,000)
---------- ---------- ---------- ----------
Net income (loss) $ 9,000 $ (8,000) $ (1,000) $ 18,000
---------- ---------- ---------- ----------
Net income (loss) allocable to
limited partners $ 9,000 $ (8,000) $ (1,000) $ 18,000
========== ========== ========== ==========
Average number of limited
partnership interests outstanding 200,000 200,000 200,000 200,000
========== ========== ========== ==========
Net income (loss) per limited
partnership interest $ 0.05 $ (0.04) $ (0.01) $ 0.09
========== ========== ========== ==========
</TABLE>
See accompanying notes
5
<PAGE>
IDM PARTICIPATING INCOME COMPANY - II
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1997 and 1996
Six Months Ended June 30,
----------------------
1997 1996
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 9,000 $ (8,000)
Adjustments to reconcile net income (loss)
to cash provided by (used in) operating activities:
Decrease (increase) in interest receivable 42,000 (132,000)
Decrease in receivable from affiliate 58,000 0
Provision for possible losses 0 134,000
Increase in accounts payable 9,000 0
--------- ---------
Net cash provided by (used in)
operating activities 118,000 (6,000)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans to affiliates (200,000) 0
Collections of loans from affiliates 0 0
--------- ---------
Net cash used in investing activities (200,000) 0
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners 0 0
--------- ---------
Net cash used in financing activities 0 0
--------- ---------
NET DECREASE IN CASH (82,000) (6,000)
Cash beginning of period 576,000 14,000
--------- ---------
Cash end of period $ 494,000 $ 8,000
========= =========
See accompanying notes
6
<PAGE>
IDM PARTICIPATING INCOME COMPANY-II
A California Limited Partnership
Notes to Financial Statements
1. BASIS OF FINANCIAL STATEMENTS
In the opinion of the Partnership's management, these unaudited financial
statements reflect all adjustments which are necessary for a fair presentation
of its financial position at June 30, 1997 and results of operations and cash
flows for the periods presented. All adjustments included in these statements
are of a normal and recurring nature. These financial statements should be read
in conjunction with the financial statements and notes thereto contained in the
Form 10-K of the Partnership for the year ended December 31, 1996.
7
<PAGE>
PART IV - OTHER INFORMATION
ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS:
The following Exhibits are filed herewith pursuant to Rule 601 of Regulation
S-K.
(27) Financial Data Schedule
B. REPORTS ON FORM 8-K
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.
IDM PARTICIPATING INCOME COMPANY-II,
a California Limited Partnership
IDM PARTICIPATING INCOME CORPORATION
General Partner of the General Partner
Date: July 15, 1997 STEVEN M. SPEIER
Steven M. Speier
President and Director
8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM IDM PARTICIPATING INCOME COMPANY-II JUNE 30, 1997 FINANCIAL STATEMENTS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 494,000
<SECURITIES> 0
<RECEIVABLES> 107,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 601,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,216,000
<CURRENT-LIABILITIES> 10,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,206,000
<TOTAL-LIABILITY-AND-EQUITY> 1,216,000
<SALES> 0
<TOTAL-REVENUES> 57,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 47,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 9,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 9,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,000
<EPS-PRIMARY> 0.05
<EPS-DILUTED> 0.05
</TABLE>
