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 September 30, 2000
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Commission file number 0-16832
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IDM Participating Income Company-II
(A California Limited Partnership)
State of California 33-0177934
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(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
2424 S.E. Bristol Street, Suite 333
Newport Beach, California 92660
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(Address of principal executive (Zip Code)
offices)
Registrant's telephone number,
including area code: (713) 706-6271
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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 September 30, 2000:
200,000
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following financial statements are submitted in the next pages:
PAGE
NUMBER
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Balance Sheets - September 30, 2000 and December 31, 1999......... 4
Statements of Operations - For the Nine Months Ended
September 30, 2000 and 1999 and for the Three Months Ended
September 30, 2000 and 1999....................................... 5
Statements of Cash Flows - For the Nine Months Ended September
30, 2000 and 1999................................................. 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 IDM Participating
Income Company-II's (the Partnership) Financial Statements and Notes thereto
appearing elsewhere in this Form 10-Q.
Results of Operations:
Interest income for the nine months and three months ended September 30, 2000
increased by approximately $12,000, or 9%, and by $3,000, or 7%, respectively,
in comparison to the corresponding periods in 1999. This increase was due to
higher loan receivable balances. In 2000, the Partnership's $373,000 mortgage
loan on the Arizona Land Development was increased to $1,643,000. This increase
was primarily used to replace the security associated with Sorrento II and Bally
Land mortgages.
General and administrative expenses for the nine months ended September 30, 2000
increased by approximately $15,000, or 28%, when compared to the same period in
the prior year, principally due to an increase in auditing costs and other
professional fees. General and administrative expenses for the three months
ended September 30, 2000 increased by approximately $3,000, or 38%, primarily
due to the increase in auditing costs.
2
<PAGE>
Liquidity and Capital Resources:
The Partnership is in an illiquid position at September 30, 2000 with a cash
balance of approximately $2,000 and current liabilities of approximately
$29,000. 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 2000.
3
<PAGE>
IDM PARTICIPATING INCOME COMPANY - II
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
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<TABLE>
<CAPTION>
SEPTEMBER 30, 2000 DECEMBER 31, 1999
(UNAUDITED)
-------------------- --------------------
<S> <C> <C>
ASSETS
Cash ................................................................................. $ 2,000 $ 37,000
Loans to affiliates:
Interest receivable .............................................................. 139,000 175,000
Principal, less reserve for possible losses
of $859,000 at December 31, 1999 ................................................. 1,643,000 1,471,000
Receivables from affiliates .......................................................... 7,000 0
Prepaid expenses ..................................................................... 3,000 0
-------------------- --------------------
Total Assets ......................................................................... $ 1,794,000 $ 1,683,000
==================== ====================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable ..................................................................... 29,000 0
General Partner ...................................................................... 441,000 440,000
Limited Partners:
200,000 units authorized,
200,000 issued and outstanding ................................................... 1,324,000 1,243,000
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Total Partners' capital .............................................................. 1,765,000 1,683,000
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Total Liabilities and Partners' capital .............................................. $ 1,794,000 $ 1,683,000
==================== ====================
Limited partners' equity per unit .................................................... $ 6.62 $ 6.22
==================== ====================
</TABLE>
See accompanying notes
4
<PAGE>
IDM PARTICIPATING INCOME COMPANY - II
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
AND FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
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<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
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2000 1999 2000 1999
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Interest income ........................................ $ 150,000 $ 138,000 $ 49,000 $ 46,000
General and administrative expenses .................... (68,000) (53,000) (11,000) (8,000)
--------------- --------------- --------------- ---------------
Net income ............................................. $ 82,000 $ 85,000 $ 38,000 $ 38,000
--------------- --------------- --------------- ---------------
Net income allocable to
limited partners .................................... $ 82,000 $ 85,000 $ 38,000 $ 38,000
=============== =============== =============== ===============
Number of limited partnership
interests outstanding ............................... 200,000 200,000 200,000 200,000
=============== =============== =============== ===============
Net income per limited
partnership interest ................................ $ 0.41 $ 0.43 $ 0.19 $ 0.19
=============== =============== =============== ===============
</TABLE>
See accompanying notes
5
<PAGE>
IDM PARTICIPATING INCOME COMPANY - II
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
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<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-----------------------------------
2000 1999
(UNAUDITED) (UNAUDITED)
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ............................................................................... $ 82,000 $ 85,000
Adjustments to reconcile net income to cash
provided by (used in) operating activities:
Decrease (increase) in interest receivable ............................................ 36,000 (130,000)
(Increase) decrease in prepaid expenses ............................................... (3,000) 7,000
Increase in accounts payable .......................................................... 29,000 2,000
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Net cash provided by (used in) operating activities ................................... 144,000 (36,000)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Loans to affiliates ...................................................................... (204,000) 0
Collections of loans from affiliates ..................................................... 32,000 52,000
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Net cash (used in) provided by investing activities ................................... (172,000) 52,000
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CASH FLOWS FROM FINANCING ACTIVITIES:
Advances to affiliates ................................................................... (7,000) 0
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Net cash used in financing activities ................................................. (7,000) 0
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NET (DECREASE) INCREASE IN CASH ............................................................ (35,000) 16,000
Cash beginning of period ................................................................ 37,000 8,000
--------------- ---------------
Cash end of period ...................................................................... $ 2,000 $ 24,000
=============== ===============
</TABLE>
See accompanying notes
6
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IDM PARTICIPATING INCOME COMPANY-II
A California Limited Partnership
Notes to Financial Statements
(Unaudited)
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 September 30, 2000 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,
1999.
2. RELATED PARTY TRANSACTIONS
Affiliates of the general partner are reimbursed for certain general and
administrative services provided to the Partnership. During the nine months
ended September 30, 2000 and 1999, affiliates received approximately $3,000 for
such services in each respective period.
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
A Form 8-K was filed in May 2000 reporting a change in the Partnership's
Certifying Accountant.
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: November 1, 2000 /s/ WILLIAM J. CARDEN
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William J. Carden
Director
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