<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) July 24, 1998
NET 2 L. P.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 33-25984 13-3497738
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification No.)
c/o Lexington Corporate Properties Trust
355 Lexington Avenue
New York, New York 10017
(Address of principal Executive offices) (zip code)
Registrant's telephone number, including area code (212) 692-7200
</TABLE>
N/A
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
The Partnership's previous report on Form 8-K, dated August 7, 1998, provides
specific information related to the Canton and the Spartanburg Properties (the
"Properties") acquired on July 24, 1998. This report is filed for the purpose of
providing certain pro forma information.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS
(a) Financial Statements
The current tenant and developer of the Properties, Best Buy Company
Inc., was the owner and tenant of the Properties until February 1998.
Accordingly, there are no historical financial statements for the
properties.
(b) Pro Forma Financial Information
Estimated Taxable Operating Results and Cash Available from Operations
of the Canton and Spartanburg Properties.
Notes to Estimated Taxable Operating Results and Cash Available from
Operations of the Canton and Spartanburg Properties.
Pro Forma Balance Sheet as of June 30, 1998.
Pro Forma Statements of Income for the Year Ended December 31, 1997 and
the Six Months Ended June 30, 1998.
Notes to Pro Forma Financial Statements.
(c) Exhibits:
None.
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NET 2 L. P.
Estimated Taxable Operating Results and
Cash Available from Operations
of the Canton and Spartanburg Properties
(Unaudited and in thousands)
The following statement represents estimates of taxable operating results and
cash available from operations of the Canton and Spartanburg Properties, based
upon rents to be received in the first year of the leases. These estimated
results do not purport to represent results of operations of the Canton or
Spartanburg Properties in the future and were prepared on the basis described in
the accompanying notes which should be read in conjunction herewith. The General
Partner is not aware of any material supportable facts that would cause these
estimates to be misleading.
<TABLE>
<S> <C>
Estimated Taxable Operating Results:
Cash rent under net lease $ 860
Less:
Interest expense 565
Depreciation 182
---
Estimated taxable operating results $ 113
===
Estimated Cash Available from Operations:
Estimated taxable operating results $ 113
Add:
Depreciation 182
---
Estimated cash available from operations $ 295
===
</TABLE>
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NET 2 L. P.
Notes to Estimated Operating Results and
Cash Available from Operations
of the Canton and Spartanburg Properties
Basis of Presentation
Cash rent under the net lease represents the rental payments expected to
be received during the first year of the respective leases.
Interest expense represents tax deductible interest that will be incurred
on the related mortgage debt.
The purchase price was allocated to land (24%) and to buildings (76%),
based on appraisals. Depreciation is computed on a straight-line basis
over 40 years.
<PAGE> 5
NET 2 L. P.
Pro Forma Balance Sheet and Statements of Income
The accompanying Pro Forma Balance Sheet of Net 2 L. P. as of June 30, 1998,
gives effect to the purchase and financing of the Properties, as if these
properties were acquired as of June 30, 1998. The acquisition was reflected as
an adjustment to historical balance sheet as of June 30, 1998.
The accompanying Pro Forma Statements of Income for the year ended December 31,
1997 and six months ended June 30, 1998, give effect to all 1998 and 1997
acquisitions, as if these acquisitions were made as of January 1, 1997.
The Pro Forma Balance Sheet and the Statements of Income have been prepared by
the management of the Partnership. These pro forma statements may not be
indicative of the results that would have actually occurred if the properties
acquired had been in effect on the dates indicated. Also, they may not be
indicative of the results that may be achieved in the future. The Pro Forma
Balance Sheet and Statements of Income should be read in conjunction with the
Partnership's audited financial statements as of December 31, 1997 and for the
year then ended (which are contained in the Partnership's Form 10-K for the year
ended December 31, 1997), and the unaudited financial statements as of June 30,
1998, and for the six months then ended (which are contained in the
Partnership's Form 10-Q for the period ended June 30, 1998) and the accompanying
notes thereto.
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NET 2 L. P.
PRO FORMA BALANCE SHEET
June 30, 1998
(Unaudited and in thousands)
<TABLE>
<CAPTION>
Pro Forma
ASSETS Historical Adjustments Pro Forma
------ ---------- ----------- ---------
<S> <C> <C> <C>
Real estate, net $ 49,158 $ 9,525 $ 58,683
Cash and cash equivalents 2,504 (1,762) 742
Deferred expenses (net of accumulated amortization
of $548 and $480 in 1998 and 1997, respectively) 309 - 309
Rent receivable 2,069 - 2,069
Other assets 252 - 252
-------- -------- --------
Total assets $ 54,292 $ 7,763 $ 62,055
====== ===== ======
LIABILITIES AND PARTNERS' CAPITAL
Mortgage and notes payable $ 21,149 $ 7,763 $ 28,912
Accrued interest payable 121 - 121
Accounts payable and other liabilities 361 - 361
-------- -------- --------
21,631 7,763 29,394
------ ----- ------
Partners' capital (deficit):
General Partner (360) - (360)
Limited Partners ($100 per Unit, 500,000 Units
authorized, 477,167 Units issued
and outstanding) 33,021 - 33,021
------ -------- ------
32,661 - 32,661
------ -------- ------
Total liabilities and capital $ 54,292 $ 7,763 $ 62,055
====== ===== ======
</TABLE>
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NET 2 L. P.
NOTES TO PRO FORMA BALANCE SHEET
(Unaudited)
1. Pro Forma Adjustments
The adjustment to real estate, net reflects the purchase price of the
Properties.
The adjustment to cash and cash equivalents reflects partial settlement of
the purchase price.
The adjustment to mortgage and notes payable reflects the financing of the
acquisitions.
<PAGE> 8
NET 2 L. P.
PRO FORMA STATEMENT OF INCOME
Six months ended June 30, 1998
(Unaudited and in thousands, except per Unit amounts)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
Revenue:
Rental $ 1,673 $ 431 $ 2,104
Interest and other 36 - 36
------- ----- -------
1,709 431 2,140
----- --- -----
Expenses:
Interest expense 476 282 758
Depreciation 282 91 373
Amortization of deferred expenses 34 - 34
General and administrative 169 - 169
--- ----- ------
961 373 1,334
--- --- -----
Net Income $ 748 $ 58 $ 806
=== ==== ===
Net income per Unit
of limited partnership interest $ 1.54 $ 1.66
==== ====
</TABLE>
<PAGE> 9
NET 2 L. P.
PRO FORMA STATEMENT OF INCOME
Year ended December 31, 1997
(Unaudited and in thousands, except per Unit amounts)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
Revenue:
Rental $ 5,934 $ 1,184 $ 7,118
Interest and other 149 - 149
------ -------- ------
6,083 1,184 7,267
----- ----- -----
Expenses:
Interest expense 1,875 738 2,613
Depreciation 1,074 250 1,324
Amortization of deferred expenses 136 - 136
General and administrative 634 - 634
------ ----- ------
3,719 988 4,707
----- --- -----
Net Income $ 2,364 $ 196 $ 2,560
===== === =====
Net income per Unit of
limited partnership interest (*) $4.20 to $5.30 $4.55 to $5.74
============== ==============
</TABLE>
(*) Amounts allocated to unit holders vary depending on the dates they became
unit holders.
<PAGE> 10
NET 2 L. P.
NOTES TO PRO FORMA STATEMENTS OF INCOME
(Unaudited)
1. Pro Forma Adjustments
The adjustment to rental revenues relates to the straight-lining of rent
under the remaining lease term.
The adjustment to interest expense relates to the financing of the
acquisitions.
The adjustment to depreciation was based on an estimated useful life of 40
years, using the straight-line method.
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SIGNATURE
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.
NET 2 L. P.
By: Lepercq Net 2 L. P.
its general partner
By: Lepercq Net 2 Inc.
its general partner
Date: September 22, 1998 By: /s/ E. Robert Roskind
---------------------
E. Robert Roskind
President
