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Previous: NETWORK SYSTEMS INTERNATIONAL INC, 8-K, 2000-01-14 |
Next: MILLER DIVERSIFIED CORP, NT 10-Q, 2000-01-14 |
<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) December 22, 1999
-----------------
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)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 22, 1999, Net 2 L.P. (the "Partnership") sold for cash, a property
located in Bristol, Pennsylvania (the "Bristol Property") for approximately $8.6
million. The Bristol Property, aggregating 96,000 square feet, is net leased to
Jones Apparel Group, Inc. ("Jones"). The sale resulted in a loss of
approximately $780,000.
On December 28, 1999, the Partnership sold for cash, twelve properties located
in Michigan (the "Michigan Property") for approximately $8.2 million. The
Michigan Property, aggregating 77,846 square feet, is net leased to Ultramar
Diamond Shamrock Corporation ("Ultramar"). The sale resulted in a loss of
approximately $264,000.
On December 29, 1999, the Partnership sold for cash, a property located in
Southborough, Massachusetts (the "Southborough" Property) for approximately
$4.7 million. The Southborough Property, aggregating 57,698 square feet, is net
leased to Honeywell Inc. ("Honeywell"). The sale resulted in a gain of
approximately $875,000.
The Bristol and the Southborough Properties were sold to Lexington Corporate
Properties Trust (the "Purchaser"), whose chairman is an officer of the General
Partner. The Purchaser assumed mortgage indebtedness in its purchase of the
Bristol and Southborough Properties of approximately $6.4 million and $2.5
million, respectively.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS
(a) Financial Statements
Not required.
(b) Pro Forma Financial Information
Pro Forma Financial Information
Pro Forma Consolidated Balance Sheet at September 30, 1999.
Pro Forma Consolidated Statements of Income for the nine months ended
September 30, 1999 and the year ended December 31, 1998.
Notes to Pro Forma Consolidated Financial Statements
(c) Exhibits
None.
<PAGE> 3
NET 2 L.P. AND CONSOLIDATED PARTNERSHIPS
PRO FORMA CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENTS OF INCOME
The accompanying Pro Forma Consolidated Balance Sheet of Net 2 L.P. as of
September 30, 1999 gives effect to all 1999 dispositions as if such occurred on
September 30, 1999.
The accompanying Pro Forma Consolidated Statements of Income for the year ended
December 31, 1998 and the nine months ended September 30, 1999, give effect to
all 1998 and 1999 acquisitions and dispositions, as if such occurred as of
January 1, 1998.
The management of the Partnership prepared the Pro Forma Consolidated Balance
Sheet and Consolidated Statements of Income. These pro forma statements may not
be indicative of the results that would have actually occurred if such 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 Consolidated Balance
Sheet and Consolidated Statements of Income should be read in conjunction with
the Partnership's audited financial statements as of December 31, 1998, (which
are contained in the Partnership's Form 10-K), and the accompanying notes
thereto.
<PAGE> 4
NET 2 L.P. AND CONSOLIDATED PARTNERSHIPS
PRO FORMA CONSOLIDATED BALANCE SHEET
(In thousands, except Units and per Unit amounts)
September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
ASSETS Historical Adjustments Pro Forma
------ ---------- ----------- ---------
<S> <C> <C> <C>
Real estate, net $ 96,119 $ (19,622) $ 76,497
Cash and cash equivalents 1,042 - 1,042
Restricted cash - 11,952 11,952
Deferred expenses, net 454 (115) 339
Rent receivable 2,101 (1,327) 774
Other assets 27 - 27
--------- --------- ---------
Total assets $ 99,743 $ (9,112) $ 90,631
====== ===== ======
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Mortgage notes payable $ 61,335 $ (8,944) $ 52,391
Accrued interest payable 200 - 200
Accounts payable and other liabilities 126 - 126
-------- --------- --------
61,661 (8,944) 52,717
------ ----- ------
Partners' capital (deficit):
General Partner (252) (3) (255)
Limited Partners ($100 per Unit, 500,000 Units
authorized, 477,167 Units issued
and outstanding) 38,334 (165) 38,169
------ ------ ------
38,082 (168) 37,914
------ ------ ------
Total liabilities and partners' capital $ 99,743 $ (9,112) $ 90,631
====== ===== ======
</TABLE>
<PAGE> 5
NET 2 L.P. AND CONSOLIDATED PARTNERSHIPS
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
(Unaudited)
1. Pro Forma Adjustments
The adjustment to real estate, net reflects sale of the Bristol, Michigan
and Southborough Properties.
The adjustment to restricted cash represents the receipt of the sale
proceeds to be used in tax free like kind exchange transactions.
The adjustment to deferred expenses and rent receivable reflects the
write-off of assets relating to the sales.
The adjustment to mortgage notes payable reflects the assumption by the
Purchaser of mortgage on the Bristol and Southborough Properties.
The adjustment to partners' capital (deficit) reflects the change in net
equity of the Partnership resulting from the sale of the properties.
<PAGE> 6
NET 2 L.P. AND CONSOLIDATED PARTNERSHIPS
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per Unit amounts)
Nine Months Ended September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
Revenue:
Rental $ 7,568 $ (1,022) $ 6,546
Interest and other 236 - 236
------ --------- ------
7,804 (1,022) 6,782
----- ----- -----
Expenses:
Interest expense 3,482 (373) 3,109
Depreciation 1,508 (203) 1,305
Amortization of deferred expenses 153 (6) 147
General and administrative 527 - 527
------ --------- ------
5,670 (582) 5,088
----- ------ -----
Income before gain on
sale of properties, net 2,134 (440) 1,694
Gain on sale of properties, net 770 (770) -
------ ------ -----
Net Income $ 2,904 $ (1,210) $ 1,694
===== ===== =====
Net income per Unit
of limited partnership interest $5.96 $3.48
===== =====
</TABLE>
<PAGE> 7
NET 2 L.P. AND CONSOLIDATED PARTNERSHIPS
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per Unit amounts)
Year Ended December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
Revenue:
Rental $ 6,871 $ 1,718 $ 8,589
Interest and other 92 - 92
------- -------- -------
6,963 1,718 8,681
----- ----- -----
Expenses:
Interest expense 2,277 1,328 3,605
Depreciation 1,238 496 1,734
Amortization of deferred expenses 154 8 162
General and administrative 818 - 818
------ -------- ------
4,487 1,832 6,319
----- ----- -----
Income before gain on
sale of properties, net 2,476 (114) 2,362
Gain on sale of properties, net 4,516 (4,516) -
----- ----- -----
Net Income $ 6,992 $ (4,630) $ 2,362
===== ===== =====
Net income per Unit
of limited partnership interest (*) $12.62 to $15.55 $4.26 to $5.25
================ ==============
</TABLE>
(*) Amounts allocated to unit holders vary depending on the dates they became
unit holders.
<PAGE> 8
NET 2 L.P. AND CONSOLIDATED PARTNERSHIPS
NOTES TO PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
1. Pro Forma Adjustments
The adjustment to rental revenue relates to the establishment of a new
measurement date in the straight lining of rents under the lease term
resulting from acquisitions, offset by the effect of the sale of
properties.
The adjustment to interest expense relates to the net change in mortgage
debt incurred relating to acquisition and disposition of properties.
The adjustment to depreciation relates to the net change in building basis,
which is depreciated over an estimated useful life of 40 years, using the
straight-line method.
The adjustment to amortization relates to the net change in deferred costs,
which is amortized over the life of the loan of 10 years, using the
straight-line method.
<PAGE> 9
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.
<TABLE>
<S> <C>
NET 2 L.P.
By: Lepercq Net 2 L.P.
its general partner
By: Lepercq Net 2 Inc.
its general partner
Date: January 14, 2000 By: /s/ E. Robert Roskind
------------------------------------ ---------------------
E. Robert Roskind
President
</TABLE>
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