FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from________to________
Commission file number 0-19243
UNITED INVESTORS INCOME PROPERTIES II
(Exact name of small business issuer as specified in its charter)
Missouri 43-1542903
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
UNITED INVESTORS INCOME PROPERTIES II
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
March 31, 1999
Assets
Cash and cash equivalents $ 917
Receivables and deposits 21
Other assets 24
Investment in joint ventures 2,155
Investment properties:
Land $ 432
Buildings and related personal property 3,685
4,117
Less accumulated depreciation (780) 3,337
$ 6,454
Liabilities and Partners' Capital (Deficit)
Liabilities
Other liabilities $ 13
Distribution payable 141
Partners' Capital (Deficit)
General partner's $ (5)
Limited partners' (32,601 units
issued and outstanding) 6,305 6,300
$ 6,454
See Accompanying Notes to Financial Statements
b)
UNITED INVESTORS INCOME PROPERTIES II
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
1999 1998
Revenues:
Rental income $ 130 $ 127
Other income 6 9
Total revenues 136 136
Expenses:
Operating 5 6
General and administrative 33 16
Depreciation 28 28
Total expenses 66 50
Equity in net income of joint ventures 37 31
Net income $ 107 $ 117
Net income allocated to general partner (1%) $ 1 $ 1
Net income allocated to limited partners (99%) 106 116
$ 107 $ 117
Net income per limited partnership unit $3.25 $3.56
Distributions per limited partnership unit $4.29 $4.29
See Accompanying Notes to Financial Statements
c)
UNITED INVESTORS INCOME PROPERTIES II
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner's Partners' Total
Original capital contributions 32,601 $ -- $ 8,150 $ 8,150
Partners' (deficit) capital at
December 31, 1998 32,601 $ (5) $ 6,339 $ 6,334
Partners' distribution -- (1) (140) (141)
Net income for the three months
ended March 31, 1999 -- 1 106 107
Partners' (deficit) capital at
March 31, 1999 32,601 $ (5) $ 6,305 $ 6,300
See Accompanying Notes to Financial Statements
d)
UNITED INVESTORS INCOME PROPERTIES II
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
1999 1998
Cash flows from operating activities:
Net income $ 107 $ 117
Adjustments to reconcile net income to
net cash provided by operating activities:
Equity in net income of joint ventures (37) (31)
Depreciation 28 28
Change in accounts:
Other assets (2) (5)
Other liabilities (12) (16)
Net cash provided by operating activities 84 93
Cash flows provided by investing activities:
Distributions from joint ventures, net of
advances 24 31
Cash flows used in financing activities:
Partners' distribution -- (141)
Net increase (decrease) in cash and cash equivalents 108 (17)
Cash and cash equivalents at beginning of period 809 834
Cash and cash equivalents at end of period $ 917 $ 817
Supplemental disclosure of non-cash financing activity:
Distribution payable to partners of $141,000 was accrued at March 31, 1999
and paid in April 1999.
See Accompanying Notes to Financial Statements
e)
UNITED INVESTORS INCOME PROPERTIES II
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements of United Investors Income
Properties II (the "Partnership" or "Registrant") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of United Investor Real Estate, Inc., (the
"General Partner"), a Delaware corporation, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31,
1999, are not necessarily indicative of the results that may be expected for the
fiscal year ended December 31, 1999. For further information, refer to the
financial statements and footnotes thereto included in the Partnership's annual
report on Form 10-KSB for the fiscal year ended December 31, 1998.
NOTE B - TRANSFER OF CONTROL
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. ("Insignia") and Insignia
Properties Trust merged into Apartment Investment and Management Company
("AIMCO"), a publicly traded real estate investment trust, with AIMCO being the
surviving corporation (the "Insignia Merger"). As a result, AIMCO acquired 100%
ownership interest in the General Partner. The General Partner does not believe
that this transaction will have a material effect on the affairs and operations
of the Partnership.
NOTE C - INVESTMENT IN CORINTH SQUARE JOINT VENTURE
The Partnership owns a 65% interest in Corinth Square, a joint venture with
United Investors Income Properties, an affiliated partnership, in which the
General Partner is also the sole general partner. The joint venture owns a
24,000 square foot medical office building located in Prairie Village, Kansas.
Corinth Square is accounted for using the equity method of accounting.
The Partnership advanced approximately $3,000 during the three months ended
March 31, 1999, to Corinth Square.
The condensed balance sheet of Corinth Square at March 31, 1999, is summarized
as follows (in thousands):
Assets
Commercial property, net $1,741
Other assets 166
Total $1,907
Liabilities and Partners' Capital
Liabilities $ 48
Partners' capital 1,859
Total $1,907
Condensed statements of operations of Corinth Square for the three months ended
March 31, 1999 and 1998, are as follows (in thousands):
1999 1998
Revenue $ 99 $ 89
Costs and expenses 73 85
Net income $ 26 $ 4
NOTE D - INVESTMENT IN COVINGTON PIKE JOINT VENTURE
As of December 31, 1992, the Partnership had advanced approximately $1,058,000
to the General Partner for the benefit of Covington Pike, which was a joint
venture between the General Partner and an unaffiliated party. On January 1,
1993, the General Partner assigned its interest in the joint venture to the
Partnership with no additional consideration beyond the funds advanced as of
December 31, 1992. The $1,058,000 consisted of land and building costs of
approximately $1,031,000 and cash of approximately $26,000. Capital contributed
by the unaffiliated partner was $82. Covington Pike is accounted for using the
equity method of accounting.
The Partnership received distributions of approximately $27,000 and $31,000
during the three months ended March 31, 1999 and 1998, respectively, from
Covington Pike.
The condensed balance sheet of Covington Pike at March 31, 1999, is summarized
as follows (in thousands):
Assets
Commercial property, net $ 822
Other assets 55
Total $ 877
Liabilities and Partners' Capital
Liabilities $ 69
Partners' capital 808
Total $ 877
Condensed statements of operations of Covington Pike for the three months ended
March 31, 1999 and 1998, are as follows (in thousands):
1999 1998
Revenue $ 80 $ 82
Costs and expenses 51 31
Net income $ 29 $ 51
NOTE E - TRANSACTIONS WITH AFFILIATED PARTNERS
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all partnership activities.
The Partnership Agreement provides for certain payments to affiliates for
services and as reimbursement of certain expenses incurred by affiliates on
behalf of the Partnership. The following payments were made to affiliates of
the General Partner for the three months ended March 31, 1999 and 1998:
1999 1998
(in thousands)
Property management fees (included in operating
expenses) $ -- $ 2
Reimbursement for services of affiliates
(included in general and administrative
expenses) 8 6
During the three months ended March 31, 1998 affiliates of the General Partner
were entitled to varying percentages of gross receipts from all of the
Registrant's commercial properties as compensation for providing property
management services. These services were provided by affiliates of the General
Partner during the three months ended March 31, 1998 and were approximately
$2,000. Effective October 1, 1998 (the effective date of the Insignia Merger
(see "Note B")) these services for the commercial properties were provided by an
unrelated party.
An affiliate of the General Partner received reimbursement of accountable
administrative expenses amounting to approximately $8,000 and $6,000 for the
three months ended March 31, 1999 and 1998, respectively.
NOTE F - SEGMENT REPORTING
The Partnership has one reportable segment: commercial properties. The
Partnership's commercial property segment consists of two distribution
facilities in Chesapeake, Virginia and Columbia, South Carolina. The Partnership
leases these distribution facilities to a single tenant. The tenant is obligated
under its leases through the years 2000 and 2002 on the South Carolina and
Virginia properties, respectively.
The Partnership evaluates performance based on net income. The accounting
policies of the reportable segment are the same as those of the Partnership as
described in the Partnership's annual report on Form 10-KSB for the fiscal year
ended December 31, 1998.
The Partnership's reportable segment consists of investment properties that
offer similar products and services. Although each of the investment properties
is managed separately, they have been aggregated into one segment as they
provide services with similar types of products and customers.
Segment information for the three months ended March 31, 1999 and 1998 is shown
in the tables below (in thousands). The "Other" column includes Partnership
administration related items and income and expense not allocated to the
reportable segment.
1999 Commercial Other Totals
Rental income $ 130 $ -- $ 130
Other income -- 6 6
Depreciation 28 -- 28
General and administrative expense -- 33 33
Equity in net income of joint ventures -- 37 37
Segment profit 97 10 107
Total assets 3,547 2,907 6,454
1998 Commercial Other Totals
Rental income $ 127 $ -- $ 127
Other income -- 9 9
Depreciation 28 -- 28
General and administrative expense -- 16 16
Equity in net income of joint ventures -- 31 31
Segment profit 93 24 117
Total assets 3,585 2,812 6,397
NOTE G - LEGAL PROCEEDINGS
On July 30, 1998, certain entities claiming to own limited partnership interests
in certain limited partnerships whose general partners were, at the time,
affiliates of Insignia filed a complaint entitled Everest Properties, LLC. v.
Insignia Financial Group, Inc., et al. in the Superior Court of the State of
California, County of Los Angeles. The action involves 44 real estate limited
partnerships (including the Partnership) in which the plaintiffs allegedly own
interests and which Insignia Affiliates allegedly manage or control (the
"Subject Partnerships"). This case was settled on March 3, 1999. The
Partnership is responsible for a portion of the settlement costs. The expense
will not have a material effect on the Partnership's overall operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and the other filings with the
Securities and Exchange Commission made by the Registrant from time to time.
The discussion of the Registrant's business and results of operations, including
forward-looking statements pertaining to such matters, does not take into
account the effects of any changes to the Registrant's business and results of
operation. Accordingly, actual results could differ materially from those
projected in the forward-looking statements as a result of a number of factors,
including those identified herein.
The Partnership's investment properties consist of two distribution centers.
The Partnership's joint venture properties consist of an office building and a
mini-storage facility. The following table sets forth the average physical
occupancy of the properties for each of the three month periods ended March 31,
1999 and 1998:
Average Occupancy
1999 1998
Investment Properties
Keebler Distribution Center
Chesapeake, Virginia 100% 100%
Keebler Distribution Center
Columbia, South Carolina 100% 100%
Joint Venture Properties
Corinth Square Professional Building
Prairie Village, Kansas 90% 83%
Covington Pike
Memphis, Tennessee 99% 99%
The Keebler Company vacated the Columbia, South Carolina facility in January of
1996 and the Chesapeake, Virginia facility in August of 1996. The Keebler
Company has indicated its intentions to honor its financial obligations to the
Partnership. Keebler is obligated to continue paying rent on the vacated space
through the years 2000 (Columbia, South Carolina) and 2002 (Chesapeake,
Virginia). Should the tenant fail to honor its lease obligations, operating
results would be adversely affected. The tenant has thus far paid the scheduled
rental payments on the vacated facilities. In addition, Keebler, with approval
from the Partnership, entered into sub-lease agreements effective July 1, 1996
for the Columbia, South Carolina facility and January 1, 1998 for the
Chesapeake, Virginia facility. The new tenants are obligated to pay rent to
Keebler for the Columbia, South Carolina facility and the Chesapeake, Virginia
facility through December 31, 2000 and October 31, 2002, respectively.
The increase in occupancy at Corinth Square Professional Building is primarily
attributable to a new tenant occupying 1,240 square feet during the latter part
of 1998.
Results of Operations
The Partnership's net income for the three months ended March 31, 1999 was
approximately $107,000 as compared to approximately $117,000 for the three
months ended March 31, 1998. The decrease in net income is attributable to an
increase in total expenses. Total expenses increased primarily as a result of
an increase in general and administrative expenses. Partially offsetting this
decrease was an increase in equity in net income of joint ventures. The
increase in general and administrative expenses is primarily due to increases in
professional expenses associated with the oversight of the Partnership and legal
expenses associated with the settlement of the Everest lawsuit which was
disclosed in the Partnership's annual report on Form 10-KSB for fiscal year
ended December 31, 1998. Included in general and administrative expenses at
both March 31, 1999 and 1998 are management reimbursements to the General
Partner allowed under the Partnership Agreement. In addition, costs associated
with the quarterly and annual communications with investors and regulatory
agencies and the annual audit required by the Partnership Agreement are also
included.
The increase in equity in net income of joint ventures was due to increased net
income at Corinth Square which was partially offset by reduced net income at
Covington Pike. The increase in net income at Corinth Square was primarily due
to improved occupancy, higher average rental rates and reduced utility expenses.
The decrease in net income at Covington Pike is primarily due to increased real
estate tax expense due to the timing of receipt of the property tax bills for
1999 and 1998 which affected the accruals as of March 31, 1999 and 1998.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of each of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the General Partner attempts to protect the Partnership from the
burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
General Partner will be able to sustain such a plan.
Liquidity and Capital Resources
Exclusive of cash held by the joint ventures, at March 31, 1999, the Partnership
had cash and cash equivalents of approximately $917,000 as compared to
approximately $817,000 at March 31, 1998. The increase in cash and cash
equivalents for the three months ended March 31, 1999, from the Partnership's
year ended December 31, 1998, was approximately $108,000. This increase is due
to approximately $84,000 of cash provided by operating activities and
approximately $24,000 of cash provided by investing activities. Cash provided
by investing activities consisted of distributions from the joint ventures, net
of advances. The Partnership invests its working capital reserves in money
market accounts.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and other operating needs of the Partnership and to comply with Federal,
state and local legal and regulatory requirements. During the three months ended
March 31, 1999 the Partnership did not complete any capital improvements at
either of its commercial properties, nor has it budgeted any capital
improvements for the properties in 1999.
The Registrant's current assets are thought to be sufficient for any near-term
needs of the Registrant.
During the three months ended March 31, 1998 the Partnership made a distribution
of cash generated from operations of approximately $141,000. In March 1999, the
Partnership declared and accrued a distribution of cash generated from
operations of approximately $141,000, which was paid in April 1999. The
Partnership's distribution policy is reviewed on a quarterly basis. Future cash
distributions will depend on the levels of net cash generated from operations,
property sales, financings, and the availability of cash reserves. There can be
no assurance, however, that the Partnership will generate sufficient funds from
operations to permit additional distributions to its partners in 1999 or
subsequent periods.
Year 2000 Compliance
General Description of the Year 2000 Issue and the Nature and Effects of the
Year 2000 on Information Technology (IT) and Non-IT Systems
The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. The Partnership
is dependent upon the General Partner and its affiliates for management and
administrative services ("Managing Agent"). Any of the computer programs or
hardware that have date-sensitive software or embedded chips may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
Over the past two years, the Managing Agent has determined that it will be
required to modify or replace significant portions of its software and certain
hardware so that those systems will properly utilize dates beyond December 31,
1999. The Managing Agent presently believes that with modifications or
replacements of existing software and certain hardware, the Year 2000 issue can
be mitigated. However, if such modifications and replacements are not made, or
not completed in time, the Year 2000 issue could have a material impact on the
operations of the Partnership.
The Managing Agent's plan to resolve Year 2000 issues involves four phases:
assessment, remediation, testing, and implementation. To date, the Managing
Agent has fully completed its assessment of all the information systems that
could be significantly affected by the Year 2000, and has begun the remediation,
testing and implementation phases on both hardware and software systems.
Assessments are continuing in regards to embedded systems. The status of each
is detailed below.
Status of Progress in Becoming Year 2000 Compliant, Including Timetable for
Completion of Each Remaining Phase
Computer Hardware:
During 1997 and 1998, the Managing Agent identified all of the computer systems
at risk and formulated a plan to repair or replace each of the affected systems.
In August 1998, the mainframe system used by the Managing Agent became fully
functional. In addition to the mainframe, PC-based network servers, routers and
desktop PCs were analyzed for compliance. The Managing Agent has begun to
replace each of the non-compliant network connections and desktop PCs and, as of
March 31, 1999, had completed approximately 75% of this effort.
The total cost to the Managing Agent to replace the PC-based network servers,
routers and desktop PCs is expected to be approximately $1.5 million of which
$1.3 million has been incurred to date. The remaining network connections and
desktop PCs are expected to be upgraded to Year 2000 compliant systems by July
31, 1999.
Computer Software:
The Managing Agent utilizes a combination of off-the-shelf, commercially
available software programs as well as custom-written programs that are designed
to fit specific needs. Both of these types of programs were studied, and
implementation plans written and executed with the intent of repairing or
replacing any non-compliant software programs.
During 1998, the Managing Agent began converting the existing property
management and rent collection systems to its management properties Year 2000
compliant systems. The estimated additional costs to convert such systems at
all properties, is $200,000, and the implementation and the testing process is
expected to be completed by July 31, 1999.
The final software area is the office software and server operating systems.
The Managing Agent has upgraded all non-compliant office software systems on
each PC and has upgraded 80% of the server operating systems. The remaining
server operating systems are planned to be upgraded to be Year 2000 compliant by
July 31, 1999.
Operating Equipment:
The Managing Agent has operating equipment, primarily at the property sites,
which needed to be evaluated for Year 2000 compliance. In September 1997, the
Managing Agent began taking a census and inventory of embedded systems
(including those devices that use time to control systems and machines at
specific properties, for example elevators, heating, ventilating, and air
conditioning systems, security and alarm systems, etc.).
The Managing Agent has chosen to focus its attention mainly upon security
systems, elevators, heating, ventilating and air conditioning systems, telephone
systems and switches, and sprinkler systems. While this area is the most
difficult to fully research adequately, management has not yet found any major
non-compliance issues that put the Managing Agent at risk financially or
operationally. The Managing Agent intends to have a third-party conduct an
audit of these systems and report their findings by July 31, 1999.
Any of the above operating equipment that has been found to be non-compliant to
date has been replaced or repaired. To date, these have consisted only of
security systems and phone systems. As of March 31, 1999 the Managing Agent has
evaluated approximately 86% of the operating equipment for the Year 2000
compliance.
The total cost incurred for all properties managed by the Managing Agent as of
March 31, 1999 to replace or repair the operating equipment was approximately
$400,000. The Managing Agent estimates the cost to replace or repair any
remaining operating equipment is approximately $325,000, which is expected to be
completed by August 30, 1999.
The Managing Agent continues to have "awareness campaigns" throughout the
organization designed to raise awareness and report any possible compliance
issues regarding operating equipment within its enterprise.
Nature and Level of Importance of Third Parties and Their Exposure to the Year
2000
The Managing Agent continues to conduct surveys of its banking and other vendor
relationships to assess risks regarding their Year 2000 readiness. The Managing
Agent has banking relationships with three major financial institutions, all of
which have indicated their compliance efforts will be complete before May 1999.
The Managing Agent has updated data transmission standards with two of the three
financial institutions. The Managing Agent's contingency plan in this regard is
to move accounts from any institution that cannot be certified Year 2000
compliant by June 1, 1999.
The Partnership does not rely heavily on any single vendor for goods and
services, and does not have significant suppliers and subcontractors who share
information systems (external agent). To date the Partnership is not aware of
any external agent with a Year 2000 compliance issue that would materially
impact the Partnership's results of operations, liquidity, or capital resources.
However, the Partnership has no means of ensuring that external agents will be
Year 2000 compliant.
The Managing Agent does not believe that the inability of external agents to
complete their Year 2000 remediation process in a timely manner will have a
material impact on the financial position or results of operations of the
Partnership. However, the effect of non-compliance by external agents is not
readily determinable.
Costs to Address Year 2000
The total cost of the Year 2000 project to the Managing Agent is estimated at
$3.5 million and is being funded from operating cash flows. To date, the
Managing Agent has incurred approximately $2.8 million ($0.6 million expensed
and $2.2 million capitalized for new systems and equipment) related to all
phases of the Year 2000 project. Of the total remaining project costs,
approximately $0.5 million is attributable to the purchase of new software and
operating equipment, which will be capitalized. The remaining $0.2 million
relates to repair of hardware and software and will be expensed as incurred.
The Partnership's portion of these costs are not material.
Risks Associated with the Year 2000
The Managing Agent believes it has an effective program in place to resolve the
Year 2000 issue in a timely manner. As noted above, the Managing Agent has not
yet completed all necessary phases of the Year 2000 program. In the event that
the Managing Agent does not complete any additional phases, certain worst case
scenarios could occur. The worst case scenarios could include elevators,
security and heating, ventilating and air conditioning systems that read
incorrect dates and operate with incorrect schedules (e.g., elevators will
operate on Monday as if it were Sunday). Although such a change would be
annoying to residents, it is not business critical.
In addition, disruptions in the economy generally resulting from Year 2000
issues could also adversely affect the Partnership. The Partnership could be
subject to litigation for, among other things, computer system failures,
equipment shutdowns or failure to properly date business records. The amount of
potential liability and lost revenue cannot be reasonably estimated at this
time.
Contingency Plans Associated with the Year 2000
The Managing Agent has contingency plans for certain critical applications and
is working on such plans for others. These contingency plans involve, among
other actions, manual workarounds and selecting new relationships for such
activities as banking relationships and elevator operating systems.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On July 30, 1998, certain entities claiming to own limited partnership interests
in certain limited partnerships whose general partners were, at the time,
affiliates of Insignia filed a complaint entitled Everest Properties, LLC. v.
Insignia Financial Group, Inc., et al. in the Superior Court of the State of
California, County of Los Angeles. The action involves 44 real estate limited
partnerships (including the Partnership) in which the plaintiffs allegedly own
interests and which Insignia Affiliates allegedly manage or control (the
"Subject Partnerships"). This case was settled on March 3, 1999. The
Partnership is responsible for a portion of the settlement costs. The expense
will not have a material effect on the Partnership's overall operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27 - Financial Data Schedule, is filed as an exhibit to this
report.
b) Reports on Form 8-K:
None filed during the quarter ended March 31, 1999.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
UNITED INVESTORS INCOME PROPERTIES II
By: United Investors Real Estate, Inc.
Its General Partner
By: /s/ Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/ Carla R. Stoner
Carla R. Stoner
Senior Vice President Finance and
Administration
Date: May 12, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from United
Investors Income Properties II 1999 First Quarter 10-QSB and is qualified in its
entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000862028
<NAME> UNITED INVESTORS INCOME PROPERTIES II
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 917
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 4,117
<DEPRECIATION> 780
<TOTAL-ASSETS> 6,454
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 6,300
<TOTAL-LIABILITY-AND-EQUITY> 6,454
<SALES> 0
<TOTAL-REVENUES> 136
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 66
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 107
<EPS-PRIMARY> 3.25<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
