<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of
The Securities Exchange Act of 1934
for the Quarterly Period ended March 31, 1998
Commission File No. 0-19963
TMP INLAND EMPIRE II, LTD.
A CALIFORNIA LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
CALIFORNIA 33-0311624
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
801 North Parkcenter Drive, Suite 235 92705
Santa Ana, California (Zip Code)
(Address of principal executive office)
(714) 836-5503
(Registrant's telephone number, including area code)
----------------------
Indicate by check mark whether Registrant has [1] 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 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 [ ]
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The following financial statements are filed as a part of this Form 10-Q:
Balance Sheets as of March 31, 1998 and December 31, 1997,
Statement of Income for the Three Months ended March 31, 1998 and 1997,
Statements of Cash Flows for the Three Months ended March 31, 1998 and 1997.
The accompanying unaudited interim financial statements include all adjustments
(consisting solely of normal recurring adjustments) which are, in the opinion of
management, necessary to fairly present the financial position of the
Partnership as of March 31, 1998 and the results of its operations, changes in
partners' equity, and cash flows for the period then ended.
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TMP INLAND EMPIRE II, LTD.
A California Limited Partnership
Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
----------- -----------
<S> <C> <C>
Assets
Cash $ 50 $ 2,004
Investment In Unimproved Land 2,719,123 2,715,000
----------- -----------
Total Assets $ 2,719,173 $ 2,717,004
=========== ===========
Liabilities and Partners Capital
Accounts Payable and Accrued
Liabilities $ 4,527 $ 1,562
Commission Payable 90,000 90,000
Franchise Tax Payable 0 800
----------- -----------
Total Liabilities 94,527 92,362
Partners' Capital
General Partners (38,336) (38,336)
Limited Partners 7,250 equity
units authorized and outstanding 2,662,982 2,662,978
----------- -----------
Total Partners Capital 2,624,646 2,624,642
Total Liablilities and
Partners' Capital $ 2,719,173 $ 2,717,004
=========== ===========
</TABLE>
<PAGE> 4
TMP INLAND EMPIRE II, LTD.
A California Limited Partnership
Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31 March 31
1998 1997
<S> <C> <C>
Land Sales $ 0 $ 0
Cost of Land Sales $ 0 $ 0
---------------------------
Gross Profit $ 0 $ 0
Interest and Other Income $ 3 $ 117
---------------------------
Amortization $ 0 $ 0
---------------------------
Net Income $ 3 117
---------------------------
Allocation of Net Income Loss)
(Note 2)
General Partners $ 0 $ 1
Limited Partners $ 3 $ 116
Limited Partners, per unit $ 0.00 $ 0.02
</TABLE>
<PAGE> 5
TMP INLAND EMPIRE II, LTD.
A California Limited Partnership
Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, March 31,
1998 1997
----------- -----------
<S> <C> <C>
Operating Activities:
Net Income (Loss) $ 3 $ 117
Add Non-Cash Items:
Amortization 0 0
Changes In:
Accounts Payable 2,165 2,499
Commissions Payable 0 0
Net Cash Provided by (Used In)
Operating Activities 0 0
Investing Activities:
Investment in Land
Net Cash Provided by (Used In)
Investing Activities (4,122) (9,873)
Financing Activities
Net Cash Provided by (Used In) 0 0
Financing Activities
Increase (Decrease) In Cash $(1,954) $(7,257)
-------- -------
Beginning Cash $ 2,004 $23,477
Ending Cash $ 50 $16,220
-------- -------
</TABLE>
<PAGE> 6
TMP INLAND EMPIRE II, LTD
a California Limited Partnership
Notes to the Financial Statements
For the Three Months Ended March 31, 1998
(Unaudited)
NOTE 1 - Summary of Significant Accounting Policies
Accounting Method - TMP Inland Empire II, Ltd. (the Partnership) prepares its
financial statements on the accrual basis of accounting.
Organization Costs - Organization costs include expenses incurred in the
formation of the Partnership that have been capitalized and that have been
amortized over a period of 40 years prior to 1992 and are being amortized over
five years beginning in 1992. These organization cost have been completely
amortized as of 1997.
Investment in Unimproved Land - The Partnership's land is stated at the lower of
actual cost or market value, based on specific identification. All costs
associated with the acquisition of a property are capitalized. In addition, the
Partnership capitalizes all carrying costs.
Income Taxes - The entity is treated as a partnership for income tax purposes
and any income or loss is passed through and taxable at the partner level.
Accordingly, no provision for federal income taxes is provided.
NOTE 2 - Allocation of Profits, Losses and Cash Distributions
Profits, losses, and cash distributions are allocated 99 percent to the limited
partners and one percent to the general partners until the limited partners have
received an amount equal to their capital contributions plus a cumulative,
non-compounded return of six percent per annum based on their adjusted capital
account balances. At that point, remaining profits, losses and cash
distributions are allocated 85 percent to the limited partners and 15 percent to
the general partners.
As of March 31, 1998 and 1997, profits, losses and cash distributions were
allocated 99 percent to the limited partners and one percent to the general
partners.
NOTE 3 - Commissions Payable
As of March 31, 1998 and 1997, the Partnership had a payable to a related party
for services rendered relating to sales of properties prior to 1990.
<PAGE> 7
TMP INLAND EMPIRE II, LTD.
a California Limited Partnership
For the Three Months Ended March 31, 1998
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Partnership revenues during the three month periods ended March 31, 1998 and
1997 consisted primarily of interest earned on funds held in reserve. No
properties were sold during the periods presented.
Investing activities for the three months ended March 31, 1998 and 1997 used
approximately $4,000 and $10,000, respectively, most of which was used to pay
development and carrying costs of the land held for investment.
The Partnership had one property at March 31, 1998 that is being held for
appreciation and resale. Upon the sale of the property, the Partnership intends
to distribute the sales proceeds, less any reserves needed for winding up
partnership operations, to the partners.
Management believes that cash reserves as of March 31, 1998 are insufficient to
meet the anticipated cash requirements of the Partnership for the next twelve
months. If the Partnership is unable to sell the remaining parcel of land, the
Partnership can obtain a loan secured by the land or withhold payment of certain
expenses such as property taxes or expense reimbursements to the general
partners.
<PAGE> 8
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.
Date: May 11, 1998
TMP INLAND EMPIRE II, LTD.
a California Limited Partnership
By: TMP Investments, Inc., as General Partner
By: \s\ William O. Passo
--------------------------------------------
William O. Passo, President
By: \s\ Anthony W. Thompson
--------------------------------------------
Anthony W. Thompson, Exec. V.P.
By: TMP Properties, a California General
Partnership as General Partner
By: \s\ William O. Passo
--------------------------------------------
William O. Passo, General Partner
By: \s\ Anthony W. Thompson
--------------------------------------------
Anthony W. Thompson, General Partner
By: \s\ Scott E. McDaniel
--------------------------------------------
Scott E. McDaniel
<PAGE> 9
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 50
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 2,719,123
<CURRENT-ASSETS> 2,719,173
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,719,173
<CURRENT-LIABILITIES> 94,527
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,624,646
<TOTAL-LIABILITY-AND-EQUITY> 2,719,173
<SALES> 0
<TOTAL-REVENUES> 3
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3
<INCOME-TAX> 0
<INCOME-CONTINUING> 3
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
