SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended September 30, 2000 Commission file number 2-90654
AMRECORP REALTY FUND II
(Exact name of registrant as specified in its charter)
TEXAS 75-1956009
(State or other jurisdiction of (IRS Employer
incorporation or organization Identification number)
6210 Campbell Road Suite 140
Dallas, Texas 75248
(Address of principal executive offices)
Registrant's telephone number, including area code: (972)380-8000.
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: Y No:
REGISTRANT IS A LIMITED PARTNERSHIP
TABLE OF CONTENTS
Item 1. Financial Statements
The following Unaudited financial statements are filed herewith:
Consolidated Balance Sheet as of September 30, 2000 and
December 31, 1999. Page 3
Consolidated Statements of Operations for the Three months
and Nine Months Ended September 30, 2000 and 1999. Page 4
Consolidated Statements of Cash Flows for the Nine months
Ended September 30, 2000 and 1999. Page 5
Item 2. Results of Operations and Management's Discussion and
Analysis of Financial Condition Page 6
Liquidity and Capital Resources Page 7
Other Information Page 8
Signatures Page 9
The statements, insofar as they relate to the period subsequent
to December 31, 1999 are Unaudited.
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
AMRECORP REALTY FUND II
Condensed Consolidated Balance Sheets
September 30,2000 December 31,1999
(Unaudited)
ASSETS
Real Estate assets, at cost $580,045 $580,045
Land 4,617,978 4,617,978
Buildings and improvements 5,198,023 5,198,023
Less: Accumulated depreciation (3,073,170) (2,923,170)
Real estate, net 2,124,853 2,274,853
Investments in Real Estate Held
for Sale
Cash including cash investments 156,515 378,479
Escrow deposits 211,113 205,850
Deferred Costs and Fees 41,850 35,352
Other assets 1,150 6,681
Total assets $2,535,481 $2,901,215
LIABILITIES AND PARTNERS'
EQUITY:
LIABILITIES:
Mortgage and notes payable $2,292,309 $2,325,774
Payable to Affiliates 1,715 977
Interest payable 0 18,161
Real estate taxes payable 71,836 0
Security deposits 18,350 18,901
Accounts payable and accrued 74,269 130,174
expenses
Total liabilities 2,458,479 2,493,987
PARTNERS CAPITAL (DEFICIT):
Limited Partners 165,843 496,403
General Partners (88,841) (89,175)
Total Partners Capital(Deficit) 77,002 407,228
Total
Liability and Partners Equity $2,535,481 $2,901,215
See notes to Condensed Consolidated Financial Statements
AMRECORP REALTY FUND II
Condensed Consolidated Statement of Operations
(Unaudited)
REVENUES Three Month Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Rental income $212,307 $203,019 $625,342 $597,940
Other property 5,503 6,343 25,744 19,722
Total Revenues 217,810 209,362 651,086 617,622
EXPENSES
Salaries & wages 19,794 15,576 55,476 46,486
Maintenance & repairs 15,101 16,904 45,709 44,683
Utilities 7,299 7,447 20,834 20,890
Real estate taxes 24,334 21,417 71,836 61,917
General administrative 12,122 19,213 32,994 52,152
Contract services 9,786 9,868 29,453 30,204
Insurance 4,667 3,767 12,507 11,017
Interest 53,634 54,590 161,802 164,410
Depreciation and 50,000 48,000 150,000 144,000
amortization
Property management 10,806 10,368 31,973 30,532
fees
Amortization of deferred 1,711 1,711 5,132 5,132
costs and fees
Total expenses 209,254 208,861 617,716 611,423
NET INCOME (LOSS) $8,556 $501 $33,370 $6,239
NET INCOME PER SHARE $ 0.59 $ 0.03 $ 2.29 $ 0.43
See Notes to Condensed Consolidated Financial Statements
AMRECORP REALTY FUND II
Condensed Consolidated Statement of Cash Flows
Unaudited
Nine Months Ended
September 30,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITY
Net income (loss) $33,370 $6,239
Adjustments to reconcile net income
(loss)to net cash provided by
operating activities:
Depreciation and amortization 150,000 144,000
Gain on Sale of Asset 0 0
Net Effect of changes in operating
accounts
Escrow deposits (5,263) (3,438)
Deferred Costs (6,498) (2,785)
Accrued real estate taxes 71,836 61,887
Security deposits (551) 1,556
Accounts payable (55,905) (42,138)
Other assets 5,535 5,402
Net cash used by operating 192,524 170,723
activities
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used by operating 0 0
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of mortgage notes payable (33,465) (30,443)
Distribution to Limited Partners (363,600) 0
Proceeds from amounts due affiliates 738 (605)
Increase in accrued interest (18,161) (18,384)
Net cash provided by investing (414,488) (49,432)
activities
NET INCREASE (DECREASE)IN CASH AND (221,964) 121,291
CASH RQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF 378,479 217,493
PERIOD
CASH AND CASH EQUIVALENT, END OF PERIOD $156,515 $338,784
See Notes to Condensed Consolidated Financial Statements
Basis of Presentation:
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations, although the Partnership believes that the disclosures are
adequate to make the information presented not misleading. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and notes thereto included in the Partnership's latest
annual report on Form 10-K.
Item 2. RESULTS OF OPERATIONS AND MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
Results of Operations
At September 30, 2000 the Partnership owned one property, Chimney Square
Apartments located in Abilene Texas with approximately 126,554 net rentable
square feet.
The occupancy of Chimney Square averaged 97.4% during the third quarter of
2000 as compared to 97.7% for the third quarter of 1999.
THIRD QUARTER 2000 COMPARED TO THIRD QUARTER 1999
Revenue from property operations increased $8,448 or 4.04%, for the third
quarter of 2000, as compared to the 1999 third quarter. The increase in
rental income of $9,288 or 4.57% is primarily due to higher rental rates.
Other income decreased $840 or 13.24% primarily due to decreased late
charges and other fees. The following table illustrates the components:
Increase Per Cent
(Decrease) Change
Rental income $9,288 4.57%
Other property (840) 13.24%
$8,448 4.04%
Property operating expenses increased $393 or 0.19%, for the third quarter
of2000, as compared to the same period in 1999. This was primarily due from
decreased general and administrative. General and administrative costs
decreased $7,091 or 36.91% from decreases in postage related mailings.
Maintenance & repairs decreased $1,803 or 10.67% due to reduced turnover of
residents. Real estate taxes increased $2,917 or 13.62% primarily due to
increased assessments on the property. Insurance increased $900 or 23.89%
with the annual policy renewal. The following table illustrates the
components by category:
Increase Per Cent
(Decrease) Change
Salaries & wages $4,218 27.08%
Maintenance & repairs (1,803) 10.67%
Utilities (148) 1.99%
Real estate taxes 2,917 13.62%
General administrative (7,091) 36.91%
Contract services (82) 0.83%
Insurance 900 23.89%
Interest (956) 1.75%
Depreciation and amortization 2,000 4.17%
Property management fees 438 4.22%
Net Increase (Decreased) $393 0.19%
FIRST NINE MONTHS 2000 COMPARED TO FIRST NINE MONTHS 1999
Revenue from property operations increased $33,424 or 5.41%, for the first
nine months of 2000, as compared to the 1999 first nine months. The increase
in rental income of $27,402 or 4.58% is primarily due to higher rental rates.
Other income increased $6,022 or 30.53% primarily due to increased late
charges and other fees. The following table illustrates the components:
Increase PerCent
(Decrease) Change
Rental income $27,402 4.58%
Other property 6,022 30.53%
$33,424 5.41%
Property operating expenses increased $6,293 or 1.03%, for the first nine
months quarter of 2000, as compared to the same period in 1999. This was
primarily due from decreased general and administrative costs which dropped
$19,158 or 36.73% from decreases in postage related mailings. Salaries &
wages increased $8,990 or 19.34% due to increased staff levels. Real estate
taxes increased $9,919 or 19.34% due to higher property value assesments.
Insurance increased $1,490 or 13.52% with the anuaul policy renewal.
Maintenance and repairs increased $1,026 or 2.30% from higher turnover of
residents. The following table illustrates the components by category:
Increase Per Cent
(Decrease) Change
Salaries & wages $8,990 19.34%
Maintenance & repairs 1,026 2.30%
Utilities (56) 0.27%
Real estate taxes 9,919 16.02%
General administrative (19,158) 36.73%
Contract services (751) 2.49%
Insurance 1,490 13.52%
Interest (2,608) 1.59%
Depreciation and amortization 6,000 4.17%
Property management fees 1,441 4.72%
Net Increase (Decrease) $6,293 1.03%
LIQUIDITY AND CAPITAL RESOURCES
While it is the General Partners primary intention to operate and manage
the existing real estate investments, the General Partner also continually
evaluates this investment in light of current economic conditions and trends
to determine if these assets should be considered for disposal. Accordingly,
in 1996 the Partnership sold its investment in the shopping center located
in Lancaster, Texas, recognizing a loss of $10,177. Shorewood Apartments,
an apartment complex located in Charlotte, North Carolina was sold in
January 1997. Net proceeds from the sale was 1.3 million dollars resulting
in cash distribution of $100.00 per unit.
As of September 30, 2000, the Partnership had $153,511 in cash and cash
equivalents as compared to $378,479 as of December 31, 1999. The net
decrease in cash of $224,968 is principally due to partnership distributions.
The property is encumbered by non-recourse mortgage as of September 30, 2000
with an interest rate of 9.325%. Required principal payments on this
mortgage note for the three years ended December 31, 2002 are $40,717,
$44,680, and $49,029 respectively.
For the foreseeable future, the Partnership anticipates that mortgage
principal payments (excluding balloon mortgage payments), improvements and
capital expenditures will be funded by the net cash from operations. The
primary source of capital to fund furture Partnership acquisitions and
balloon mortgage payments will be proceeds from the sale, financing or
refinancing of properties.
On February 7, 1995 the Partnership refinanced the loan on Chimney Square
Apartments. The original loan matured and a new $2,475,000 loan bearing
interest at 9.325% per year was secured from Newport Mortgage Company L.P.
The loan matures on March 1, 2005. In connection with this loan, the lender
required, and the Partnership provided, a new single asset partnership known
as Chimney Square Apartments, owned 99% by the Fund.
In February, 1991, Amrecorp Realty Inc., resigned as the Managing General
Partner of the Partnership. As was communicated to all limited partners,
this step was taken in order to minimize any effect that Amrecorp's
financial difficulties might have on the partnership. Management of the
Partnership's assets is performed by Univesco, Inc., a Texas corporation,
Rober J. Werra, CEO.
Management intends to continue operating the Partnership in its present form
while investigating options to improve operations of the Partnership.
Part II
Other Information
Item 1. Legal Proceedings
See Part I Item 2. Management's Discussion
and Analysis of Financial Conditions and
Results of Operations.
Item 2. Changes in Securities.
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matter to a Vote of
Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
None.
(A)The following documents are filed herewith or incorporated
herein by reference as indicated as Exhibits:
Exhibit Designation Document Description
Limited Partnership Agreement
incorporated by reference to Registration
Statement No. 2-90654 effective July 6, 1984.
Limited Partnership Agreement
incorporated by reference to Registration
Statement No. 2-90654 effective July 6, 1984.
11 Not Applicable
15 Not Applicable
18 Not Applicable
19 Not Applicable
20 Not Applicable
23 Not Applicable
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.
AMRECORP REALTY FUND II
a Texas limited partnership
By: /s/ Robert J. Werra
Robert J. Werra,
General Partner
Date: November 1, 2000
[ARTICLE] 5
[LEGEND]
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BOTH
THE SEPTEMBER 30, 2000 BALANCE SHEET AND STATEMENT OF INCOME AND EXPENSES
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
[/LEGEND]
[CIK] 0000745061
[NAME] AMRECORP REALTY FUND II
[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] DEC-31-2000
[PERIOD-END] SEP-30-2000
[CASH] 156,515
[SECURITIES] 0
[RECEIVABLES] 0
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 0
[PP&E] 5,198,023
[DEPRECIATION] 3,073,170
[TOTAL-ASSETS] 2,535,481
[CURRENT-LIABILITIES] 0
[BONDS] 2,292,309
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 0
[OTHER-SE] 77,002
[TOTAL-LIABILITY-AND-EQUITY] 2,535,481
[SALES] 0
[TOTAL-REVENUES] 217,810
[CGS] 0
[TOTAL-COSTS] 0
[OTHER-EXPENSES] 155,620
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 53,634
[INCOME-PRETAX] 0
[INCOME-TAX] 0
[INCOME-CONTINUING] 0
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 8,556
[EPS-BASIC] 0.59
[EPS-DILUTED] 0