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 March 31, 2001 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 Identification Number)
incorporation or organization
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 March 31, 2001 and
December 31, 2000 Page 3
Consolidated Statements of Operations for the Three months
Ended March 31, 2001 and 2000 Page 4
Consolidated Statements of Cash Flows for the Three months
Ended March 31, 2001 and 2000 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, 2000 are Unaudited.
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
AMRECORP REALTY FUND II
Condensed Consolidated Balance Sheets
March 31, December 31,
2001 2000
(Unaudited)
ASSETS
Real Estate assets, at cost $580,045 $580,045
Land 4,653,056 4,653,056
Buildings and improvements 5,233,101 5,233,101
Less: Accumulated (3,162,199) (3,114,199)
depreciation
Real estate, net 2,070,902 2,118,902
Investments in Real Estate
Held for Sale
Cash including cash investments 251,428 210,193
Escrow deposits 164,232 220,453
Deferred Costs and Fees 26,799 28,509
Other assets 3,348 7,961
Total assets $2,516,709 $2,586,018
LIABILITIES AND PARTNERS'EQUITY:
LIABILITIES:
Mortgage and notes payable $2,270,623 $2,285,057
Payable to Affiliates 969 0
Interest payable 0 17,757
Real estate taxes payable 25,515 0
Security deposits 19,451 18,301
Accounts payable and accrued expenses 68,149 143,975
Total liabilities 2,384,707 2,465,090
PARTNERS CAPITAL (DEFICIT):
Limited Partners 213,336 202,373
General Partners (81,334) (81,445)
Total Partners Capital 132,002 120,928
(Deficit)
Total Liability and Prtners Equity $2,516,709 $2,586,018
See notes to Condensed Consolidated Financial Statements
AMRECORP REALTY FUND II
Condensed Consolidated Statement of Operations
(Unaudited)
Three Months Ended
March 31,
REVENUES 2001 2000
Rental income $205,751 $201,314
Other property 6,685 7,058
Total revenues 212,436 208,372
EXPENSES
Salaries & wages 19,323 19,114
Maintenance & repairs 13,539 13,094
Utilities 8,426 6,994
Real estate taxes 25,500 23,751
General administrative 6,215 6,810
Contract services 10,421 9,873
Insurance 4,614 3,770
Interest 53,103 54,144
Depreciation and amortization 48,000 50,000
Property management fees 10,510 10,257
Amortization of deferred costs 1,711 1,711
and fees
Total expenses 201,362 199,518
NET INCOME (LOSS) $11,074 $8,854
NET INCOME PER SHARE $0.76 $0.61
See Notes to Condensed Consolidated Financial Statements
AMRECORP REALTY FUND II
Condensed Consolidated Statement of Cash Flows
(Unaudited)
Three Months Ended
March 31,
2001 2000
CASH FLOWS FROM OPERATING ACTIVITY
Net income (loss) $11,074 $8,854
Adjustments to reconcile net income (loss) to
net cash
provided by operating activities:
Depreciation and amortization 48,000 50,000
Net Effect of changes in operating accounts
Escrow deposits 56,221 55,745
Deferred Costs 1,710 1,711
Accrued real estate taxes 25,515 23,751
Security deposits 1,150 (200)
Accounts payable (75,826) (63,663)
Other assets 4,613 3,770
Net cash used by operating activities 72,457 79,968
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used by operating activities 0 0
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of mortgage notes payable (14,434) (12,990)
Distribution to Limited Partners 0 0
Proceeds from amounts due affiliates 969 2,579
Increase in accrued interest (17,757) (18,161)
Net cash provided by investing activities (31,222) (28,572)
NET INCREASE (DECREASE) IN CASH AND CASH 41,235 51,396
EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 210,193 378,479
CASH AND CASH EQUIVALENT, END OF PERIOD $251,428 $429,875
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 March 31, 2001 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 95.1% during the first
quarter of 2001 as compared to 98.4% for the first quarter of
2000.
FIRST QUARTER 2001 COMPARED TO FIRST QUARTER 2000
Revenue from property operations increased $4,064 or 1.95%, for
the first quarter of 2001, as compared to the 2000 first
quarter. The increase in rental income of $4,437 or 2.20% is
primarily due to higher rental rates. Other income decreased
$373 or 5.28% primarily due to decreased late charges and other
fees. The following table illustrates the components:
Increase Percent
(Decrease) Change
Rental income $4,437 2.20%
Other property (373) 5.28%
$4,064 1.95%
Property operating expenses increased $1,844 or .92%, for the
first quarter of 2001, as compared to the same period in 2000.
This was primarily due from increased insurance expense.
Insurance costs increased $844 or 22.39% from increased
premiums. Utilities increased $1,432 or 20.47% due to higher
gas costs. The following table illustrates the components by
category:
Increase Percent
(Decrease) Change
Salaries & wages $209 1.09%
Maintenance & repairs 445 3.40%
Utilities 1,432 20.47%
Real estate taxes 1,749 7.36%
General administrative (595) 8.74%
Contract services 548 5.55%
Insurance 844 22.39%
Interest (1,041) 1.92%
Depreciation and amortization (2,000) 4.00%
Property management fees 253 2.47%
Net Increase (Decrease) $1,844 0.92%
FIRST QUARTER 2000 COMPARED TO FIRST QUARTER 1999
Revenue from property operations increased $5,308 or 2.61%, for
the first quarter of 2000, as compared to the 1999 first
quarter. The increase in rental income of $3,806 or 1.93% is
primarily due to increased occupancy and higher rental rates.
Other income increased $1,502 or 27.03% primarily due to
increased late charges and other fees. The following table
illustrates the components:
Increase Percent
(Decrease) Change
Rental income $3,806 1.93%
Other property 1,502 27.03%
$5,308 2.61%
Property operating expenses decreased $6,849 or 3.32%, for the
first quarter of 2000, as compared to the same period in 1999.
This was primarily due from decreased general and
administrative costs which dropped $15,506 or 69.48% from
decreases in postage related mailings. Salaries & wages
increased $6,374 or 50.03% due to increased staff levels. Real
estate taxes increased $3,501 or 17.29% due to higher property
value assessments. Maintenance and repairs decreased $2,025 or
13.39% from lower turnover of residents. The following table
illustrates the components by category:
Increase Percent
(Decrease) Change
Salaries & wages $6,374 50.03%
Maintenance & repairs (2,025) 13.39%
Utilities 114 1.66%
Real estate taxes 3,501 17.29%
General administrative (15,506) 69.48%
Contract services (731) 6.89%
Insurance 129 3.54%
Interest (871) 1.58%
Depreciation and amortization 2,000 4.17%
Property management fees 166 1.65%
Net Increase (Decrease) ($6,849) 3.32%
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 March 31, 2001, the Partnership had $251,428 in cash and
cash equivalents as compared to $210,193 as of December 31
2000. The net increase in cash of $41,235 is principally due
to partnership distributions.
The property is encumbered by non-recourse mortgage as of March
31, 2001, with an interest rate of 9.325%. Required principal
payments on this mortgage note for the three years ended
December 31, 2003, are $44,680, $49,029 and $53,082
respectively.
For the foreseeable future, the Partnership anticipates that
mortgage principal payments (excluding balloon mortgage
payments), improvements and capital expenditures will be funded
by net cash from operations. The primary source of capital to
fund future Partnership acquisitions and balloon mortgage
payments will be proceeds from the sale, financing or
refinancing of the 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, Robert 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: May 1, 2000