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 September 30, 2000
[ ] 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 0-15758
JACQUES-MILLER INCOME FUND, L.P. - II
(Exact name of small business issuer as specified in its charter)
Delaware 62-1244325
(State or other jurisdiction of (I.R.S. 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 preceding 12 months (or for such
shorter period that the Partnership 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)
JACQUES-MILLER INCOME FUND, L.P. - II
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 2000
Assets
Cash and cash equivalents $ 792
Notes receivable from affiliated parties (net of
allowance of approximately $2,425) --
$ 792
Liabilities and Partners' (Deficit) Capital
Liabilities
Other liabilities $ 23
Partners' (Deficit) Capital
General partner $ (106)
Limited partners (12,400 units issued and
outstanding) 875 769
$ 792
See Accompanying Notes to Consolidated Financial Statements
b)
JACQUES-MILLER INCOME FUND, L.P. - II
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Revenues:
Interest income $ 10 $ 6 $ 29 $ 20
Expenses:
General and administrative 24 11 60 38
Net loss $ (14) $ (5) $ (31) $ (18)
Net loss allocated to
general partner (1%) $ -- $ -- $ -- $ --
Net loss allocated to
limited partners (99%) (14) (5) (31) (18)
$ (14) $ (5) $ (31) $ (18)
Net loss per limited
partnership unit $(1.13) $(0.40) $(2.50) $(1.45)
See Accompanying Notes to Consolidated Financial Statements
c)
JACQUES-MILLER INCOME FUND, L.P. - II
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Partners' (deficit) capital at
December 31, 1999 12,400 $ (106) $ 906 $ 800
Net loss for the nine months
ended September 30, 2000 -- -- (31) (31)
Partners' (deficit) capital
at September 30, 2000 12,400 $ (106) $ 875 $ 769
See Accompanying Notes to Consolidated Financial Statements
d)
JACQUES-MILLER INCOME FUND, L.P. - II
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
2000 1999
Cash flows from operating activities:
Net loss $ (31) $ (18)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Change in accounts:
Due from affiliates -- (2)
Notes receivable -- 70
Other liabilities (2) (3)
Net cash (used in) provided by operating activities (33) 47
Net (decrease) increase in cash and cash equivalents (33) 47
Cash and cash equivalents at beginning of period 825 774
Cash and cash equivalents at end of period $ 792 $ 821
See Accompanying Notes to Consolidated Financial Statements
e)
JACQUES-MILLER INCOME FUND, L.P. - II
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Jacques-Miller
Income Fund, L.P. - II ("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 Jacques-Miller, Inc. (the "Corporate
General Partner"), all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three and nine month periods ended September 30, 2000, are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 2000. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Partnership's Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1999.
Principles of Consolidation
The consolidated financial statements include all the accounts of the
Partnership and a 99% limited partnership interest in Jacques-Miller Income Fund
II Special Asset Partnership ("La Plaza") L.P. All significant interpartnership
balances have been eliminated.
Note B - Notes Receivable from Affiliated Parties
Notes receivable consist of the following (in thousands):
September 30,
2000
Notes receivable $ 937
Accrued interest receivable 1,488
2,425
Allowance for uncollectible notes
receivable (including
approximately $1,295 of
deferred interest revenue) (2,425)
$ --
The Partnership holds three notes receivable at September 30, 2000, totaling
approximately $937,000 with approximately $1,488,000 of related accrued
interest, all of which is past due and fully reserved. Included in the provision
for uncollectible notes receivable is approximately $1,295,000 of deferred
interest revenue. Additionally, these three notes are due from related
partnerships. These three promissory notes bear interest at rates ranging from
12% to 12.5%, and are unsecured by the related partnerships and are subordinated
to the underlying mortgages of the respective partnerships.
One note in the amount of approximately $413,000 with accrued interest due in
the amount of approximately $409,000 (the "Catawba Club Note") matured November
1, 1997. Subsequent to September 30, 2000, the first and second mortgages
encumbering Catawba Club were replaced with a new first mortgage. However, after
payment of transaction costs and establishing a repair escrow, as required by
the lender, there were no proceeds available for a payment on the Catawba Club
Note. A second note in the amount of approximately $454,000 with accrued
interest due in the amount of approximately $457,000 (the "Quail Run Note")
matured June 1, 1997. A third note in the amount of $70,000 with accrued
interest due in the amount of approximately $622,000 (the "Highridge Note")
matured May 1, 1996. All of these notes were in default at September 30, 2000.
The Partnership recently obtained a default judgment with respect to these
notes. The Corporate General Partner is currently evaluating its options to
collect upon this judgment.
At the end of 1998, the Partnership agreed to accept approximately $70,000 in
full satisfaction of the Woodlawn Village Note. The outstanding balance of this
note receivable totaled approximately $501,000 including accrued interest, and
was fully reserved. The Partnership received this payment in April 1999.
Note C - Transactions with Affiliated Parties
Other than the notes receivable, as previously disclosed, the Partnership had
the following transactions:
On December 31, 1991, MAE GP Corporation ("MAE GP"), an affiliate of Insignia
Financial Group, Inc. ("Insignia"), acquired substantially all of the assets of
Jacques-Miller, Inc. (the general partner interest of the Registrant) including
Jacques-Miller's property management organization. However, the general partner
interest of the Registrant was not acquired during this transaction. As a result
of a separate Advisory Agreement between the Registrant and IFGP Corporation (an
affiliate of Insignia), Insignia and its affiliates succeeded to those asset
management and property management duties previously performed by
Jacques-Miller, Inc.
An affiliate of the Corporate General Partner received reimbursements of
accountable administrative expenses amounting to approximately $18,000 and
$7,000 for the nine months ended September 30, 2000 and 1999, respectively.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 3,935.01 limited partnership
units in the Partnership representing 31.73% of the outstanding units. A number
of these units were acquired pursuant to tender offers made by AIMCO or its
affiliates. It is possible that AIMCO or its affiliates will make one or more
additional offers to acquire additional limited partnership interests in the
Partnership for cash or in exchange for units in the operating partnership of
AIMCO. Under the Partnership Agreement, unitholders holding a majority of the
Units are entitled to take action with respect to a variety of matters, which
would include without limitation, voting on certain amendments to the
Partnership Agreement and voting to remove the Corporate General Partner. When
voting on matters, AIMCO would in all likelihood vote the Units it acquired in a
manner favorable to the interest of the Corporate General Partner because of
their affiliation with the Corporate General Partner.
Note D - Segment Information
The Partnership has only one reportable segment. Moreover, due to the very
nature of the Partnership's operations, the Corporate General Partner believes
that segment-based disclosures will not result in a more meaningful presentation
than the consolidated financial statements as currently presented.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
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 Partnership from time to time.
The discussion of the Partnership'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 Partnership'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.
Results of Operations
The Partnership's net loss for the three and nine months ended September 30,
2000, was approximately $14,000 and $31,000 compared to a net loss of
approximately $5,000 and $18,000 for the three and nine months ended September
30, 1999. The increase in net loss for the three and nine months ended September
30, 2000, is attributable to an increase in total expenses partially offset by
an increase in total revenues. The increase in total expenses is attributable to
an increase in general and administrative expense which is primarily due to an
increase in professional fees relating to the administration of the Partnership
in addition to an increase in the cost of services included in the management
reimbursements to the Corporate General Partner as allowed under the Partnership
Agreement. The increase in total revenue is attributable to an increase in
interest income as a result of higher average cash balances held in interest
bearing accounts. The Partnership currently holds three notes from affiliated
partnerships which require payments from excess cash flow after payments of
first and second mortgages of the affiliated partnerships (see discussion
below).
Liquidity and Capital Resources
At September 30, 2000, the Partnership held cash and cash equivalents of
approximately $792,000 as compared to approximately $821,000 at September 30,
1999. For the nine months ended September 30, 2000, cash and cash equivalents
decreased by approximately $33,000 from the Partnership's year ended December
31, 1999. The decrease in cash and cash equivalents is due to the net loss of
approximately $31,000 and the decrease in other liabilities of approximately
$2,000.
During 1998, the Partnership agreed to accept a payment of approximately $70,000
in full satisfaction of the note receivable from Woodlawn Village. The
outstanding balance of this note receivable totaled approximately $501,000,
including accrued interest, and was fully reserved. The Partnership received
this payment in April 1999. No such payment was received during the nine month
period ended September 30, 2000.
The Partnership holds three notes receivable at September 30, 2000, totaling
approximately $937,000 with approximately $1,488,000 of related accrued
interest, all of which is fully reserved. Included in the provision for
uncollectible notes receivable is approximately $1,295,000 of deferred interest
revenue. Additionally, these three notes are due from related partnerships.
These three promissory notes are unsecured by the related partnerships and are
subordinated to the underlying mortgages of the respective partnerships.
One note in the amount of approximately $413,000 with accrued interest due in
the amount of approximately $409,000 (the "Catawba Club Note") matured November
1, 1997. Subsequent to September 30, 2000, the first and second mortgages
encumbering Catawba Club were replaced with a new first mortgage. However, after
payment of transaction costs and establishing a repair escrow, as required by
the lender, there were no proceeds available for a payment on the Catawba Club
Note. A second note in the amount of approximately $454,000 with accrued
interest due in the amount of approximately $457,000 (the "Quail Run Note")
matured June 1, 1997. A third note in the amount of $70,000 with accrued
interest due in the amount of approximately $622,000 (the "Highridge Note")
matured May 1, 1996. All of these notes were in default at September 30, 2000.
The Partnership recently obtained a default judgment with respect to these
notes. The Corporate General Partner is currently evaluating its options to
collect upon this judgment.
No distributions were made during the nine months ended September 30, 2000 and
1999. The Partnership's distribution policy is reviewed on an annual basis.
Future cash distributions will depend on the levels of net cash generated from
the collection of notes receivable and the availability of cash reserves. There
can be no assurance, however, that the Partnership will generate sufficient
funds from operations to permit distributions to its partners in 2000 or
subsequent periods.
PART II - OTHER INFORMATION
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 September 30, 2000.
SIGNATURE
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.
JACQUES-MILLER INCOME FUND, L.P. - II
By: Jacques-Miller, Inc
Corporate General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
President and Treasurer
Date: