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, 2001
[ ] 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
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 2001
Assets
Cash and cash equivalents $ 72
Notes receivable from affiliated parties (net of
allowance of approximately $2,307) --
$ 72
Liabilities and Partners' (Deficit) Capital
Liabilities
Other liabilities $ 30
Partners' (Deficit) Capital
General partner $ (113)
Limited partners (12,400 units issued and
outstanding) 155 42
$ 72
See Accompanying Notes to Financial Statements
b)
JACQUES-MILLER INCOME FUND, L.P. - II
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
Revenues:
Recovery of bad debt $ -- $ -- $ 310 $ --
Interest income -- 10 18 29
Total revenues -- 10 328 29
Expenses:
General and administrative 14 24 54 60
Net (loss) income $ (14) $ (14) $ 274 $ (31)
Net income allocated to
general partner (1%) $ -- $ -- $ 3 $ --
Net (loss) income allocated to
limited partners (99%) (14) (14) 271 (31)
$ (14) $ (14) $ 274 $ (31)
Net (loss) income per limited
partnership unit $(1.13) $(1.13) $21.85 $(2.50)
Distributions per limited
partnership unit $ -- $ -- $78.79 $ --
See Accompanying Notes to Financial Statements
c)
JACQUES-MILLER INCOME FUND, L.P. - II
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, 2000 12,400 $ (106) $ 861 $ 755
Distributions to partners -- (10) (977) (987)
Net income for the nine months
ended September 30, 2001 -- 3 271 274
Partners' (deficit) capital
at September 30, 2001 12,400 $ (113) $ 155 $ 42
See Accompanying Notes to Financial Statements
d)
JACQUES-MILLER INCOME FUND, L.P. - II
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
2001 2000
Cash flows from operating activities:
Net income (loss) $ 274 $ (31)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Change in accounts:
Other liabilities 6 (2)
Net cash provided by (used in) operating activities 280 (33)
Cash flow used in financing activity:
Distribution to partners (987) --
Net decrease in cash and cash equivalents (707) (33)
Cash and cash equivalents at beginning of period 779 825
Cash and cash equivalents at end of period $ 72 $ 792
See Accompanying Notes to Financial Statements
e)
JACQUES-MILLER INCOME FUND, L.P. - II
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited 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, 2001, are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 2001. 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, 2000. The Corporate General Partner is an affiliate of
Apartment Investment and Management Company ("AIMCO"), a publicly traded real
estate investment trust.
Note B - Notes Receivable from Affiliated Parties
Notes receivable consist of the following (in thousands):
September 30,
2001
Notes receivable $ 937
Accrued interest receivable 1,370
2,307
Provision for uncollectible notes
receivable (including
approximately $1,177,000 of
deferred interest revenue) (2,307)
$ --
The Partnership holds three notes receivable at September 30, 2001, totaling
approximately $937,000 with approximately $1,370,000 of related accrued
interest, all of which is past due and fully reserved. Included in the provision
for uncollectible notes receivable is approximately $1,177,000 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 $461,000 (the "Catawba Club Note") matured November
1, 1997. During 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 $204,000 (the "Quail Run Note") matured June 1, 1997. During the
nine months ended September 30, 2001, the Partnership received a $310,000
payment for outstanding interest on the note from Quail Run. A third note in the
amount of $70,000 with accrued interest due in the amount of approximately
$705,000 (the "Highridge Note") matured May 1, 1996. All of these notes were in
default at September 30, 2001. The Partnership has obtained a default judgment
with respect to these notes. The Corporate General Partner is currently
evaluating its options to collect upon this judgment. Payments on these notes
are restricted to excess cash flow after payments of the first and second
mortgages of the affiliated partnerships and are dependent on excess cash flow
from the properties or sales and refinancing proceeds. No payments on these
three notes were received in the nine month period ended September 30, 2000. All
three notes are fully reserved.
Note C - Transactions with Affiliated Parties
Other than the notes receivable, as previously disclosed, the Partnership had
the following transactions:
An affiliate of the Corporate General Partner received reimbursements of
accountable administrative expenses amounting to approximately $19,000 and
$18,000 for the nine months ended September 30, 2001 and 2000, respectively.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates owned 4,044.01 limited partnership units
in the Partnership representing 32.61% of the outstanding units at September 30,
2001. 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 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 its
affiliation with the Corporate General Partner.
Note D - Distributions
During the nine months ended September 30, 2001, the Partnership declared and
paid distributions of approximately $987,000 to the partners (approximately
$977,000 to the limited partners or $78.79 per limited partnership unit). These
distributions consisted of approximately $70,000 (approximately $69,000 to the
limited partners or $5.56 per limited partnership unit) of funds received as
full satisfaction of the note receivable from Woodlawn Village, approximately
$611,000 (approximately $605,000 to the limited partners or $48.79 per limited
partnership unit) of remaining cash from the sale of La Plaza and approximately
$306,000 (approximately $303,000 to the limited partners or $24.44 per limited
partnership unit) of funds received as partial payment of the interest
receivable from Quail Run. No distributions were made during the nine months
ended September 30, 2000.
Note E - 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 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 income for the nine months ended September 30, 2001 was
approximately $274,000 compared to a net loss of approximately $31,000 for the
nine months ended September 30, 2000. The Partnership's net loss for both the
three months ended September 30, 2001 and 2000, was approximately $14,000. The
increase in net income for the nine months ended September 30, 2001, is
attributable to an increase in total revenues. The increase in total revenues is
attributable to an interest payment received on Quail Run's fully reserved note.
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). There was no
change in the net loss for the three months ended September 30, 2001 as the
decrease in total revenues was offset by the decrease in total expenses. The
decrease in total revenues is due to the decrease in interest income as a result
of lower cash balances held in interest bearing accounts. The decrease in total
expenses is due to a decrease in professional expenses.
Liquidity and Capital Resources
At September 30, 2001, the Partnership held cash and cash equivalents of
approximately $72,000 as compared to approximately $792,000 at September 30,
2000. For the nine months ended September 30, 2001, cash and cash equivalents
decreased by approximately $707,000 from the Partnership's year ended December
31, 2000. The decrease in cash and cash equivalents is due to approximately
$987,000 of cash used in financing activities partially offset by approximately
$280,000 of cash provided by operating activities. Cash used in financing
activities consisted of distributions to the partners. The Partnership invests
its cash in interest bearing accounts.
The Partnership holds three notes receivable at September 30, 2001, totaling
approximately $937,000 with approximately $1,370,000 of related accrued
interest, all of which is fully reserved. Included in the provision for
uncollectible notes receivable is approximately $1,177,000 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 $461,000 (the "Catawba Club Note") matured November
1, 1997. During 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 $204,000 (the "Quail Run Note") matured June 1, 1997. During the
nine months ended September 30, 2001, the Partnership received a $310,000
payment for outstanding interest on the note from Quail Run. A third note in the
amount of $70,000 with accrued interest due in the amount of approximately
$705,000 (the "Highridge Note") matured May 1, 1996. All of these notes were in
default at September 30, 2001. The Partnership has obtained a default judgment
with respect to these notes. The Corporate General Partner is currently
evaluating its options to collect upon this judgment. Payments on these notes
are restricted to excess cash flow after payments of the first and second
mortgages of the affiliated partnerships and are dependent on excess cash flow
from the properties or sales and refinancing proceeds. No payments on these
three notes were received in the nine month period ended September 30, 2000. All
three notes are fully reserved.
During the nine months ended September 30, 2001, the Partnership declared and
paid distributions of approximately $987,000 to the partners (approximately
$977,000 to the limited partners or $78.79 per limited partnership unit). These
distributions consisted of approximately $70,000 (approximately $69,000 to the
limited partners or $5.56 per limited partnership unit) of funds received as
full satisfaction of the note receivable from Woodlawn Village, approximately
$611,000 (approximately $605,000 to the limited partners or $48.79 per limited
partnership unit) of remaining cash from the sale of La Plaza and approximately
$306,000 (approximately $303,000 to the limited partners or $24.44 per limited
partnership unit) of funds received as partial payment of the interest
receivable from Quail Run. No distributions were made during the nine months
ended September 30, 2000. The Partnership's distribution policy is reviewed on a
monthly basis. Future cash distributions will depend on 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 collections of
the fully reserved notes receivable to permit further distributions to its
partners during the remainder of 2001 or subsequent periods.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates owned 4,044.01 limited partnership units
in the Partnership representing 32.61% of the outstanding units at September 30,
2001. 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 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 its
affiliation with the Corporate General Partner.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
None.
b) Reports on Form 8-K:
None filed during the quarter ended September 30, 2001.
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: