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 March 31, 2002
[ ] 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)
March 31, 2002
Assets
Cash and cash equivalents $ 69
Other assets 21
Notes receivable from affiliated parties (net of
allowance of approximately $1,586) --
$ 90
Liabilities and Partners' (Deficit) Capital
Liabilities
Other liabilities $ 16
Partners' (Deficit) Capital
General partner $ (113)
Limited partners (12,400 units issued and
outstanding) 187 74
$ 90
See Accompanying Notes to Financial Statements
b)
JACQUES-MILLER INCOME FUND, L.P. - II
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
2002 2001
Revenues:
Recovery of bad debt from affiliated parties $ -- $ 310
Other income -- 14
Total revenues -- 324
Expenses:
General and administrative 16 18
Net (loss) income $ (16) $ 306
Net (loss) income allocated to general partner (1%) $ -- $ 3
Net (loss) income allocated to limited partners (99%) (16) 303
$ (16) $ 306
Net (loss) income per limited partnership unit $(1.29) $24.44
Distributions per limited partnership unit $ 6.69 $54.35
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, 2001 12,400 $ (112) $ 286 $ 174
Distributions to partners -- (1) (83) (84)
Net loss for the three months
ended March 31, 2002 -- -- (16) (16)
Partners' (deficit) capital
at March 31, 2002 12,400 $ (113) $ 187 $ 74
See Accompanying Notes to Financial Statements
d)
JACQUES-MILLER INCOME FUND, L.P. - II
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
2002 2001
Cash flows from operating activities:
Net (loss) income $ (16) $ 306
Adjustments to reconcile net (loss) income to net cash
(used in) provided by operating activities:
Change in accounts:
Receivables -- (77)
Other liabilities 9 (7)
Net cash (used in) provided by operating activities (7) 222
Cash flow used in financing activity:
Distribution to partners (84) (681)
Net decrease in cash and cash equivalents (91) (459)
Cash and cash equivalents at beginning of period 160 779
Cash and cash equivalents at end of period $ 69 $ 320
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 (the "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 month
period ended March 31, 2002, are not necessarily indicative of the results that
may be expected for the fiscal year ending December 31, 2002. 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, 2001.
Note B - Notes Receivable from Affiliated Parties
Notes receivable consist of the following (in thousands):
March 31,
2002
Notes receivable $ 867
Accrued interest receivable 719
1,586
Provision for uncollectible notes
receivable (including
approximately $719 of
deferred interest revenue) (1,586)
$ --
The Partnership holds two notes receivable at March 31, 2002, totaling
approximately $867,000 with approximately $719,000 of related accrued interest,
all of which are fully reserved. Included in the provision for uncollectible
notes receivable is approximately $719,000 of deferred interest revenue.
Additionally, these two notes are past due from related partnerships. These two
promissory notes bear interest at 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 $486,000 (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 at March 31, 2002 in
the amount of approximately $233,000 (the "Quail Run Note") matured June 1,
1997. Both of these notes were in default at March 31, 2002. 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. 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 proceeds. No
payments on these three notes were received in the three month period ended
March 31, 2002. During the three months ended March 31, 2001, the Partnership
received a $310,000 payment for outstanding interest on the note from Quail Run.
Both notes are fully reserved.
During the three months ended March 31, 2002, the Partnership forgave the
remaining debt of approximately $635,000 on the Highridge note. Highridge
Associates sold all of its investment properties during 2001 and was unable to
fully repay its debt to the Partnership. The Partnership received a payment of
approximately $125,000 on the Highridge note during 2001.
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 $5,000 and $8,000
for the three months ended March 31, 2002 and 2001, respectively, which is
included in general and administrative expenses. As of March 31, 2002, the
Partnership is owed approximately $21,000 from an affiliate of the Corporate
General Partner for amounts overcharged in prior year for accountable
administrative expenses.
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 months ended March 31, 2002, was
approximately $16,000 compared to net income of approximately $306,000 for the
three months ended March 31, 2001. The increase in net loss for the three months
ended March 31, 2002, is attributable to a decrease in total revenues. The
decrease in total revenues is attributable to an interest payment received on
Quail Run's fully reserved note for the three months ended March 31, 2001 and a
decrease in other income as a result of lower average cash balances held in
interest bearing accounts. The Partnership currently holds two 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 March 31, 2002, the Partnership held cash and cash equivalents of
approximately $69,000 as compared to approximately $320,000 at March 31, 2001.
The decrease in cash and cash equivalents of approximately $91,000 from the
Partnership's year ended December 31, 2001, is due to approximately $84,000 of
cash used in financing activities and approximately $7,000 of cash used in
operating activities. Cash used in financing activities consisted of
distributions to the partners. The Partnership invests its working capital
reserves in interest bearing accounts.
The Partnership holds two notes receivable at March 31, 2002, totaling
approximately $867,000 with approximately $719,000 of related accrued interest,
all of which is fully reserved. Included in the provision for uncollectible
notes receivable is approximately $719,000 of deferred interest revenue.
Additionally, these two notes are past due from related partnerships. These two
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 $486,000 (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 at March 31, 2002 in
the amount of approximately $233,000 (the "Quail Run Note") matured June 1,
1997. Both of these notes were in default at March 31, 2002. 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. 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 proceeds. No
payments on these two notes were received in the three month period ended March
31, 2002. During the three months ended March 31, 2001, the Partnership received
a $310,000 payment for outstanding interest on the note from Quail Run. Both
notes are fully reserved.
During the three months ended March 31, 2002, the Partnership forgave the
remaining debt of approximately $635,000 on the Highridge note. Highridge
Associates sold all of its investment properties during 2001 and was unable to
fully repay its debt to the Partnership. The Partnership received a payment of
approximately $125,000 on the Highridge note during 2001.
Three Months Per Limited Three Months Per Limited
Ended Partnership Ended Partnership
March 31, 2002 Unit March 31, 2001 Unit
Note
Repayments (1) $ 84 $ 6.69 $ 70 $ 5.56
Sale (2) -- -- 611 48.79
$ 84 $ 6.69 $ 681 $54.35
(1) From note repayments from Highridge Associates during 2001, and from
Woodlawn Village during 2000, respectively.
(2) From the sale of La Plaza.
Future cash distributions will depend on the levels of net cash generated from
the collection of notes receivable and the availability of cash reserves. The
Partnership's cash available for distribution is reviewed on a monthly basis.
There can be no assurance, however, that the Partnership will generate
sufficient funds from collections of notes receivable to permit further
distributions to its partners during the remainder of 2002 or subsequent
periods.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates owned 4,059 limited partnership units in
the Partnership representing 32.74% of the outstanding units at March 31, 2002.
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 March 31, 2002.
SIGNATURES
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: May 13, 2002