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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10Q
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2005
Commission file number: 0-13745
TPI LAND INVESTORS II LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
ARIZONA 86-0483912
(State or other jurisdiction of (I.R.S.Employer
incorporation organization) Identification No.)
3420 E. Shea Blvd., Suite 200, Phoenix, Arizona 85028
(Address of principal executive offices) (Zip Code)
(602) 953-5298
(Registrant's telephone number, including area code)
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 X No
---------------- ----------------
TPI LAND INVESTORS II LIMITED PARTNERSHIP
March 31, 2005
PART 1
Item 1. Financial Statements.
Balance Sheet as of
MARCH 31 2005
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ASSETS
CURRENT ASSETS
CHECKING/SAVINGS
CHECKING-BANK ONE 09544856 8,158.67
SAVINGS-BANKONE 43980272 1,158,198.83
-------------
TOTAL CHECKING/SAVINGS 1,166,357.50
OTHER CURRENT ASSETS
ACCOUNTS RECEIVABLE 3,000.00
N/R GENERAL PARTNERS 70,213.53
OTHER CONTRIBUTIONS RECEIVABLE 175.00
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TOTAL OTHER CURRENT ASSETS 73,388.53
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TOTAL CURRENT ASSETS 1,239,746.03
FIXED ASSETS
OFFICE FURNITURE 170.98
-------------
TOTAL FIXED ASSETS 170.98
OTHER ASSETS
LAND HELD FOR INVESTMENT
CASA GRANDE INFRASTRUCTURE 1.00
CG MEDICAL LOT 3
SHELL BUILDING/DEVELOPMENT 419,892.35
CG MEDICAL LOT 3 - OTHER 299,997.67
-------------
TOTAL CG MEDICAL LOT 3 719,890.02
CG MEDICAL LOT 5 325,237.00
CG MEDICAL LOT 7A 200,226.19
LAND-TOLLESON 613,124.64
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TOTAL LAND HELD FOR INVESTMENT 1,858,478.85
LOAN ORIGINATION FEE
ACCUM. AMORT.-LOAN FEES -30,300.00
LOAN ORIGINATION FEE - OTHER 30,300.00
-------------
TOTAL LOAN ORIGINATION FEE 0.00
ORGANIZATIONAL COSTS
ACCUM. AMORT.-ORGANIZATION COST -72,539.98
ORGANIZATIONAL COSTS - OTHER 72,539.98
-------------
TOTAL ORGANIZATIONAL COSTS 0.00
SYNDICATION COSTS 828,423.26
-------------
TOTAL OTHER ASSETS 2,686,902.11
-------------
TOTAL ASSETS 3,926,819.12
=============
LIABILITIES & EQUITY
LIABILITIES
CURRENT LIABILITIES
OTHER CURRENT LIABILITIES
DISTRIBUTIONS PAYABLE -1996 2,550.00
DISTRIBUTIONS PAYABLE 1999 16,160.00
RE COM PAY-TPI ASSET 14,785.22
-------------
TOTAL OTHER CURRENT LIABILITIES 33,495.22
-------------
TOTAL CURRENT LIABILITIES 33,495.22
-------------
TOTAL LIABILITIES 33,495.22
EQUITY
DISTRIBUTION-1987 -143,292.93
DISTRIBUTION-1988 -1,074,396.97
DISTRIBUTION-1996 -354,470.00
DISTRIBUTION 1999 -567,280.00
PARTNER CONTRIBUTION 7,162,666.46
PREVIOUS RETAINED EARNINGS -1,103,114.70
NET INCOME -26,787.96
-------------
TOTAL EQUITY 3,893,323.90
-------------
TOTAL LIABILITIES & EQUITY 3,926,819.12
=============
Statement of Cash Flows
JAN - MAR 05
------------
OPERATING ACTIVITIES
NET INCOME -26,787.96
------------
NET CASH PROVIDED BY OPERATING ACTIVITIES -26,787.96
INVESTING ACTIVITIES
LAND HELD FOR INVESTMENT:CG MEDICAL LOT 3 -2,014.69
LAND HELD FOR INVESTMENT:CG MEDICAL LOT 3:SHELL BUILDING/DEVELOPMENT -320,765.49
LAND HELD FOR INVESTMENT:CG MEDICAL LOT 5 -10.00
LAND HELD FOR INVESTMENT:CG MEDICAL LOT 7A 263,974.36
------------
NET CASH PROVIDED BY INVESTING ACTIVITIES -58,815.82
FINANCING ACTIVITIES
PREVIOUS RETAINED EARNINGS 107,764.06
RETAINED EARNINGS -107,764.06
------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 0.00
------------
NET CASH INCREASE FOR PERIOD -85,603.78
CASH AT BEGINNING OF PERIOD 1,251,961.28
------------
CASH AT END OF PERIOD 1,166,357.50
============
TPI LAND INVESTORS II LIMITED PARTNERHSIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2005
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
METHOD OF ACCOUNTING
The Partnership's financial statements are prepared using the accrual method of
accounting. The Partnership's intent to sell all of the remaining properties
and liquidate the Partnership will not impact the accounting treatment applied
by the Partnership in its financial statements prepared in accordance with
generally accepted accounting principles as the liquidation proceeds and the
timing thereof are not currently estimable.
CASH AND CASH EQUIVALENTS
The Partnership considers all highly liquid debt instruments with maturity of
three months or less when acquired to be cash and cash equivalents.
FIXED ASSETS AND DEPRECIATION POLICY
The fixed assets listed on the Balance Sheet as Casa Grande Infrastructure,
Casa Grande Medical Campus Lot 3, Lot 7A, and Lot 5, and Land in Tolleson are
the land inventory currently being marketed for sale. These items have been
reclassified as Other Assets. The only fixed asset owned by the Partnership are
file cabinets, which are listed at residual value. The Partnership does not
have a depreciation policy since the inventory is land and new construction.
RISKS AND UNCERTAINTIES
The Partnership's ability to (i) achieve positive cash flow from operations,
(ii) meet its debt obligations, (iii) provide distributions either from
operations or the ultimate disposition of the Partnership's properties or (iv)
continue as a going concern, may be impacted by changes in interest rates,
property values, geographic economic conditions, or the entry of other
competitors into the market. The accompanying financial statements do not
provide for adjustments with regard to these uncertainties.
REVENUE RECOGNITION
The Partnership accounts for sales of land held for investment purposes under
the accrual method when certain criteria are met, and profit is recorded when a
sale has been consummated.
AMORTIZATION OF OTHER ASSETS
Organization costs represent costs incurred during the formation period of the
Partnership. Syndication costs represent commissions incurred on the sale of
limited partnership interests due diligence costs and the costs of preparing
the prospectuses. Organization costs are being amortized over 60 months.
Syndication costs are not amortized for income tax reporting purposes. Loan
origination fees represent costs incurred by the Partnership to secure a loan.
Loan fees are being amortized over 36 months. Syndication costs were expended
in 1984.
Total Syndication Costs include:
$709,100.00 Commissions
$ 35,455.00 Due Diligence - Legal
$ 83,868.26 Prospectus Costs
- -----------
$828,423.26 Total Syndication Costs
LAND HELD FOR INVESTMENT PURPOSES AND RELATED COSTS
Land values as stated on the balance sheet are at actual cost plus capitalized
legal, improvement fees, architectural fee's and construction costs.
INCOME TAXES
The Partnership is a limited partnership. As such, all taxable income or losses
and available income tax credits are passed from the partnership to the
individual partners. It is the responsibility of the individual partners to
report the taxable income or losses and tax credits, and to pay any resulting
income taxes. Consequently, there is no provision for income taxes included in
these financial statements.
The Partnership is required to file Internal Revenue Service Form 1065, U.S.
PARTNERSHIP RETURN OF Income, and to provide its partners with Schedule K-1,
PARTNERS' SHARE OF INCOME, CREDITS, DEDUCTIONS, ETC. Partners' share of income
and loss is allocated to those partners' in proportion to each partner's share
of the basis in the Partnership, calculated after special allocations of
expenses have been made. If any partner is not a partner for an entire fiscal
year or if his capital percentage changed during the year, the share of net
profits, net losses, distributions, credits and deductions of the Partnership
allocable to such partner is determined consistent with the portion of the year
during which he was a partner and by taking into account his varying capital
percentages. Any assignment or sale of units is recognized by the Partnership
not later than the last day of the calendar quarter following receipt of
written notice of such assignment or sale accompanied by copies of all
operative documents effecting such assignment or sale.
NOTE 2 - INFRASTRUCTURE COSTS
The infrastructure improvements were deeded to TPI Land Investors II Limited
Partnership from TPI Land Development IV Limited Partnership in December 2004
when TPI Land Development IV Limited Partnership sold its last property and
made a final distribution to its limited partners. The infrastructure has no
resale value; therefore, it is listed at $1.00 on the Balance Sheet.
NOTE 3 - LAND HELD FOR INVESTMENT PURPOSES
Land Held For Investment Purposes represents costs incurred by the Partnership
for the acquisition and holding of land as of March 31, 2005 are as follows:
Casa Grande Medical Campus - Lot 7A 200,226.19
Casa Grande Medical Campus - Shell Medical Building 419,892.35
Casa Grande Medical Campus - Lot 3 299,997.67
Casa Grande Medical Campus - Lot 5 325,237.00
96th Avenue and Van Buren - 613,124.64
Tolleson
NOTE 4 - DISTRIBUTIONS PAYABLE
The Partnership is holding $18,710.00 in distributions payable in the money
market account. These distributions payable are from distributions made to
limited partners in 1996 and 1999. If the "missing" limited partners' are not
located by the close of the Partnership these distributions will be turned over
to the State Of Arizona as unclaimed property. The Partnership is making
genuine efforts to locate missing partners before turning over any
distributions to the State of Arizona.
NOTE 5 - COMMISSION PAYABLE
The Partnership sold properties in prior years and the General Partner, TPI
Asset Management, Inc. earned a real estate commission on these sales.
According to the prospectus, TPI Asset Management, Inc. cannot be paid the
Commission until the Limited Partners have received their original investment
and their program return.
NOTE 6 - PARTNERS' CAPITAL
Partners' capital contributions
received and subscribed as of March 31, 2005
Limited partners contributions (14,182 units) $ 7,091,000
General partners contribution (1%) 71,666
-----------
Total contribution 7,162,666
Prior year retained earning (1,103,115)
Net Income (26,788)
Distribution to partners 1987 (143,293)
Distribution to partners 1988 (1,074,397)
Distribution to partners 1996 (354,470)
Distribution to Partners 1999 (567,280)
-----------
Partner's capital $3,893,324
===========
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
LIQUIDITY
As of March 31, 2005 the Partnership had $1,166,357.50 in cash and money market
instruments. This large cash reserve has been retained to complete the
construction of the shell medical condominium building and provide operating
funds for the Partnership for fiscal year 2005.
CAPITAL RESOURCES
In fiscal year 2004, the Partnership entered into a construction contract with
Gonzalez & Associates, Inc. to finish the shell medical condominium building by
April 30, 2005. As of March 31, 2005, approximately $80,000.00 will be needed
to complete construction of the shell medical condominium building. The source
of these funds will come from the Partnership's money market account.
RESULTS OF OPERATIONS
For the first quarter of fiscal year 2005 the Partnership had net loss of
$26,787.96. The sources of revenue during the operating period were proceeds
from property sales and interest on the money market account. One property was
sold during this period. Lot 7B in the Casa Grande Medical Campus was sold for
$271,148.50 The cost of this sale was $265,854.64 for a gross profit of
$5293.76. Interest on the money market account for this period was $4354.97.
The major expenses for the Partnership during the period were income tax
preparation fee's of $14,200.00, professional services of $12,506.34 and real
estate taxes of $6,036.99.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Partnership's units are not publicly traded on any open market
therefore this is not applicable.
Item 4. Controls and Procedures.
The General Partners approve all expenditures and sign each check written
from the Partnership's checking account. SCSA, Inc. performs the general
accounting functions for the Partnership but has no signatory rights on the
Partnership's bank accounts. The registrant has retained Jo Ann Rudd, CPA,
P.C. to prepare the yearly income tax returns from the books and records
prepared by SCSA, Inc.
PART II
Item 1. Legal Proceedings.
None.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information
None.
Item 6. Exhibits
None.
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.
TPI LAND INVESTORS II LIMITED PARTNERSHIP
BY: /s/ Herve J.R. Tessier
------------------------------
Herve J.R. Tessier
General Partner
DATE: June 10, 2005