10-Q 1 tenq.txt COMMUNITY INVESTMENT PARTNERS II, L.P. FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended SEPTEMBER 30, 2001 Commission file number 0-20213 COMMUNITY INVESTMENT PARTNERS II, L.P. ----------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) MISSOURI 43-1609351 ----------------------------------------------------------------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 12555 Manchester Road St. Louis, Missouri 63131 ----------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (314) 515-2000 ------------------ 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 --- --- 1 COMMUNITY INVESTMENT PARTNERS II, L.P. INDEX Page Number Part I. FINANCIAL INFORMATION Item 1. Financial Statements Schedule of Portfolio Investments...........................3 Statement of Financial Condition............................6 Statement of Income.........................................7 Statement of Cash Flows ....................................8 Statement of Changes in Partnership Capital.................9 Notes to Financial Statements .............................10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ......................11 Part II. OTHER INFORMATION Item 1. Legal Proceedings..........................................13 Item 6. Exhibits and Reports on Form 8-K...........................13 Signatures.................................................14 2 Part I. FINANCIAL INFORMATION Item 1. Financial Statements COMMUNITY INVESTMENT PARTNERS II, L.P. SCHEDULE OF PORTFOLIO INVESTMENTS AS OF SEPTEMBER 30, 2001 (UNAUDITED)

5 Part I. FINANCIAL INFORMATION Item 1. Financial Statements COMMUNITY INVESTMENT PARTNERS II, L.P. STATEMENT OF FINANCIAL CONDITION

6 Part I. FINANCIAL INFORMATION Item 1. Financial Statements COMMUNITY INVESTMENT PARTNERS II, L.P. STATEMENT OF INCOME (UNAUDITED)

7 Part I. FINANCIAL INFORMATION Item 1. Financial Statements COMMUNITY INVESTMENT PARTNERS II, L.P. STATEMENT OF CASH FLOWS (UNAUDITED)

8 Part I. FINANCIAL INFORMATION Item 1. Financial Statements COMMUNITY INVESTMENT PARTNERS II, L.P. STATEMENT OF CHANGES IN PARTNERSHIP CAPITAL (UNAUDITED)

9 Part I. FINANCIAL INFORMATION Item 1. Financial Statements COMMUNITY INVESTMENT PARTNERS II, L.P. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) BASIS OF PRESENTATION Community Investment Partners II, L.P. (CIP II) is a limited partnership which has elected to be a business development company under the Investment Company Act of 1940, as amended. As a business development company, the partnership is required to invest at least 70% of its total assets in qualifying investments as specified in the Investment Company Act. CIP Management, L.P., LLLP (Management), a limited liability limited partnership, is the Managing General Partner of CIP II. Management is responsible for making all decisions regarding CIP II's investment portfolio. CIP II is no longer making initial investments, but may increase existing holdings. All portfolio investments are carried at cost until significant developments affecting an investment provide a basis for revaluation. Thereafter, portfolio investments are carried at fair value as obtained from outside sources or at a value determined quarterly by the Managing General Partner under the supervision of the Independent General Partners. Due to the inherent uncertainty of valuation, those estimated values for portfolio investments carried at cost may differ significantly from the values that would have been used had a ready market for the investment existed, and the differences could be material to the financial statements. Investments in securities traded on a national securities exchange are valued at the latest reported sales price on the last business day of the period. If no sale has taken place, the securities are valued at the last bid price. If no bid price has been reported, or if no exchange quotation is available, the securities are valued at the quotation obtained from an outside broker. Investment transactions are recorded on a trade date basis. Income is recorded on an accrual basis. The General Partners of CIP II have amended, and Management has agreed to amend, the Management Agreement for CIP II to clarify the right of Management to waive all or any portion of the management fee from time to time without any reduction in the level of services. The financial information included herein is unaduited. However, in the opinion of management, such information includes all adjustments, consisting solely of normal recurring accruals, which are necessary for a fair presentation of the results of interim operations. The results of operations for the nine months ended September 30, 2001 and September 30, 2000 are not necessarily indicative of the results to be expected for the full year. 10 Part I. FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations COMMUNITY INVESTMENT PARTNERS II, L.P. MANAGEMENT'S FINANCIAL DISCUSSION RESULTS OF OPERATIONS QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2001 VERSUS QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2000 Net loss for the three months ended September 30, 2001 was $28,798, compared to net income of $49,387 for the three months ended September 30, 2000. Net loss for the nine months ended September 30, 2001 was $28,972, compared to net loss of $402,976 for the nine months ended September 30, 2000. Total revenues for the three months ended September 30, 2001 were $4,657, compared to $9,206 for the three months ended September 30, 2000. Total revenues for the nine months ended September 30, 2001 were $13,970, compared to $13,144 for the nine months ended September 30, 2000. Revenues consist of dividend and interest income from investments. There were no realized gains or losses from the sale of investments for the three months ended September 30, 2001, compared to realized gains from investments of $3,293 for the three months ended September 30, 2000. Unrealized losses on investments for the three months ended September 30, 2001 were $29,556 compared to unrealized gains on investments of $45,283 for the three months ended September 30, 2000. The unrealized losses on investments for the three months ended September 30, 2001 were due to a decrease in the market value of Computer Motion, Inc. and On-line Resources & Communications Corporation common stock. The unrealized gains on investments for the three months ended September 30, 2000 were due to increases in the market values of the Computer Motion, Inc. warrants. The unrealized gains for the three months ended September 30, 2000 were offset by unrealized losses on On-line Resources & Communications Corporation common stock, due to a decrease in market value per share. Realized losses form the sale of investments for the nine months ended September 30, 2001 were $3,024, compared to realized gains from the sale of investments of $4,754 for the nine months ended September 30, 2000. Unrealized losses on investments for the nine months ended September 30, 2001 were $22,396, compared to $397,623 for the nine months ended September 30, 2000. The unrealized losses on investments for the nine months ended September 30, 2001 and 2000 were due to a decrease in market value of Computer Motion, Inc. and On-line Resources & Communications Corporation. From December 31, 2001 to September 30, 2001, the share prices of Computer Motion, Inc. and On-line Resources and Communication Corporation decreased 35% and 42%, respectively. From December 31, 1999 to September 30, 2000, the share prices of Computer Motion, Inc. and On-line Resources and Communication Corporation decreased 14% and 77%, respectively. Expenses for the three months ended September 30, 2001 were $3,899, a 54% decrease from expenses for the three months ended September 30, 2000 of $8,395. Expenses for the nine months ended September 30, 2001 were $17,522, a 25% decrease compared to expenses for the nine months ended September 30, 2000 of $23,251. The decrease in expenses for the three months and nine months ended September 30, 2001 are a result of a decrease in legal expenses. 11 Part I. FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations INVESTMENT TRANSACTIONS Following is a summary of portfolio investment transactions during the nine months ended September 30, 2001.

LIQUIDITY AND CAPITAL RESOURCES The Partnership's total capital of $1,298,346 as of September 30, 2001, consisted of $1,285,244 in limited partner capital and $13,102 in general partner capital. Net loss was allocated to the limited partners in the amount of $28,682 and to the general partners in the amount of $290. At September 30, 2001, the Partnership had $13,145 in cash and cash equivalents. 12 Part II. OTHER INFORMATION COMMUNITY INVESTMENT PARTNERS II, L.P. Item 1: Legal Proceedings The Partnership is not a party to any material pending legal proceedings. Item 6: Exhibits and Reports on Form 8-K (a) Exhibits None (b) Reports on Form 8-K No reports were filed on Form 8-K for the quarter ended September 30, 2001. 13 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. COMMUNITY INVESTMENT PARTNERS II, L.P. By: CIP Management, L.P., LLLP, Managing General Partner By: CIP Management, Inc., its Managing General Partner /s/ Daniel A. Burkhardt President, Treasurer and Director November 12, 2001 ----------------------------------- Daniel A. Burkhardt /s/ Ray L. Robbins, Jr. Vice-President and Director November 12, 2001 ----------------------------------- Ray L. Robbins, Jr.

COMMUNITY INVESTMENT PARTNERS II LP 10-Q