FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-17685
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
North Carolina 56-1544869
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4000 Park Road, Charlotte, North Carolina 28209
(Address of principal executive officer) (Zip Code)
Registrant's telephone number, including area code: 704/523-9407
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Depositary Receipts for Depositary Growth Units
(Title of Class)
Depositary Receipts for Depositary Income Units
(Title of Class)
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 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
Aggregate market value of voting securities held by nonaffiliates: Not
applicable as all securities are non-voting.
Documents incorporated by reference: None
Page 1 of ___ sequentially numbered pages
Exhibit Index on Page ___
PART I
Item 1 - Business.
The Registrant is a limited partnership formed under the laws of the state
of North Carolina on January 16, 1987. The General Partners of the Registrant
are Marion Bass Real Estate Group, Inc. (the Managing General Partner), a North
Carolina corporation, and Marion F. Bass (the Individual General Partner),
president, chief executive officer, and sole shareholder of the Managing General
Partner (collectively, the General Partners).
The Registrant commenced on May 6, 1987 an offering of two classes of
depositary units at a price of $100 per unit (the Units) representing the
beneficial assignment of income limited partnership interests (the Income Units)
and growth limited partnership interests (the Growth Units). The offering was
for a minimum of 43,520 Units up to a maximum of 309,750 Units, with the Income
Units representing 60% and the Growth Units representing 40% of the offering. A
minimum purchase of 50 Units (30 Income Units and 20 Growth Units) was required,
except for certain individual retirement account purchases, and additional
purchases were required to be in multiples of 50 Units.
The Registrant's initial investment objectives were (1) to preserve and
protect the capital of the holders of Income Units, (2) to provide cash
distributions to the holders of Income Units, (3) to return the full amount of
the capital contributions of the Unitholders with respect to Income Units from
the proceeds of mortgage financing on the properties to be acquired by the
Registrant within four to seven years from the commencement of the offering, and
(4) to obtain capital appreciation on the capital contributions of the
Unitholders with respect to Growth Units. In December 1989, cash distributions
were made to holders of the Income Units in the full amount of the capital
contributions for those Units and the Income Units were redeemed. Since that
distribution to holders of Income Units, the distributions by the Registrant
have been made to the holders of the Growth Units.
On August 7, 1987, the Registrant acquired from the Managing General Partner
6.2 acres of undeveloped land zoned for 80 multifamily units located on Arrowood
Road in southern Mecklenburg County, North Carolina (the Arrowood Property) for
a purchase price of $375,102. The Registrant entered into a construction
contract with Marion Bass Construction Company, a corporation wholly owned by
the Individual General Partner, (Bass Construction) for the construction of an
80 unit residential apartment complex, consisting of 32 one bedroom units, 40
two bedroom units and 8 three bedroom units. The cost of construction of
$2,880,000 was financed by the proceeds of the offering derived from the initial
closing which occurred on August 7, 1987. At that closing, the Registrant
received $3,829,760 in net proceeds after deduction of
2
$435,200 in sales commissions and offering supervisory fees paid to Marion Bass
Securities Corporation (MBSC) and of $87,040 paid to Marion Bass Equity Group
(MBEG) in reimbursement for syndication and offering expenses.
On January 26, 1988, the Registrant acquired from the Managing General
Partner 12 acres of undeveloped land zoned for multifamily use located on
Dickerson Boulevard in Union County, North Carolina near Monroe, North Carolina
(the Monroe Property) for a purchase price of $364,964, the appraised value plus
certain carrying charges incurred by the Managing General Partner. The
Registrant entered into a construction contract with Bass Construction for the
construction of an 120 unit residential apartment complex, consisting of 40
one-bedroom units, 64 two-bedroom units and 16 three-bedroom units. The costs of
acquisition and construction of $4,014,000 were financed by the proceeds of the
offering derived from the second closing which occurred on January 26, 1988. At
that closing, the Registrant received $5,174,400 in net proceeds after deduction
of $588,000 paid to MBSC for sales commissions and offering supervisory fees and
of $117,600 paid to MBEG in reimbursement for syndication and offering expenses.
On May 5, 1988, the offering was amended to disclose the Registrant's
decision not to construct the Mallard Creek Project, to divide the Sabal Park
project into two separate phases, and to extend the offering beyond May 6, 1988.
The Registrant extended the offering period beyond the original expiration date
of May 6, 1988 to December 31, 1988 to permit MBSC additional time to solicit
subscriptions for the amount of the offering necessary to fund the construction
of Phase I and Phase II of Sabal Park. At the original expiration date, the
Registrant had subscriptions for an additional 3642 Income Units and 2428 Growth
Units, representing $607,000 in capital contributions, but said amount was
refunded to subscribers because confirmations to subscribe to the offering as
extended were not received prior to the original expiration date.
On October 6, 1988, the Registrant acquired from an affiliate of the
Managing General Partner 9 acres of undeveloped land located on U. S. Highway
521 in southern Mecklenburg County, North Carolina (formerly, the Sabal Park I
property, now known as Sabal Point II) for a cost of $462,992. The Sabal Point
II property is adjacent to a luxury apartment community owned by Bass Real
Estate Fund-II and known as Sabal Point I. The Registrant entered into a
construction contract with Bass Construction for the construction of an 88 unit
residential apartment complex, consisting of 48 two bedroom units and 40 three
bedroom units. The costs of acquisition and construction totalling $3,470,339
was financed by the proceeds of the offering derived from the third closing
which occurred on October 6, 1988. At the closing, the Registrant received
$4,620,000 in net proceeds after deduction of $525,000 paid to MBSC for sales
commissions and offering supervisory fees and of $105,000 paid to MBEG in
reimbursement for syndication and offering
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expenses. In August of 1989, the Registrant entered into a construction contract
with Bass Construction for the construction of a swimming pool and clubhouse.
The construction of the clubhouse and pool was completed in April, 1990, for
$275,000.
On December 31, 1988, the offering expired without sufficient
subscriptions to fund the acquisition and development of the fourth designated
property. Aggregate subscriptions held in escrow since the third closing of
$88,000 were refunded and the offering was terminated.
Approximately 13% ($2,119,320) of the aggregate capital contributions of the
Unitholders were placed in a reserve maintained by the Registrant to meet costs
and expenses of operations and to pay the preferential return to Unitholders
with respect to their Income Units to the extent that operating revenues less
operating expenses was insufficient to pay the return. As of December 28, 1989,
$610,606 had been used to make preferential returns to Unitholders with respect
to Income Units combined with $1,502,078 of cash provided from operations.
On December 27, 1989, The Variable Annuity Life Insurance Company of
Houston, Texas made permanent loans to the Registrant collateralized by the
Registrant's properties as follows:
Arrowood Crossing Apartments $2,625,000
The Chase Apartments $3,100,000
Sabal Point II Apartments $3,565,000
$9,290,000
The permanent loans have ten-year terms with interest accruing at 9.5% per
annum. Accrued interest is payable monthly, and installments of principal
payable monthly commenced March 1, 1992 based upon a thirty-year amortization
schedule. The remaining principal and all unpaid and accrued interest will be
due and payable on January 1, 2000. After closing costs relating to the
permanent loans, $9,206,007 was paid to the Registrant. The Registrant used the
financing proceeds together with reserves to return the full amount of the
capital contributions of the Unitholders with respect to Income Units totalling
$9,289,200. A 12.5% preferential return on the Income Units from July 1, 1989
through the redemption date of December 28, 1989 was paid concurrently.
Upon the sale of any property by the Registrant, the proceeds of the sale
will be distributed to the partners. Therefore, it is intended that the
Registrant will be self-liquidating. The General Partners currently intend to
dispose of all properties purchased within twelve to fifteen years of the
purchase.
4
Competition among owners of apartment complexes of the type and in the areas
that the Registrant owns apartment complexes generally is high. Competition is
based generally on price and features offered. Many of the Registrant's
competitors have greater assets and more experience than the Registrant and the
General Partners.
One or both of the General Partners serve as a general partner in eight
private partnerships which own various income-producing, multi-family
residential property. None of the private partnerships sponsored by the General
Partners currently contemplates the acquisition of additional properties. The
General Partners sponsored three public real estate partnerships, Bass Real
Estate Fund-84, Bass Real Estate Fund-II and Bass Real Estate Fund-III, with
similar investment objectives as the Registrant. Conflicts could develop between
the Registrant and other existing or future partnerships which the General
Partners may manage. The General Partners intend to devote only such time to the
business of the Registrant as in their judgment is reasonably required. The
General Partners are engaged in other similar activities which also require
their time and attention.
Two of the Registrant's properties, Arrowood Crossing and Sabal Point
II, adjoin apartment complexes owned by Bass Real Estate Fund-III and Bass Real
Estate Fund-II. In order to achieve greater economies of scale, Marion Bass
Properties, Inc., the property manager for the Registrant and the other owners,
has combined the management and leasing operations for all of the adjoining
complexes. Under this arrangement, the expenses are allocated on a per unit
basis except for those costs that can be directly attributed to a single
complex. When leasing units, the property manager shows available units in
different complexes and the tenant chooses the unit that he desires. The
occupancy on December 31, 1995 for Arrowood Crossing was 98% and the adjoining
complex was 99%. The occupancy on December 31, 1995 for Sabal Point II was 95%
and the adjoining complexes were 96% and 97%.
As of December 31, 1995, the Registrant did not directly employ any
persons in a full-time position. Certain employees of the Managing General
Partner and affiliates performed services for the Registrant during the year.
Item 2 - Properties.
Arrowood Property.
As described above, the Registrant acquired and constructed an 80 unit
residential apartment community known as Arrowood Crossing. Arrowood Crossing
consists of 8 buildings together with clubhouse and year-round swimming pool.
All buildings are slab on grade,
5
woodframe and vinyl siding. Construction was completed in October,
1988 with rental of the premises beginning in August, 1988. At
December 31, 1995, 98% of the apartment units were occupied. The
types of units and monthly rentals are:
Units Description Size 1993 1994 1995
(sq. ft.) Rental Rental Rental
20 one bedroom/one bath 773 $ 490 $ 510 $ 530
52 two bedroom/two bath 989 600 630 645
8 three bedroom/two bath 1,152 675 700 730
80 76,104 $46,400 $48,560 $49,980
Monroe Property.
As described above, the Registrant acquired and constructed an 120 unit
residential apartment community known as The Chase. The Chase consists of 11
buildings together with clubhouse. All buildings are slab on grade, woodframe
and vinyl siding. Construction was completed in October, 1988 with rental of the
premises beginning in August, 1988. At December 31, 1995, 99% of the apartment
units were occupied. The types of units and monthly rentals are:
Units Description Size 1993 1994 1995
(sq. ft.) Rental Rental Rental
40 one bedroom/one bath 670 $445- $465- $480-
460 475 495
64 two bedroom/two bath 870 525- 550- 570-
540 560 585
16 three bedroom/two bath 1,127 630 660 670
120 100,512 $61,800 $64,680 $66,520
Sabal Point II Property.
As described above, the Registrant acquired and constructed an 88 unit
residential apartment community formerly known as Sabal Park Phase I, now known
as Sabal Point II. Sabal Point II consists of 4 buildings together with
clubhouse. All buildings are slab on grade woodframe and vinyl siding.
Construction was completed in July, 1989 with occupancy of the premises
beginning in May, 1989. Construction of a swimming pool and clubhouse was
completed in April, 1990. At December 31, 1995, 95% of the apartment units were
occupied. The types of units and expected monthly rentals are:
6
Units Description Size 1993 1994 1995
(sq. ft.) Rental Rental Rental
two bedroom/two bath
2 Deluxe 1,009 $615 $620 $625
46 two bedroom/two bath 570- 650-
1,009 570 610 660
40 three bedroom/two bath 1,203 695 730 725-
750
88 96,552 $55,250 $58,000 $61,195
Item 3 - Legal Proceedings.
No legal proceedings were initiated or terminated during the fiscal year
covered by this report.
Item 4 - Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of the holders of Units during the
fourth quarter of the fiscal year ended December 31, 1995.
Item 5 - Market for Registrant's Units of Limited Partnership and
Related Matters.
Transfer of limited partnership interests of the Registrant is subject to
certain restrictions in the limited partnership agreement of the Registrant.
Depositary receipts for the Units have been issued in registered form. Beginning
May 1, 1989, the depositary receipts became freely transferable subject to
applicable federal or state securities laws, unless the Managing General Partner
imposes transfer restrictions in order to preserve the status of the Registrant
as a partnership for federal income tax purposes or to ensure that Unitholders
will be treated as limited partners of the Registrant for federal income tax
purposes. Transfers of depositary receipts are effective on the first day of the
month following receipt by the Registrant of all necessary documentation for the
transfer, provided such documents are received at least 5 business days prior to
the beginning of such month. Since May 1, 1989, 600 Income Units and 440 Growth
Units have been sold by 3 Unitholders at a price of $97 per Income Unit and $97
per Growth Unit.
On December 28, 1989, the Registrant redeemed the Income Units and returned
the full amount of the capital contributions of the Unitholders with respect to
Income Units from the proceeds of mortgage financing on the properties.
As of December 31, 1995, 61,928 Growth Units were outstanding, held of
record by 1,101 persons.
7
The limited partnership agreement of the Registrant requires that operating
revenue less operating expenses (Cash Flow) be distributed on at least a
semi-annual basis within 30 days of June 30 and December 31 of each year. Cash
Flow is to be distributed pro rata among the Unitholders in accordance with
their percentage interest as follows:
(a) First, 100% to Unitholders who hold Income Units until such Unitholders
have received an amount equal to the preferential return on Income Units;
(b) Then, 100% to Unitholders who hold Income Units until such Unitholders
have received an amount equal to their adjusted capital contributions with
respect to their Income Units; and
(c) Then, any remaining Cash Flow shall be distributed to Unitholders
holding Growth Units.
Since the Income Units were redeemed on December 28, 1989, future
distributions will be made to Unitholders holding Growth Units. The Registrant
made the following distributions to Unitholders who held Units on the record
date for such distribution:
No. of Income Average Amount
Payment Units Total Amount Distributed per
Record Date Date Outstanding Distributed Income Unit
12/31/87 1/12/88 26,112 $130,560 $5.00
6/30/88 7/15/88 61,392 351,850 5.73
12/31/88 1/12/89 92,892 475,575 5.12
6/30/89 7/15/89 92,892 580,575 6.25
12/28/89 12/28/89 92,892 574,124 6.18
No. of Growth Average Amount
Payment Units Total Amount Distributed per
Record Date Date Outstanding Distributed Growth Unit
3/16/90 61,928 $ 23,541 $0.38
6/30/90 7/20/90 61,928 50,000 0.80
12/31/90 2/06/91 61,928 50,000 0.80
12/31/92 3/15/93 61,928 60,000 0.97
12/31/93 2/24/94 61,928 90,000 1.45
12/31/94 1/15/95 61,928 400,000 6.46
12/31/95 4/01/96 61,928 400,000 6.46
8
The distribution to Growth Unitholders as of December 31, 1995 was declared by
the General Partners in February, 1995 and will be paid primarily from cash
reserves April, 1996. Future distributions may include amounts held as reserves,
that amounted to approximately $327,160 after the distribution. However, once
those reserves are distributed to limited partners, future distributions will be
made only out of net cash flow.
Item 6 - Selected Financial Data.
Fiscal Year Fiscal Year Fiscal year Fiscal Year Fiscal Year
Ended 12/31/95 Ended 12/31/94 Ended 12/31/93 Ended 12/31/92 Ended
12/31/91
Revenues $ 2,080,642 $ 1,996,769 $ 1,836,787 $ 1,725,250 $ 1,480,595
Net Loss ( 25,183) ( 164,732) ( 306,827) ( 370,800) ( 610,933)
Net Income
(loss) per
Unit
(1) Growth (1) ( .40) (1) ( 2.63) (1) ( 4.91) (1) ( 5.93) (1) ( 9.77)
Unitholders
(2) Income (2) N/A (2) N/A (2) N/A (2) N/A (2) N/A
Unitholders
Total Assets 9,822,411 10,316,798 10,733,405 11,166,832 11,575,781
Mortgage Loans 9,024,334 9,100,453 9,175,179 9,237,679 9,290,000
Payable
Cash
Distributions
per Unit
(1) Growth (1) 6.46 (1) 1.45 (1) .97 (1) 0.00 (1) 0.80
Unitholders
(2) Income (2) N/A (2) N/A (2) N/A (2) N/A (2) N/A
Unitholders
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations.
General.
The Registrant was organized on January 16, 1987 for the purpose of
developing, operating, holding and disposing of one to four specified
multi-family residential properties. In August, 1987, the Registrant purchased
6.2 acres of undeveloped land for development of 80 multi-family units for a
price of $375,102. The capitalized cost of construction amounted to $2,895,303.
In January, 1988 the Registrant purchased 12 acres of undeveloped land for
development of 120 multi-family units for a price of $367,906. The capitalized
cost of construction amounted to $4,035,851. In October, 1988 the Registrant
purchased 9 acres of undeveloped land for development of 88 multi-family units
for a price of $462,992. The capitalized cost of construction amounted to
$3,470,339.
9
The Registrant was capitalized with Limited Partner contributions of
$9,289,200 representing Income Units and $6,192,800 representing Growth Units
and General Partner contributions of $1,200. During the capital formation and
construction periods, the Registrant temporarily invested funds in short-term
commercial paper, government securities, repurchase agreements and bank money
market funds. On December 28, 1989 the full amount of capital contributions
representing Income Units was redeemed with the proceeds of mortgage financing
on the Registrant's properties. The loans represent approximately 80% leverage
on the aggregate capitalized cost of $11,557,173.
Liquidity and Capital Resources.
At December 31, 1995, partners' equity was $733,038 or 7% of total
assets and liquid assets amounted to $727,160. The decrease in cash of $151,808
was due to a net cash flow from operations of $384,168 less capital replacements
of $59,857, mortgage debt reduction of $76,119 and a distribution to partners of
$400,000. The Registrant had accrued liabilities of $26,029 which consisted of
management fees due to an affiliate of $8,297, trade account payables of $15,991
and tenant prepaid rent of $1,741.
Net cash flow from operations before property additions, payments on
mortgage principal, and distributions to partners totaled $384,168 in 1995,
$233,130 in 1994, and $208,535 in 1993. The Registrant had three 9.5% amortizing
mortgage notes in the amount of $9,024,334 outstanding at December 31, 1995.
Principal payments of $76,119, $74,726 and $62,500 were made in 1995, 1994 and
1993, respectively.
In 1995, there was substantial activity in the construction and
planning of new apartment projects in the Charlotte market. Since August of
1995, approximately 1,500 apartment units were completed and available for rent.
At present, approximately 3,000 additional units are under construction. In
certain markets, rental concessions have been given to obtain new tenants. The
Registrant does not believe that these new units and rental concessions will
have a material impact on the Registrant's operations in 1996. The long-range
impact will be influenced by factors that affect the number of persons seeking
to rent apartments, such as the rate of growth in the Charlotte economy and
interest rates and the affordability of home ownership.
The 1996 operating plan and budget projects cash flow from operations
of $55,000 at Arrowood Crossing, $140,000 at The Chase and $70,000 at Sabal
Point II. The budget assumes that the Registrant will achieve occupancy rates
equivalent to 97% at Arrowood Crossing, 97% at The Chase and 96% at Sabal Point
II. Rents have been increased 5% over rates charged in 1995 to offset normal
increases in operating expenses. Capital replacements of $27,000, $28,000 and
$18,000 are budgeted for Arrowood Crossing,
10
The Chase and Sabal Point II, respectively. Based upon these estimates, the
Registrant believes that each cash flow from operations will be sufficient to
meet cash requirements and provide distributions to limited partners.
Results of Operations.
The results from operations for the year 1995 reflect an increase in
total revenues of $83,873 due to maintaining a combined average occupancy of 97%
and increasing rents an average of 3% to 5%. Rental income was $1,970,005 in
1995 compared to $1,866,009 in 1994, a difference of $103,996. Other operating
income was $95,444 in 1995 compared to $115,152, in 1994, reflecting a decrease
of $19,708 due mainly to leasing fewer corporate units. Operating expenses
(excluding depreciation and amortization) increased $14,477. The increase of
$8,116 in fees and expenses to affiliates was due to management fees based on
total revenues collected and higher reimbursed maintenance personnel costs.
Utilities increased $3,070 due to higher utility rates and resident usage.
Repairs and maintenance increased $13,570 due to the normal replacement of
vinyl, carpeting and appliances, expenses associated with the upkeep of the
grounds and costs associated with continued high turn-over in 1995. Other
expenses decreased $14,326 due to leasing fewer corporate units.
After interest expense of $861,285 and other nonoperating expenses of
$37,771 the Registrant realized a net loss of $25,183. This is compared to net
losses of $164,732 and $306,827 in 1994 and 1993, respectively. Before
recognizing the expense of depreciation and amortization, the 1995 operating
plan and budget had forecasted and combined net income of $310,000. This is
compared to an actual net income before depreciation and amortization of
$423,927.
Item 8 - Financial Statements and Supplementary Data.
See Appendix A to this Form 10-K.
Item 9 - Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
11
Item 10 - Directors and Executive Officers of the Registrant.
The Registrant has no directors or executive officers. Information as to the
directors and executive officers of the Managing General Partner is as follows:
Information about Directors
Name and Executive Officers
Marion F. Bass Director, President, Chief Executive
Officer, and Treasurer of the
Managing General Partner since 1977.
He is 56 years old.
Robert J. Brietz Executive Vice President of the
Managing General Partner since
October, 1988. Director and
Secretary of the Managing General
Partner since March, 1989.
Executive Vice President of Marion
Bass Securities Corporation since
November, 1986. Senior Vice
President with Interstate Securities
Corporation for the period from 1978
to October, 1986. He is 52 years
old.
The directors and executive officers of the Managing General Partner were
elected to their current positions on March 27, 1989. Each officer and director
holds office until his death, resignation, retirement, removal,
disqualification, or his successor is elected and qualified.
All of the executive officers and directors of the Managing General Partner
serve in the same capacities with Marion Bass Securities Corporation, Marion
Bass Construction Company, Marion Bass Properties, Inc., Bass Capital Management
Corporation, Marion Bass Investment Group, Inc. Marion F. Bass is the sole
shareholder of Marion Bass Investment Group, Inc. which is the sole shareholder
of the other corporations in the Marion Bass Group.
Item 11 - Executive Compensation.
During the fiscal year ended December 31, 1995, the Registrant paid no
compensation to the executive officers or directors of the Managing General
Partner or to either of the General Partners. See Item 13 "Certain Relationships
and Related Transactions" for a discussion of amounts paid or which may be paid
to the General Partners and certain affiliates of the General Partners after
December 31, 1995.
12
Item 12 - Security Ownership of Certain Beneficial Owners and
Management.
As of March 15, 1996, no persons known to the Registrant have beneficial
ownership of more than 5% of the Units.
None of the directors and officers of the Managing General Partner owned any
Units of the Registrant at March 15, 1996.
Item 13 - Certain Relationships and Related Transactions.
The Registrant has and will engage in transactions with various corporations
within the Marion Bass Companies. The General Partners and their affiliates
received fees and expenses as follows:
1995 1994 1993
Management fee of 5% of gross
revenues $101,745 $ 97,378 $ 89,746
Reimbursed maintenance salaries 74,384 70,189 66,725
Reimbursed property manager
salaries 70,281 72,774 67,526
Other miscellaneous
reimbursements 8,350 6,303 4,190
Total $254,760 $246,644 $228,187
PART IV
Item 14 - Exhibits, Financial Statement Schedules and Reports on
Form 8-K.
(a) Financial statements and schedules. See Index to Financial Statements
included in Appendix A to this Form 10-K. All other schedules are omitted
because they are not applicable, not required or because the requested
information is included in the Financial Statements or notes thereto.
(b) Exhibits.
3(a) Copy of Limited Partnership Agreement
dated as of August 6, 1987, filed as
Exhibit 3(a) to the Registrant's Annual
Report on Form 10-K for the fiscal year
ended December 31, 1987, filed with the
Securities and Exchange Commission, which
is incorporated herein by reference.
13
3(b) Copy of Certificate of Limited
Partnership dated as of January 5,
1987, filed as Exhibit 3(b) to the
Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31,
1987, filed with the Securities and
Exchange Commission, which is incorporated
herein by reference.
4(a) Specimen Certificate for Growth Units,
filed as Exhibit 4(a) of Amendment No.
1 to Registrant's Registration
Statement on Form S-11 (No. 33-11797),
filed with the Securities and Exchange
Commission on April 23, 1987, which is
incorporated by reference to such Form
S-11.
4(b) Specimen Certificate for Income Units,
filed as Exhibit 4(b) of Amendment No.
1 to Registrant's Registration
Statement on Form S-11 (No. 33-11797),
filed with the Securities and Exchange
Commission on April 23, 1987, which is
incorporated by reference to such Form
S-11.
10(a) Copy of Construction Agreement for the
Arrowood Property dated as of February
27, 1987, filed as Exhibit 10(a) to the
Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31,
1987, filed with the Securities and
Exchange Commission, which is incorporated
herein by reference.
10(b) Copy of Construction Agreement for the
Monroe Property, dated as of February
27, 1988, filed as Exhibit 10(b) to the
Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31,
1987, filed with the Securities and
Exchange Commission, which is incorporated
herein by reference.
10(c) Copy of Construction Agreement for Sabal
Park I dated as of April 18, 1988, filed
as Exhibit 10(c) to the Registrant's
Annual Report on Form 10-K for the fiscal
year ended December 31, 1988, filed with
the Securities and Exchange Commission,
which is incorporated herein by reference.
14
10(d) Copy of permanent loan documents
for Sabal Park I, dated as of December
27, 1989, filed as Exhibit 10(d) to the
Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1989,
filed with the Securities and
Exchange Commission, which is
incorporated herein by
reference.
(c) Reports on Form 8-K. No reports on Form 8-K were filed during the last
quarter of the period covered by this report.
15
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Annual Report to be
signed on its behalf by the undersigned thereunto duly authorized on March 29,
1996.
BASS INCOME PLUS FUND
By: MARION BASS REAL ESTATE GROUP,
INC., as Managing General Partner
By: /s/ Marion F. Bass
Marion F. Bass, President
By: MARION F. BASS, as Individual
General Partner
By: /s/ Marion F. Bass
Marion F. Bass
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Annual Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated:
Signature Title Date
/s/ Marion F. Bass Director, President and March 29, 1996
Marion F. Bass Treasurer of Marion Bass
Real Estate Group, Inc.
(Principal Executive
Officer)
/s/ Robert J. Brietz Director, Executive Vice March 29, 1996
Robert J. Brietz President and Secretary
of Marion Bass Real
Estate Group, Inc.
(Principal Financial and
Accounting Officer)
APPENDIX A
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
FINANCIAL STATEMENTS AND SCHEDULES
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 and 1993
C O N T E N T S
Page
FINANCIAL STATEMENTS:
Report of Independent Public Accountants 1
Balance Sheets - December 31, 1995 and 1994 2
Statements of Operations - For the Years ended
December 31, 1995, 1994 and 1993 3
Statements of Changes in Partners' Equity
(Deficit) - For the Years ended
December 31, 1995, 1994 and 1993 4
Statements of Cash Flows - For the Years ended
December 31, 1995, 1994 and 1993 5
Notes to Financial Statements 6-9
FINANCIAL STATEMENT SCHEDULES:
Schedule III-Real Estate and Accumulated Depreciation -
December 31, 1995 10
Report of Independent Public Accountants
To Bass Income Plus Fund Limited Partnership:
We have audited the accompanying balance sheets of Bass Income Plus Fund Limited
Partnership (a North Carolina limited partnership) as of December 31, 1995 and
1994, and the related statements of operations, changes in partners' equity
(deficit) and cash flows for each of the three years in the period ended
December 31, 1995. These financial statements and the schedule referred to below
are the responsibility of the managing general partner (see Note 4). Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
managing general partner, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bass Income Plus Fund Limited
Partnership as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1995, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in Appendix A is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not a required part of the basic financial statements.
This schedule has been subjected to the auditing procedures applied in our
audits of the basic financial statements and, in our opinion, fairly states in
all material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
Arthur Andersen LLP
Charlotte, North Carolina,
February 16, 1996.
The accompanying notes to financial statements
are an integral part of these balance sheets.
Bass Income Plus Fund Limited Partnership
(a limited partnership)
Balance Sheets -- December 31, 1995 and 1994
Assets 1995 1994
Rental properties, at cost:
Land $ 1,206,000 $ 1,206,000
Buildings 9,729,194 9,718,137
Furnishings and fixtures 942,021 936,960
--------------- ---------------
11,877,215 11,861,097
Accumulated depreciation (2,972,138) (2,583,527)
--------------- ---------------
8,905,077 9,277,570
Cash and cash investments 727,160 878,968
Restricted escrow deposits 52,897 41,194
Deferred costs, net 63,720 80,480
Other assets 73,557 38,586
Total assets =============== ===============
$ 9,822,411 $10,316,798
=============== ===============
Liabilities and Partners' Equity (Deficit)
Mortgage loans payable $ 9,024,334 $ 9,100,453
Security deposits 39,010 29,850
Accrued liabilities 26,029 28,274
Total liabilities --------------- ---------------
9,089,373 9,158,577
Partners' equity (deficit):
Limited partners' interest 758,584 1,183,515
General partners' deficit (25,546) (25,294)
Total partners' equity --------------- ---------------
733,038 1,158,221
Total liabilities and partners' equity =============== ===============
$ 9,822,411 $10,316,798
=============== ===============
Theaccompanying notes to financial statements
are an integral part of these statements.
Bass Income Plus Fund Limited Partnership
(a limited partnership)
Statements of Operations
For the Years Ended December 31, 1995, 1994 and 1993
1995 1994 1993
Revenues:
Rental income $1,970,005 $1,866,009 $1,726,345
Interest income 15,193 15,608 20,405
Other operating income 95,444 115,152 90,037
------------- ------------- -------------
2,080,642 1,996,769 1,836,787
Operating expenses:
Fees and expenses to affiliates 254,760 246,644 228,187
Property taxes and insurance 138,614 131,332 137,311
Utilities 95,891 92,821 89,838
Repairs and maintenance 204,508 190,938 172,585
Advertising 33,733 36,968 42,621
Depreciation and amortization 449,110 508,551 513,147
Other 30,153 44,479 40,050
------------- ------------- -------------
1,206,769 1,251,733 1,223,739
Mortgage interest expense 861,285 868,158 874,410
Nonoperating expenses 37,771 41,610 45,465
Total expenses ------------- ------------- -------------
2,105,825 2,161,501 2,143,614
============= ============= =============
Net loss $ (25,183) $ (164,732) $ (306,827)
Net loss allocated to general partners (1%) $ (252) $ (1,647) $ (3,068)
Net loss allocated to limited partners (99%) $ (24,931) $ (163,085) $ (303,759)
Net loss per limited partnership unit $ (.40) $ (2.63) $ (4.91)
The accompanying notes to financial statements
are an integral part of these statements.
Bass Income Plus Fund Limited Partnership
(a limited partnership)
Statements of Changes in Partners' Equity (Deficit)
For the Years Ended December 31, 1995, 1994 and 1993
Limited General
Partners Partners Total
Partners' equity (deficit), December 31, 1992 $1,800,359 $(20,579) $1,779,780
Cash distribution (60,000) 0 (60,000)
Net loss (303,759) (3,068) (306,827)
Partners' equity (deficit), December 31, 1993 ------------- ----------- -------------
1,436,600 (23,647) 1,412,953
Cash distribution (90,000) 0 (90,000)
Net loss (163,085) (1,647) (164,732)
Partners' equity (deficit), December 31, 1994 ------------- ----------- -------------
1,183,515 (25,294) 1,158,221
Cash distribution (400,000) 0 (400,000)
Net loss (24,931) (252) (25,183)
Partners' equity (deficit), December 31, 1995 ============= =========== =============
$ 758,584 $(25,546) $ 733,038
============= =========== =============
The accompanying notes to financial statements
are an integral part of these statements.
Bass Income Plus Fund Limited Partnership
(a limited partnership)
Statements of Cash Flows
For the Years Ended December 31, 1995, 1994 and 1993
1995 1994 1993
Cash flows from operating activities:
Net loss $ (25,183) $(164,732) $(306,827)
Adjustments to reconcile net loss to net cash provided by operating
activities-
Depreciation and amortization 449,110 508,551 513,147
Change in assets and liabilities:
Increase (decrease) in accrued and other liabilities
6,915 (87,149) (4,100)
(Increase) decrease in escrows and other assets, net
(46,674) (23,540) 6,315
Net cash provided by operating activities ------------ ------------ -------------
384,168 233,130 208,535
Cash flows from investing activities - Additions to rental properties
(59,857) (45,389) (53,583)
Cash flows from financing activities:
(76,119) (74,726) (62,500)
Repayment of mortgage loans
Distribution to partners (400,000) (90,000) (60,000)
Net cash used in financing activities ------------ ------------ -------------
(476,119) (164,726) (122,500)
Net increase (decrease) in cash and cash investments (151,808) 23,015 32,452
Cash and cash investments, beginning of year 878,968 855,953 823,501
Cash and cash investments, end of year ============ ============ =============
$727,160 $ 878,968 $ 855,953
============ ============ =============
The accompanying notes to financial statements
are an integral part of these statements.
Bass Income Plus Fund Limited Partnership
Notes to Financial Statements
December 31, 1995, 1994 and 1993
1. Organization and Summary of Significant Accounting Policies:
Bass Income Plus Fund Limited Partnership (the Partnership) was organized to
engage in the acquisition of specified parcels of undeveloped real estate and to
construct, develop, operate, hold and dispose of income-producing, multifamily
residential apartment complexes. At formation, the limited partnership interests
consisted of two classes of units, income units and growth units. Each
investment in limited partnership interests consisted of 60% income units and
40% growth units. Limited partnership interests were sold at $100 per unit for a
total of $15,482,000. During December 1989, the Partnership obtained mortgage
financing (see Note 2) on the rental properties. The proceeds from the mortgage
financing were used to return the full amount of the capital contributions of
the income unit holders for a total distribution of $9,289,200.
Under the terms of the partnership agreement, net income (loss) is to be
allocated 99% to the limited partners and 1% to the general partners. Cash
distributions from operations are to be distributed 100% to the limited
partners. Upon the sale or refinance of the partnership properties, the
partnership agreement specifies certain allocations of net proceeds and taxable
gain or loss from the transaction.
Cash Investments
For purposes of the statements of cash flows, the Partnership considers all
unrestricted, highly liquid investments purchased with an original maturity of
three months or less to be cash investments.
Deferred Costs
Expenses incurred in connection with the organization of the Partnership and
obtaining financing have been capitalized as deferred costs. Deferred financing
costs are being amortized over the terms of the loans. Organization costs, which
are fully amortized at December 31, 1995, were amortized using the straight-line
method over five years. Amortization of organization costs and deferred
financing costs is included in depreciation and amortization expense on the
accompanying statements of operations.
Depreciation
The cost of rental properties is depreciated using the straight-line method over
the following estimated useful lives:
Buildings 30 years
Furnishings and fixtures 8 years
Rental Properties
Rental properties are carried at cost, which includes the initial land price as
well as development costs (see Note 3).
Income Taxes
Under current income tax laws, income or loss of partnerships is included in the
income tax returns of the partners. Accordingly, no provision has been made for
federal or state income taxes in the accompanying financial statements.
The tax returns of the Partnership are subject to examination by federal and
state taxing authorities. If such examinations occur and result in changes with
respect to the partnership qualification or in changes to partnership income or
loss, the tax liability of the partners would be changed accordingly.
Adjustments are required to reflect the Partnership's accounts on the basis of
accounting utilized for federal income tax reporting purposes. The significant
items giving rise to the adjustments are differing lives and methods of
depreciation and costs incurred in connection with raising of capital
(syndication costs).
The reconciliation of net income for the years ended December 31, 1995, 1994 and
1993, from a financial reporting to a tax basis are as follows:
1995 1994 1993
Net loss - Financial reporting basis $(25,183) $(164,732) $(306,827)
Book depreciation greater (less) than tax depreciation
(2,989) 21,195 (6,218)
Interest adjustment 0 (9,049)
Other 1,690 (16,144) 3,399
Net loss - Tax basis ========= ========== ===========
$(26,482) $(159,681) $(318,695)
========= ========== ===========
Per Unit Amounts
Net income per limited partnership unit was determined based on the weighted
average number of units outstanding during the period. The weighted average
units outstanding was 61,928 for 1995, 1994 and 1993.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates and
assumptions. These estimates and assumptions affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenues and
expenses during the period reported. Actual results could differ from those
estimates.
New Accounting Pronouncement
In March 1995, the Financial Accounting Standards Board issued Statement No. 121
(the Statement) on accounting for the impairment of long-lived assets, certain
identifiable intangibles, and goodwill related to assets to be held and used.
The Statement also establishes accounting standards for long-lived assets and
certain identifiable intangibles to be disposed of. The Company is required to
adopt the Statement in 1996. Based on a preliminary review, the Company does not
expect the adoption of the Statement to have a material effect on its financial
position.
2. Mortgage Loans Payable:
The Partnership has three mortgage loans payable to a financial institution
secured by the three rental properties. Principal and interest are due monthly
in payments totaling $78,117, with the remaining principal and any accrued
interest due upon maturity in January 2000. Under the mortgage agreement, the
Partnership is required to fund certain reserves for insurance, property tax and
capital improvement expenditures. These reserves are included in other assets
on the accompanying balance sheets.
Future principal payments due on the mortgage loans are as follows:
1996 $ 76,394
1997 91,256
1998 100,311
1999 110,267
2000 8,646,106
==========
Cash paid for interest was $861,285 in 1995, $940,794 in 1994 and $874,903 in
1993.
3. Rental Properties:
The rental properties consist of three residential apartment complexes; Arrowood
Crossing, The Chase and Sabal Point II. All were constructed by an affiliate of
the general partners and contain 80, 120 and 88 rental units, respectively. The
Chase, Sabal Point II and Arrowood Crossing are located on three plots of land
purchased in 1988 from the managing general partner or an affiliate of the
general partners.
Affiliates of the general partners own residential apartment complexes adjacent
to Arrowood Crossing and Sabal Point II. These complexes are sharing expenses
related to grounds, maintenance, leasing, management and other related costs.
The managing general partner believes that the allocation of expenses to each
partnership has been made on a reasonable basis.
4. General Partners and Related-party Transactions:
The Partnership's general partners are Marion F. Bass and Marion Bass Real
Estate Group, Inc. (the managing general partner). The rental properties are
managed by Marion Bass Properties, Inc. Both Marion Bass Real Estate Group, Inc.
and Marion Bass Properties, Inc. are wholly owned by Marion F. Bass.
Under the terms of the partnership agreement, the general partners or their
affiliates charged certain fees and expenses during 1995, 1994 and 1993 as
follows:
1995 1994 1993
Management fee of 5% of gross revenues $101,745 $ 97,378 $ 89,746
Reimbursed maintenance salaries 74,384 70,189 66,725
Reimbursed property manager salaries 70,281 72,774 67,526
Other miscellaneous reimbursements 8,350 6,303 4,190
--------- --------- ---------
$254,760 $246,644 $228,187
========= ========= =========
The Partnership receives from an affiliated partnership an agreed-upon amount
each year for the use of its pool and clubhouse located on the Partnership's
property at Sabal Point II. The Partnership has recorded as other operating
income $12,740 in 1995 and $11,850 in 1994 and 1993, under the terms of this
agreement.
The general partners and certain of their affiliates also perform, without cost
to the Partnership, day-to-day investment, management and administration
functions of the Partnership.
5. Subsequent Event - Cash Distribution:
Subsequent to December 31, 1995, the managing general partner declared a cash
distribution of $400,000 ($6.46 per limited partnership unit).
Appendix A
Bass Income Plus Fund Limited Partnership
(a limited partnership)
Schedule III - Real Estate and Accumulated Depreciation
For the Year Ended December 31, 1995
Cost Capitalized
Initial Cost to Company Subsequent to
Buildings Acquisition
and Carrying
Description Encumbrances Land Improvements Improvements Costs
Arrowood Crossing, a residential apartment complex,
Charlotte, North Carolina $2,549,926 $ 375,102 $0 $ 2,914,810 $0
The Chase, a residential apartment complex, Monroe,
North Carolina 3,011,355 367,906 0 4,038,941 0
Sabal Point II, a residential apartment complex,
Pineville, North Carolina 3,463,053 462,992 0 3,717,464 0
Total =========== =========== ======= =============== =====
$9,024,334 $1,206,000 $0 $10,671,215 $0
=========== =========== ======= =============== =====
Gross Amount Which Carried at Estimated
End of Period (Notes 1, 3 and4) Useful Lives
Buildings Accumulated Buildings
and Depreciation Date Date and
Land Improvements Total (Note 2) Acquired Completed Improvements
Arrowood Crossing, a residential
apartment complex,
Charlotte, North Carolina $ 375,102 $ 2,914,810 $ 3,289,912 $ (806,093) 8/87 11/88 Note 2
The Chase, a residential apartment
complex, Monroe, North Carolina 367,906 4,038,941 4,406,847 (1,166,384) 1/88 11/88 Note 2
Sabal Point II, a residential
apartment complex,
Pineville, North Carolina 462,992 3,717,464 4,180,456 (999,661) 10/88 7/89 Note 2
---------- ----------- ----------- -----------
Total $1,206,000 $10,671,215 $11,877,215 $(2,972,138)
========== =========== =========== ===========
Note 1:
1995 1994 1993
Rental properties, at cost-
Balance at beginning of period $ 11,861,097 $ 11,852,647 $ 11,892,988
Improvements 59,857 45,389 53,583
Disposals (43,739) (36,939) (93,924)
------------ ------------ ------------
Balance at end of period $ 11,877,215 $ 11,861,097 $ 11,852,647
============ ============ ============
Accumulated depreciation-
Balance at beginning of period $ (2,583,527) $ (2,128,674) $ (1,726,212)
Depreciation expense (432,350) (491,792) (496,386)
Disposals 43,739 36,939 93,924
------------ ------------ ------------
Balance at end of period $ (2,972,138) $ (2,583,527) $ (2,128,674)
============ ============ ============
Note 2:
Depreciation was computed using the following estimated useful lives-
Buildings 30 years
Furnishings and fixtures 8 years
Note 3:
Buildings and improvements include costs of furnishings and fixtures.
Note 4:
Aggregate cost for federal income tax purposes, net of accumulated tax
depreciation, was $8,518,538 at December 31, 1995.