FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(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, 1996
OR
[ ] 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 0-17685
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
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(Exact name of partnership as specified in its charter)
North Carolina 56-1544869
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4000 Park Road Charlotte, North Carolina 28209
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(Address of principal executive office) (Zip Code)
Partnership's telephone number, including area code: (704) 523-9407
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Indicate by check mark whether the partnership (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
partnership was required to file such reports), and [2] has been subject to such
filing requirements for the past 90 days.
YES X NO
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BASS INCOME PLUS FUND LIMITED PARTNERSHIP
INDEX
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PAGE
NUMBER
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Condensed Balance Sheet
as of September 30, 1996
(Unaudited) 3
Condensed Statement of Income Three months and nine months ended
September 30, 1996 and 1995
(Unaudited) 4
Statement of Partners' Equity (Deficit) 5
(Unaudited)
Condensed Statement of Cash Flows
Nine months ended September 30, 1996 and 1995
(Unaudited) 6
Notes to Condensed Financial
Statements (Unaudited) 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9
PART II. OTHER INFORMATION 10
SIGNATURES 12
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BASS INCOME PLUS FUND LIMITED PARTNERSHIP
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CONDENSED BALANCE SHEET
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September 30, December 31,
1996 1995
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ASSETS (Unaudited)
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RENTAL PROPERTIES, at cost:
Land $1,206,000 $1,206,000
Buildings 9,729,194 9,729,194
Furnishings and fixtures 980,596 942,021
Accumulated depreciation (3,290,618) (2,972,138)
------------------- -----------------
8,625,172 8,905,077
CASH AND CASH INVESTMENTS 568,002 727,160
RESTRICTED ESCROW DEPOSITS 49,210 52,897
DEFERRED COSTS AND OTHER ASSETS, net 230,379 137,277
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Total assets $9,472,763 $9,822,411
=================== =================
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
-----------------------------------------------
MORTGAGE LOANS PAYABLE $8,962,328 $9,024,334
SECURITY DEPOSITS 34,180 39,010
ACCRUED LIABILITIES 123,732 26,029
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Total liabilities 9,120,240 9,089,373
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PARTNERS' EQUITY (DEFICIT):
Limited partners' interest 377,874 758,584
General partners' deficit (25,351) (25,546)
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Total partners' equity 352,523 733,038
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Total liabilities and partners' equity $9,472,763 $9,822,411
=================== =================
The accompanying notes are an integral part of
the financial statements.
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BASS INCOME PLUS FUND LIMITED PARTNERSHIP
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CONDENSED STATEMENT OF INCOME
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(Unaudited)
Three months Nine months Three months Nine months
ended ended ended ended
September 30, September 30, September 30, September 30,
1996 1996 1995 1995
--------------- --------------- --------------- ---------------
REVENUE:
Rental income $527,360 $1,553,357 $501,432 $1,465,205
Interest income 8,274 23,825 3,804 10,344
Other operating income 21,451 70,725 28,645 75,822
--------------- --------------- --------------- ---------------
557,085 1,647,907 533,881 1,551,371
--------------- --------------- --------------- ---------------
OPERATING EXPENSES:
Fees and expenses to affiliates 67,863 204,511 63,517 191,779
Property taxes and insurance 34,737 104,211 34,079 102,238
Utilities 30,145 89,827 29,271 83,544
Repairs and maintenance 42,831 118,380 41,871 120,762
Advertising 11,426 31,505 12,386 39,531
Depreciation and amortization 109,188 331,044 114,453 292,154
Other (2,159) 15,296 3,030 8,443
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294,031 894,774 298,607 838,451
INTEREST EXPENSE 213,191 641,046 215,102 646,645
NONOPERATING EXPENSES 53,893 92,602 12,427 54,399
--------------- --------------- ---------------
---------------
Total expenses 561,115 1,628,422 526,136 1,539,495
--------------- --------------- --------------- ---------------
NET INCOME (LOSS) ($4,030) $19,485 $7,745 $11,876
=============== =============== =============== ===============
NET INCOME (LOSS) ALLOCATED TO GENERAL PARTNERS ($40) $195 $77 $119
=============== =============== =============== ===============
NET INCOME (LOSS) ALLOCATED TO LIMITED PARTNERS ($3,990) $19,290 $7,668 $11,757
=============== =============== =============== ===============
NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT, based
on number of units outstanding (61,928) ($0.06) $0.31 $0.12 $0.19
=============== =============== =============== ===============
The accompanying notes are an integral
part of the financial statements.
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BASS INCOME PLUS FUND LIMITED PARTNERSHIP
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STATEMENT OF PARTNERS' EQUITY
(DEFICIT)
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(Unaudited)
Limited General
Partners Partners Total
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Balance, January 1, 1996 $758,584 ($25,546) $733,038
Distribution to partners (400,000) 0 (400,000)
Net income 19,290 195 19,485
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Balance, September 30, 1996 $377,874 ($25,351) $352,523
================ ================ ==============
Limited General
Partners Partners Total
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Balance, January 1, 1995 $1,183,515 ($25,294) $1,158,221
Distribution to partners (400,000) 0 ($400,000)
Net income 11,757 119 11,876
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Balance, September 30, 1995 $795,272 ($25,175) $770,097
================ ================ ==============
The accompanying notes are an integral
part of the financial statements.
-5-
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
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CONDENSED STATEMENT OF CASH FLOWS
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(Unaudited)
Nine months Nine months
ended ended
September 30, September 30,
1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $19,485 $11,876
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities-
Depreciation and amortization 331,044 292,154
Change in assets and liabilities:
Increase in accrued and other liabilities 97,703 91,678
Increase in escrows and other assets, net (106,809) (118,025)
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Net cash provided by operating activities 341,423 277,683
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CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to rental properties (38,575) (40,666)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of mortgage loans (62,006) (56,408)
Distribution to partners (400,000) (400,000)
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Net cash used in financing activities (462,006) (456,408)
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NET DECREASE IN CASH AND CASH INVESTMENTS (159,158) (219,391)
CASH AND CASH INVESTMENTS, beginning of year 727,160 878,968
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CASH AND CASH INVESTMENTS, September 30 $568,002 $659,577
=================== =================
The accompanying notes are an integral
part of the financial statements.
-6-
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION
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 interest consisted of two classes of units, income units and growth
units. Each investment in limited partnership interest consisted of 60% income
units and 40% growth units. Limited partnership interests had been sold at $100
per unit for a total of $15,482,000. During December 1989, the Partnership
obtained mortgage financing on the rental properties. The proceeds from the
mortgage financing were used to return the full amount of the capital
contributions to 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.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Partnership records are maintained on the accrual basis of accounting
in accordance with generally accepted accounting principles.
In the opinion of management, the accompanying unaudited financial
statements reflect all adjustments (which include only normal recurring
adjustments) necessary to present fairly the Partnership's financial position as
of September 30, 1996, results of operations for the three months and nine
months ended September 30, 1996 and 1995 and cash flow for the nine months ended
September 30, 1996 and 1995.
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 complexes 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.
The Partnership has three mortgage loans payable to a financial
institution secured by the three rental properties. Interest of 9.5% was payable
monthly through February 1992. Thereafter, principal and interest are due in
payments totaling $78,117 with the remaining principal and any accrued interest
due upon maturity in January 2000.
4. GENERAL PARTNERS AND RELATED PARTY TRANSACTIONS
The general partners are Marion F. Bass (The Individual General Partner)
and Marion Bass Real Estate Group, Inc., (The Managing General Partner). The
rental properties are managed by Marion Bass Properties, Inc., which is wholly
owned by Marion F. Bass.
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BASS INCOME PLUS FUND LIMITED PARTNERSHIP
Under the terms of the partnership agreement, the general partners or
their affiliates charged certain fees and expenses during the nine-month period
ending September 30, 1996 as follows:
Management fee of 5% of gross revenues $80,845
Reimbursed maintenance salaries and benefits 60,014
Reimbursed property manager salaries and benefits 63,652
$204,511
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. The Partnership has recorded as other operating income
$10,224 for the nine months ended September 30, 1996, 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 administrative
functions of the Partnership.
8
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
At September 30, 1996, partners' equity was $352,523 or 3% of total assets
and cash and cash reserves amounted to $568,002. The Partnership had accrued
liabilities of $123,732 that consisted of 1996 property taxes of $91,377,
management fees due to an affiliate of $8,892, trade accounts payable of $15,704
and resident prepaid rent of $7,759.
Net cash provided by operations totaled $341,423 for the nine months ended
September 30, 1996. This is compared to net cash provided by operations of
$277,683 for the corresponding period in 1995. The Partnership had three 9.5%
mortgage loans in the amount of $8,962,328 outstanding at September 30, 1996.
Principal payments of $62,006 were made during the nine month period ended
September 30, 1996 on the amortizing mortgage loans.
The 1996 operating plan and budget projects a net cash flow from
partnership activities (exclusive of changes in assets and liabilities and
distribution to partners) of $55,000 at Arrowood Crossing, $140,000 at The
Chase, and $70,000 at Sabal Point II. The budget assumes that the Partnership
will achieve occupancy rates equivalent to 97% at Arrowood Crossing, 97% at The
Chase and 96% at Sabal Point II. For the nine months ended September 30, 1996,
actual combined average economic occupancy was 99% and actual net cash flow from
partnership activities (exclusive of changes in assets and liabilities and
distribution to partners) was $249,948. Rents have been increased 5% over rates
charged in 1995 to offset any normal increase in operating expenses. Capital
expenditures of $27,000, $28,000 and $18,000 are budgeted for Arrowood Crossing,
The Chase and Sabal Point II, respectively, and include mainly selected carpet
and vinyl replacements. As of September 30, 1996, actual capital expenditures
and additions to rental properties have totaled $25,599, $57,479 and $20,669
respectively. Actual capital expenditures for The Chase were $29,479 higher than
projected due to the exterior painting of all buildings. On the basis of these
estimates and year-to-date results, the Partnership believes that the cash flow
from operations will be sufficient to meet cash requirements, rebuild cash
reserves and provided distributions to partners. Funds totaling $400,000
provided by cash reserves and 1995 operational net cash flow were distributed to
limited partners in April 1996. The next available distribution to partners is
scheduled for the first quarter of 1997 with the amount being dependent upon
1996 operating results.
Results of Operations
The following discussion relates to the Partnership's operation of
Arrowood Crossing, The Chase and Sabal Point II for the three months and nine
months ended September 30, 1996 and 1995.
Results of operations for the three months ended September 30, 1996
reflect an average economic occupancy of 99% compared to 96% for the
corresponding period in 1995. A third quarter comparison of 1996 and 1995
reflects higher rental income of $25,928 during 1996 due to rents being
increased 5% over rates charged in 1995. Other operating income was lower by
$7,194 due to earning less lease-breaking fees and cleaning and damage fees.
Overall, total income for the third quarter ended September 30, 1996 was $23,204
higher than the corresponding period in 1995.
Operating expenses were $294,031 for the three months ended September 30,
1996, compared to $298,607 for the corresponding period in 1995 which reflects a
variance of $4,576. Fees and expenses to affiliates that consist of a management
fee of 5% of gross revenues and the reimbursement of complex employee salaries
and benefits were higher by $4,346. Property taxes and insurance were higher by
$658 due to increased rates. Utilities were higher by $874 due to resident
usage. Repairs and maintenance were higher by $960 due to normal recurring
repairs. Other operating expenses were lower by $5,189 due to the collection of
previously written-off bad debt.
9
After interest expense of $213,191 and nonoperating expenses (partnership
expenses and nonrecurring replacement costs) of $53,893 (which includes $37,025
for painting the exterior of The Chase), partnership operations recognized a net
loss of $4,030 for the three months ended September 30, 1996. This is compared
to a net income of $7,745 for the corresponding period in 1995.
Overall the Partnership recognized a net increase in total revenues of
$96,536 (due to rents being increased 5% over rates charged in 1995) and a net
increase in total operating expenses of $56,323 (due mainly to a 1995 adjustment
in depreciation and amortization) for the nine months ended September 30, 1996
compared to the corresponding period in 1995. After interest expense of $641,046
and other operating expenses of $92,602 (partnership expenses and nonrecurring
replacement costs) the Partnership had a net income of $19,485 for the nine
months ended September 30, 1996. This is compared to a net income of $11,876 for
the corresponding period in 1995.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Response: None
Item 2. Changes in Securities
Response: None
Item 3. Defaults upon Senior Securities
Response: None
Item 4. Submission of Matters to a Vote of Security Holders
Response: None
Item 5. Other Information
Response: None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3(a) Copy of Limited Partnership Agreement dated as of August 6,
1987, filed as Exhibit 3(a) to the Partnership's Form 10-K
Annual Report for the fiscal year ended December 31, 1987,
filed with the Securities and Exchange Commission, which is
incorporated herein by reference.
3(b) Copy of Certificate of Limited Partnership dated as of January
5, 1987, filed as Exhibit 3(b) to the Partnership's Form 10-K
Annual Report 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 Partnership'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 Partnership's Registration Statement on
Form S-11 (No. 33-11797), filed with the
10
Securities and Exchange Commission on April 23, 1987, which in
incorporated by reference to such Form S-11.
(b) Report on Form 8-K. No reports on Form 8-K were filed during
the quarter covered by this report.
11
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Partnership has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
By: Marion Bass Real Estate Group, Inc. as Managing General Partner
By: Marion F. Bass, President
Date: November 1, 1996
By: Robert J. Brietz, Executive Vice President
Date: November 1, 1996
12