FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1996
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period.........to.........
Commission file number 0-14554
NATIONAL PROPERTY INVESTORS 8
(Exact name of small business issuer as specified in its charter)
California 13-3254885
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
Issuer's phone number
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 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 .
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) NATIONAL PROPERTY INVESTORS 8
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands)
June 30, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Cash and cash equivalents:
Unrestricted cash $ 2,874
Restricted 57
Other assets 629
Investment properties:
Land $ 1,970
Buildings and related personal property 26,592
28,562
Less accumulated depreciation (13,325) 15,237
Total assets $ 18,797
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable and accrued liabilities $ 701
Tenants' security deposits payable 87
Mortgage payable 10,272
Partners' Capital (Deficit):
Limited partners $ 7,883
General partners (146) 7,737
Total liabilities and partners' capital $ 18,797
<FN>
See Notes to Consolidated Financial Statements
</TABLE>
b) NATIONAL PROPERTY INVESTORS 8
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 1,058 $ 1,075 $ 2,111 $ 2,156
Other income 85 83 159 148
Total revenues 1,143 1,158 2,270 2,304
Expenses:
Operating 531 584 1,121 1,143
Mortgage interest 205 218 427 444
Depreciation 291 342 578 683
General and
administrative 89 74 163 155
Total expenses 1,116 1,218 2,289 2,425
Net income (loss) $ 27 $ (60) $ (19) $ (121)
Net income (loss) allocated
to general partner (1%) $ -- $ (1) $ -- $ (1)
Net income (loss) allocated
to limited partners (99%) 27 (59) (19) (120)
Net income (loss) $ 27 $ (60) $ (19) $ (121)
Net income (loss) per
limited partnership unit $ .60 $ (1.32) $ (.42) $ (2.66)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
c) NATIONAL PROPERTY INVESTORS 8
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited Total
Units Partners Partners Capital
<S> <C> <C> <C> <C>
Original capital contributions 44,882 $ 1 $ 22,441 $ 22,442
Partners' capital (deficit) at
December 31, 1995 44,882 $ (146) $ 7,902 $ 7,756
Net loss for the six
months ended June 30, 1996 -- -- (19) (19)
Partners' capital (deficit) at
June 30, 1996 44,882 $ (146) $ 7,883 $ 7,737
<FN>
See Notes to Consolidated Financial Statements
</TABLE>
d) NATIONAL PROPERTY INVESTORS 8
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (19) $ (121)
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation 578 683
Amortization of mortgage costs 4 4
Change in accounts:
Other Assets (81) (147)
Accounts payable and accrued expenses 219 145
Tenants' security deposit liability (9) 5
Net cash provided by operating activities 692 569
Cash flows from investing activities:
Property improvements and replacements (102) (63)
Increase in restricted cash -- (252)
Cash used in investing activities (102) (315)
Cash flows from financing activities:
Payments on mortgages payable (99) (79)
Net cash used in financing activities (99) (79)
Net increase in cash and cash equivalents 491 175
Cash and cash equivalents at beginning of period 2,383 1,631
Cash and cash equivalents at end of period $ 2,874 $ 1,806
Supplemental information:
Interest paid $ 423 $ 389
<FN>
See Notes to Consolidated Financial Statements
</TABLE>
e) NATIONAL PROPERTY INVESTORS 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A - Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of NPI Equity Investments, Inc. ("NPI
Equity" or the "Managing General Partner"), all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six month periods ended June
30, 1996, are not necessarily indicative of the results that may be expected for
the fiscal year ending December 31, 1996. For further information, refer to the
financial statements and footnotes thereto included in the Partnership's annual
report on Form 10-K for the year ended December 31, 1995.
Certain reclassifications have been made to the 1995 information to conform
to the 1996 presentation.
Note B - Transactions with Affiliated Parties
National Property Investors 8 (the "Partnership") has no employees and is
dependent on the Managing General Partner and its affiliates for the management
and administration of all partnership activities. The Partnership Agreement
provides for payments to affiliates for services and as reimbursement of certain
expenses incurred by affiliates on behalf of the Partnership.
The following transactions with Insignia Financial Group, Inc. ("Insignia"),
National Property Investors, Inc. ("NPI, Inc."), and affiliates were charged to
expense in 1996 and 1995:
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Property management fees (included in operating
expenses) $109,000 $110,000
Reimbursement for services of affiliates 94,000 143,000
</TABLE>
For the period from January 19, 1996, to June 30, 1996, the Partnership
insured its properties under a master policy through an agency and insurer
unaffiliated with the Managing General Partner. An affiliate of the Managing
General Partner acquired, in the acquisition of a business, certain financial
obligations from an insurance agency which was later acquired by the agent who
placed the current year's master policy. The current agent assumed the
financial obligations to the affiliate of the Managing General Partner who
received payments on these obligations from the agent. The amount of the
Partnership's insurance premiums accruing to the benefit of the affiliate of the
Managing General Partner by virtue of the agent's obligations is not
significant.
Included in operating expenses for the six months ended June 30, 1995, are
insurance premiums of approximately $56,000 which were paid to the Managing
General Partner under a master insurance policy arranged for by the Managing
General Partner.
NPI Equity is a wholly-owned subsidiary of NPI, Inc.
On August 17, 1995, the stockholders of NPI, Inc. entered into an agreement
to sell to IFGP Corporation, a Delaware corporation and an affiliate of
Insignia, a Delaware corporation, all of the issued and outstanding common stock
of NPI, Inc. for an aggregate purchase price of $1,000,000. The closing of the
transactions contemplated by the above mentioned agreement (the "Closing")
occurred on January 19, 1996.
Upon the Closing, the officers and directors of NPI, Inc. and the Managing
General Partner resigned and IFGP Corporation caused new officers and directors
of each of those entities to be elected.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of two apartment complexes,
one comprised of two sections. The following table sets forth the average
occupancy of the properties for the six months ended June 30, 1996 and 1995:
Average
Occupancy
Property 1996 1995
Williamsburg on the Lake Apartments I
Indianapolis, Indiana 91% 96%
Williamsburg on the Lake Apartments II
Indianapolis, Indiana 91% 96%
Huntington Athletic Club Apartments
Morrisville, North Carolina 93% 97%
The Managing General Partner attributes the decrease in occupancy at
Huntington to new communities in the area and short-term residents waiting for
houses to be completed. The decrease in occupancy at Williamsburg I and
Williamsburg II is attributable to road construction at the main intersection of
the property affecting access to the property.
The Partnership's net loss for the six months June 30, 1996, was
approximately $19,000 versus $121,000 for the comparable period of 1995. The
decrease in the net loss is attributable to an increase in other income and a
decrease in depreciation expense. The increase in other income is due to tax
refunds received for Huntington Apartments for prior year taxes. The decrease
in depreciation expense is due to several assets being fully depreciated in the
prior year. The Partnership's net income for the three months ended June 30,
1996, was approximately $27,000 versus a net loss of approximately $60,000 for
the comparable period of 1995. The increase in income is attributable to the
decrease in depreciation expense as previously discussed. Offsetting this
decrease was an increase in general and administrative expense for tax and
accounting related expenses and license fees.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the Managing General Partner attempts to protect the Partnership from
the burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening conditions, there is no guarantee that the
Managing General Partner will be able to sustain such a plan.
At June 30, 1996, the Partnership had unrestricted cash of $2,874,000 as
compared to $1,806,000 at June 30, 1995. Net cash provided by operating
activities increased primarily as a result of an increase in accounts payable
and accrued expenses due to the prepayment of rent and an increase in accrued
taxes due to the timing of the payment of real estate taxes. The decrease in
cash used in investing activities is due to a decrease in deposits to restricted
cash. The increase in cash used in financing activities is due to the payment
of the mortgage principal balance.
The Managing General Partner has extended to the Partnership a $500,000 line
of credit. At the present time, the Partnership has no outstanding amounts due
under this line of credit. Based on present plans, the Managing General Partner
does not anticipate the need to borrow against the line of credit in the near
future. Other than cash and cash equivalents, the line of credit is the
Partnership's only unused source of liquidity.
The sufficiency of existing liquid assets to meet future liquidity and
capital expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and other operating needs of the Partnership. Such assets are currently
thought to be sufficient for any near-term needs of the Partnership. The
mortgage indebtedness of $10,272,000 is amortized over varying periods. The
Managing General Partner is evaluating the refinancing opportunities. Future
cash distributions will depend on the levels of cash generated from operations,
a property sale, and the availability of cash reserves. The Managing General
Partner is evaluating the economic position of the Partnership and the
Partnership's ability to make a distribution. No cash distributions were paid
in 1995 or during the first half of 1996.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8-K: None filed during the quarter ended June
30, 1996.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NATIONAL PROPERTY INVESTORS 8
By: NPI EQUITY INVESTMENTS, INC.
MANAGING GENERAL PARTNER
By: /s/William H. Jarrard, Jr.
William H. Jarrard, Jr.
President and Director
By: /s/Ronald Uretta
Ronald Uretta
Principal Financial Officer
and Principal Accounting Officer
Date: August 12, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from National
Property Investors 8 1996 Second Quarter 10-QSB and is qualified in it's
entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000763701
<NAME> NATIONAL PROPERTY INVESTORS 8
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,874
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 28,562
<DEPRECIATION> (13,325)
<TOTAL-ASSETS> 18,797
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 10,272
0
0
<COMMON> 0
<OTHER-SE> 7,737
<TOTAL-LIABILITY-AND-EQUITY> 18,797
<SALES> 0
<TOTAL-REVENUES> 2,270
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,289
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 427
<INCOME-PRETAX> (19)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (19)
<EPS-PRIMARY> (.42)<F2>
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
