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 March 31, 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, except unit data)
March 31, 1996
<TABLE>
<CAPTION>
<C> <C>
<S>
Assets
Cash and cash equivalents:
Unrestricted cash $ 2,689
Restricted 57
Other assets 693
Investment properties:
Land $ 1,970
Buildings and related personal property 26,529
28,499
Less accumulated depreciation (13,033) 15,466
Total assets $ 18,905
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable and accrued expense $ 783
Tenants' security deposits payable 89
Mortgage payable 10,323
Partners' Capital (Deficit):
Limited partners' (44,882 units outstanding) $ 7,856
General partners' (146) 7,710
Total liabilities and partners' capital $ 18,905
<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
March 31,
1996 1995
<S> <C> <C>
Revenues:
Rental income $ 1,053 $ 1,081
Other income 74 65
Total revenues 1,127 1,146
Expenses:
Operating 590 559
Mortgage interest 222 226
Depreciation 287 341
General and administrative 74 81
Total expenses 1,173 1,207
Net loss $ (46) $ (61)
Net loss allocated to general partners (1%) $ -- $ (1)
Net loss allocated to limited partners (99%) (46) (60)
Net loss $ (46) $ (61)
Net loss per limited partnership unit $ (1.01) $ (1.35)
<FN>
See Notes to Consolidated Financial Statements
</TABLE>
c) NATIONAL PROPERTY INVESTORS 8
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except for 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 three
months ended March 31, 1996 -- -- (46) (46)
Partners' capital (deficit) at
March 31, 1996 44,882 $ (146) $ 7,856 $ 7,710
<FN>
See Notes to Consolidated Financial Statements
</TABLE>
d) NATIONAL PROPERTY INVESTORS 8
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands, except for unit data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ (46) $ (61)
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation 287 341
Amortization of mortgage costs 2 2
Change in accounts:
Other Assets (144) (98)
Accounts payable and accrued expenses 302 159
Tenants' security deposit liability (6) 1
Net cash provided by operating activities 395 344
Cash flows from investing activities:
Property improvements and replacements (40) (8)
Increase in restricted cash -- (146)
Cash used in investing activities (40) (154)
Cash flows from financing activities:
Payments on mortgages payable (49) (33)
Net cash used in financing activities (49) (33)
Net increase in cash and cash equivalents 306 157
Cash and cash equivalents at beginning of period 2,383 1,631
Cash and cash equivalents at end of period $ 2,689 $ 1,788
Supplemental information:
Interest paid $ 2,559 $ 1,788
<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 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 month period ended March 31,
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 Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Property management fees (included in operating
expenses) $ 53,000 $ 55,000
Reimbursement for services of affiliates (included
in general and administrative expenses) 60,000 62,000
</TABLE>
For the period from January 19, 1996, to March 31, 1996, the Partnership
insured its property 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 three months ended March 31, 1995, are
insurance premiums of approximately $28,000 which were paid to the Managing
General Partner under a master insurance policy arranged for by the Managing
General Partner.
NPI Equity Investments, Inc. ("NPI Equity" or the "Managing General
Partner"), is the general partner of the Partnership. 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, an affiliate of Insignia
Financial Group, Inc., 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 three months ended March 31, 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 93% 95%
Huntington Athletic Club Apartments
Morrisville, North Carolina 92% 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 is also
attributable to road construction at the main intersection of the property
affecting access to the property.
The Partnership's net loss for the three months ended March 31, 1996, was
approximately $46,000 versus $61,000 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.
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 March 31, 1996, the Partnership had unrestricted cash of $2,689,000 as
compared to $1,788,000 at March 31, 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. Offsetting this
change was the change in escrow deposits for taxes to cover 1996 payments. 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 amortization of the mortgage principal balance.
The Managing General Partner has extended to the Registrant a $500,000 line
of credit. At the present time, the Registrant 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
Registrant'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 property 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 $10,322,681 is amortized over varying periods. The Managing
General Partner is evaluating the refinancing opportunities. In addition, the
mortgage encumbering Huntington Athletic Club apartments requires a balloon
payment on February 1, 2002. 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
quarter 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:
A Form 8-K dated January 19, 1996, was filed reporting the change
in control of the registrant.
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: May 13, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from National
Property Investors 8 1996 1st Quarter 10-QSB and is qualified in its entirety by
reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000763701
<NAME> NATIONAL PROPERTY INVESTORS 8
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 2,560
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 28,499
<DEPRECIATION> 13,033
<TOTAL-ASSETS> 18,905
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 10,323
0
0
<COMMON> 0
<OTHER-SE> 7,710
<TOTAL-LIABILITY-AND-EQUITY> 18,905
<SALES> 0
<TOTAL-REVENUES> 1,127
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,173
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 222
<INCOME-PRETAX> (46)
<INCOME-TAX> 0
<INCOME-CONTINUING> (46)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (46)
<EPS-PRIMARY> (1.02)
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
</FN>
</TABLE>
