<PAGE>
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, 1995
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
- ------------------------------------------------------------------------------
(Exact name of partnership 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 office) (Zip Code)
Partnership's telephone number, including area code: (704) 523-9407
------------
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
------- --------
<PAGE>
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
INDEX
-------
PAGE
NUMBER
<S> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Condensed Balance Sheet
as of September 30, 1995
(Unaudited) 3
Condensed Statement of Income Three months and nine months ended
September 30, 1995 and 1994
(Unaudited) 4
Statement of Partners' Equity (Deficit) 5
(Unaudited)
Condensed Statement of Cash Flows
Nine months ended September 30, 1995 and 1994
(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
</TABLE>
2
<PAGE>
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------------- -----------------
ASSETS (Unaudited)
-------
<S> <C> <C>
RENTAL PROPERTIES, at cost:
Land $1,206,000 $1,206,000
Buildings 9,729,194 9,718,137
Furnishings and fixtures 966,569 936,960
Accumulated depreciation (2,863,116) (2,583,527)
------------------- -----------------
9,038,647 9,277,570
CASH AND CASH INVESTMENTS 659,577 878,968
RESTRICTED ESCROW DEPOSITS 52,539 41,194
DEFERRED COSTS AND OTHER ASSETS, net 224,371 119,066
------------------- -----------------
Total assets $9,975,134 $10,316,798
=================== =================
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
-----------------------------------------------
MORTGAGE LOANS PAYABLE $9,044,045 $9,100,453
SECURITY DEPOSITS 41,040 29,850
ACCRUED LIABILITIES 119,952 28,274
------------------- -----------------
Total liabilities 9,205,037 9,158,577
------------------- -----------------
PARTNERS' EQUITY (DEFICIT):
Limited partners' interest 795,272 1,183,515
General partners' deficit (25,175) (25,294)
------------------- -----------------
Total partners' equity 770,097 1,158,221
------------------- -----------------
Total liabilities and partners' equity $9,975,134 $10,316,798
=================== =================
</TABLE>
The accompanying notes are an integral part of
the financial statements.
-3-
<PAGE>
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
CONDENSED STATEMENT OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three months Nine months Three months Nine months
ended ended ended ended
September 30, September 30, September 30, September 30,
1995 1995 1994 1994
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
REVENUE:
Rental income $501,432 $1,465,205 $472,148 $1,385,427
Interest income 3,804 10,344 3,134 10,464
Other operating income 28,645 75,822 34,165 86,876
--------------- --------------- --------------- ---------------
533,881 1,551,371 509,447 1,482,767
--------------- --------------- --------------- ---------------
OPERATING EXPENSES:
Fees and expenses to affiliates 63,517 191,779 60,986 182,998
Property taxes and insurance 34,079 102,238 34,600 101,618
Utilities 29,271 83,544 27,221 78,458
Repairs and maintenance 41,871 120,762 40,308 116,063
Advertising 12,386 39,531 20,010 50,780
Depreciation and amortization 114,453 292,154 117,321 351,963
Other 3,030 8,443 2,975 12,132
--------------- --------------- --------------- ---------------
298,607 838,451 303,421 894,012
INTEREST EXPENSE 215,102 646,645 216,839 651,737
NONOPERATING EXPENSES 12,427 54,399 12,404 42,696
--------------- --------------- --------------- ---------------
Total expenses 526,136 1,539,495 532,664 1,588,445
--------------- --------------- --------------- ---------------
NET INCOME (LOSS) $7,745 $11,876 ($23,217) ($105,678)
=============== =============== =============== ===============
NET INCOME (LOSS) ALLOCATED TO GENERAL PARTNERS $77 $119 ($232) ($1,057)
=============== =============== =============== ===============
NET INCOME (LOSS) ALLOCATED TO LIMITED PARTNERS $7,668 $11,757 ($22,985) ($104,621)
=============== =============== =============== ===============
NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT, based
on number of units outstanding (61,928) $0.12 $0.19 ($0.37) ($1.69)
=============== =============== =============== ===============
</TABLE>
The accompanying notes are an integral
part of the financial statements.
-4-
<PAGE>
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
STATEMENT OF PARTNERS' EQUITY
(DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
Limited General
Partners Partners Total
---------------- ---------------- --------------
<S> <C> <C> <C>
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
---------------- ---------------- --------------
Balance, September 30, 1995 $795,272 ($25,175) $770,097
================ ================ ==============
Limited General
Partners Partners Total
---------------- ---------------- --------------
Balance, January 1, 1994 $1,436,600 ($23,647) $1,412,953
Distribution to partners (90,000) 0 ($90,000)
Net loss (104,621) (1,057) (105,678)
---------------- ---------------- --------------
Balance, September 30, 1994 $1,241,979 ($24,704) $1,217,275
================ ================ ==============
</TABLE>
The accompanying notes are an integral part of
the financial statements.
-5-
<PAGE>
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION
Nine months Nine months
ended ended
September 30, September 30,
1995 1994
------------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $11,876 ($105,678)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities-
Depreciation and amortization 292,154 351,963
Change in assets and liabilities:
Increase in accrued and other liabilities 91,678 6,112
Increase in escrows and other assets, net (118,025) (108,208)
------------------- -----------------
Net cash provided by operating activities 277,683 144,189
------------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to rental properties (40,666) (25,341)
------------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of mortgage loans (56,408) (56,795)
Distribution to partners (400,000) (90,000)
------------------- -----------------
Net cash used in financing activities (456,408) (146,795)
------------------- -----------------
NET DECREASE IN CASH AND CASH INVESTMENTS (219,391) (27,947)
CASH AND CASH INVESTMENTS, beginning of year 878,968 855,953
------------------- -----------------
CASH AND CASH INVESTMENTS, September 30 $659,577 $828,006
=================== =================
</TABLE>
The accompanying notes are an integral part of
the financial statements.
-6-
<PAGE>
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, 1995, results of operations for the three months and nine
months ended September 30, 1995 and 1994 and cash flow for the nine months ended
September 30, 1995 and 1994.
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.
7
<PAGE>
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, 1995 as follows:
Management fee of 5% of gross revenues $76,338
Reimbursed maintenance salaries and benefits 52,432
Reimbursed property manager salaries and benefits 63,009
$191,779
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
$9,334 for the nine months ended September 30, 1995, 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
<PAGE>
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, 1995, partners' equity was $770,097 or 8% of total assets
and cash and cash reserves amounted to $659,577. The Partnership had accrued
liabilities of $119,952 that consisted of 1995 property taxes of $89,658,
management fees due to an affiliate of $8,676, trade accounts payable of
$21,571, and resident prepaid rent of $47.
Net cash provided by operations totaled $277,683 for the nine months ended
September 30, 1995. This is compared to net cash provided by operations of
$144,189 for the corresponding period in 1994. The Partnership had three 9.5%
mortgage loans in the amount of $9,044,045 outstanding at September 30, 1995.
Principal payments of $56,408 were made during the nine month period ended
September 30, 1995 on the amortizing mortgage loans.
The 1995 operating plan and budget projects a net cash flow from
partnership activities (exclusive of changes in assets and liabilities and
distribution to partners) of $16,000 at Arrowood Crossing, $127,000 at The
Chase, and $23,000 at Sabal Point II. The budget assumes that the Partnership
will achieve occupancy rates equivalent to 96% at Arrowood Crossing, 97% at The
Chase and 95% at Sabal Point II. For the nine months ended September 30, 1995,
actual combined average economic occupancy was 96% and actual net cash flow from
partnership activities (exclusive of changes in assets and liabilities and
distribution to partners) was $206,956. Rents have been increased 5% over rates
charged in 1994 to offset any normal increase in operating expenses. Capital
expenditures of $23,799, $15,025 and $25,170 are budgeted for Arrowood Crossing,
The Chase and Sabal Point II, respectively, and include mainly selected carpet
and vinyl replacements. As of September 30, 1995, actual capital expenditures
and additions to rental properties have totaled $36,060, $13,415 and $14,411,
respectively. Arrowood Crossing had nonbudgeted capital expenditure expense of
$11,000 related to asphalt repairs. 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 1994 operational net cash flow were distributed to limited partners
in January 1995. The next available distribution to partners is scheduled for
the first quarter of 1996 with the amount being dependent upon 1995 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, 1995 and 1994.
Results of operations for the three months ended September 30, 1995 reflect
an average economic occupancy of 96% compared to 96% for the corresponding
period in 1994. A third quarter comparison of 1995 and 1994 reflects higher
rental income of $29,284 during 1995 due to rents being increased 5% to 8% over
rates charged in 1994. Other operating income was $5,520 less than recognized in
1994 due mainly to leasing fewer corporate apartments. Overall, total income for
the third quarter ended September 30, 1995 was $24,434 higher than the
corresponding period in 1994.
Operating expenses were $298,607 for the three months ended September 30,
1995, compared to $303,421 for the corresponding period in 1994 which reflects a
variance of $4,814. 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 $2,531. Utilities were higher by $2,050 due to water
usage. Repairs and maintenance was higher by $1,563 due to turnkey costs
(expenses associated with preparing rental units for occupation). Since the
properties are leasing fewer corporate apartments in 1995 compared
9
<PAGE>
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
to 1994, the costs associated with maintaining these units were reduced by
$7,624 being reflected in the category of advertising.
After interest expense of $215,102 and nonoperating expenses (partnership
expenses and nonrecurring replacement costs) of $12,427, partnership operations
recognized a net income of $7,745 for the three months ended September 30, 1995.
This is compared to a net loss of $23,217 for the corresponding period in 1994.
Overall, the Partnership recognized a net increase in total revenues of
$68,604 (due to rents being increased 5% to 8% over rates charged in 1994) and a
net decrease in operating expenses of $55,561 (due primarily to depreciation and
amortization) for the nine months ended September 30, 1995 compared to the
corresponding period in 1994. Fees and expenses to affiliates were $8,781 higher
in 1995 which consisted of a management fee of 5% of gross revenues and the
reimbursement of complex employee salaries and benefits. Utilities were higher
by $5,086 due to rate increases by the utility departments from 1994 and usage
by the residents. Repairs and maintenance was $4,699 higher due to normal lawn
care costs and turnkey costs in 1995. Nonoperating expenses (which include
partnership expense and nonrecurring replacement costs) was $11,703 higher in
1995 due mainly to asphalt repairs and plumbing repairs associated with a water
pipe breakage at Arrowood Crossing. After interest expense of $646,645 and
nonoperating expenses of $54,399, the Partnership had a net income of $11,876
for the nine months ended September 30, 1995. This is compared to a net loss of
$105,678 for the corresponding period in 1994.
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.
10
<PAGE>
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
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
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
<PAGE>
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
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 13, 1995
By: Robert J. Brietz, Executive Vice President
Date: November 13, 1995
12
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Article 5 for 3rd quarter 10-Q for Bass Income Plus Fund.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 659,577
<SECURITIES> 0
<RECEIVABLES> 4,563
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 204,432
<PP&E> 11,901,763
<DEPRECIATION> 2,863,116
<TOTAL-ASSETS> 9,975,134
<CURRENT-LIABILITIES> 160,992
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 770,097
<TOTAL-LIABILITY-AND-EQUITY> 9,975,134
<SALES> 1,465,205
<TOTAL-REVENUES> 1,551,371
<CGS> 0
<TOTAL-COSTS> 546,297
<OTHER-EXPENSES> 346,553
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 646,645
<INCOME-PRETAX> 11,876
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,876
<EPS-PRIMARY> .19
<EPS-DILUTED> .19
</TABLE>
