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..................................JUNE 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
- --------------------------------------------------------------------------------
(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
------------
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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<PAGE>
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 JUNE 30, 1996
(UNAUDITED) 3
CONDENSED STATEMENT OF INCOME
THREE MONTHS AND SIX MONTHS ENDED
JUNE 30, 1996 AND 1995
(UNAUDITED) 4
STATEMENT OF PARTNERS' EQUITY (DEFICIT) 5
(UNAUDITED)
CONDENSED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 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
-2-
<PAGE>
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
- ---------------------------------------------------------------
CONDENSED BALANCE SHEET
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------------- -----------------
ASSETS (UNAUDITED)
-------
<S> <C> <C>
RENTAL PROPERTIES, AT COST:
LAND $1,206,000 $1,206,000
BUILDINGS 9,729,194 9,729,194
FURNISHINGS AND FIXTURES 968,661 942,021
ACCUMULATED DEPRECIATION (3,185,618) (2,972,138)
------------------- -----------------
8,718,237 8,905,077
CASH AND CASH INVESTMENTS 506,316 727,160
RESTRICTED ESCROW DEPOSITS 42,363 52,897
DEFERRED COSTS AND OTHER ASSETS, NET 190,321 137,277
------------------- -----------------
TOTAL ASSETS $9,457,237 $9,822,411
=================== =================
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
- -----------------------------------------------
MORTGAGE LOANS PAYABLE $8,983,487 $9,024,334
SECURITY DEPOSITS 36,628 39,010
ACCRUED LIABILITIES 80,569 26,029
------------------- -----------------
TOTAL LIABILITIES 9,100,684 9,089,373
------------------- -----------------
PARTNERS' EQUITY (DEFICIT):
LIMITED PARTNERS' INTEREST 381,864 758,584
GENERAL PARTNERS' DEFICIT (25,311) (25,546)
------------------- -----------------
TOTAL PARTNERS' EQUITY 356,553 733,038
------------------- -----------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $9,457,237 $9,822,411
=================== =================
</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 SIX MONTHS THREE MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1996 1995 1995
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
REVENUE:
RENTAL INCOME $515,946 $1,025,997 $479,896 $963,773
INTEREST INCOME 9,004 15,551 3,248 6,540
OTHER OPERATING INCOME 23,289 49,274 19,935 47,177
--------------- --------------- --------------- ---------------
548,239 1,090,822 503,079 1,017,490
--------------- --------------- --------------- ---------------
OPERATING EXPENSES:
FEES AND EXPENSES TO AFFILIATES 66,952 136,648 62,178 128,262
PROPERTY TAXES AND INSURANCE 34,737 69,474 34,080 68,159
UTILITIES 27,814 59,682 26,455 54,273
REPAIRS AND MAINTENANCE 39,586 75,549 45,559 78,891
ADVERTISING 11,313 20,079 13,146 27,145
DEPRECIATION AND AMORTIZATION 109,188 221,856 60,380 177,701
OTHER 7,318 17,455 3,419 5,413
--------------- --------------- --------------- ---------------
296,908 600,743 245,217 539,844
INTEREST EXPENSE 213,686 427,855 215,552 431,543
NONOPERATING EXPENSES 23,535 38,709 30,198 41,972
--------------- --------------- --------------- ---------------
TOTAL EXPENSES 534,129 1,067,307 490,967 1,013,359
--------------- --------------- --------------- ---------------
NET INCOME $14,110 $23,515 $12,112 $4,131
=============== =============== =============== ===============
NET INCOME ALLOCATED TO GENERAL PARTNERS $141 $235 $121 $41
=============== =============== =============== ===============
NET INCOME ALLOCATED TO LIMITED PARTNERS $13,969 $23,280 $11,991 $4,090
=============== =============== =============== ===============
NET INCOME PER LIMITED PARTNERSHIP UNIT, BASED
ON NUMBER OF UNITS OUTSTANDING (61,928) $0.23 $0.38 $0.19 $0.07
=============== =============== =============== ===============
</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)
LIMITED GENERAL
PARTNERS PARTNERS TOTAL
---------------- ---------------- --------------
BALANCE, JANUARY 1, 1996 $758,584 ($25,546) $733,038
DISTRIBUTION TO PARTNERS (400,000) 0 (400,000)
NET INCOME 23,280 235 23,515
---------------- ---------------- --------------
BALANCE, JUNE 30, 1996 $381,864 ($25,311) $356,553
================ ================ ==============
LIMITED GENERAL
PARTNERS PARTNERS TOTAL
---------------- ---------------- --------------
BALANCE, JANUARY 1, 1995 $1,183,515 ($25,294) $1,158,221
DISTRIBUTION TO PARTNERS (400,000) 0 ($400,000)
NET INCOME 4,090 41 4,131
---------------- ---------------- --------------
BALANCE, JUNE 30, 1995 $787,605 ($25,253) $762,352
================ ================ ==============
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>
SIX MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
1996 1995
------------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $23,515 $4,131
ADJUSTMENTS TO RECONCILE NET LOSS TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES-
DEPRECIATION AND AMORTIZATION 221,856 177,701
CHANGE IN ASSETS AND LIABILITIES:
INCREASE IN ACCRUED AND OTHER LIABILITIES 54,540 51,391
INCREASE IN ESCROWS AND OTHER ASSETS, NET (53,268) (77,274)
------------------- -----------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 246,643 155,949
------------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
ADDITIONS TO RENTAL PROPERTIES (26,640) (18,228)
------------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
REPAYMENT OF MORTGAGE LOANS (40,847) (37,159)
DISTRIBUTION TO PARTNERS (400,000) (400,000)
------------------- -----------------
NET CASH USED IN FINANCING ACTIVITIES (440,847) (437,159)
------------------- -----------------
NET DECREASE IN CASH AND CASH INVESTMENTS (220,844) (299,438)
CASH AND CASH INVESTMENTS, BEGINNING OF YEAR 727,160 878,968
------------------- -----------------
CASH AND CASH INVESTMENTS, JUNE 30 $506,316 $579,530
=================== =================
</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 June 30, 1996, results of operations for the three months and six months
ended June 30, 1996 and 1995 and cash flow for the six months ended June 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.
7
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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 six-month period ending
June 30, 1996 as follows:
Management fee of 5% of gross revenues $53,470
Reimbursed maintenance salaries and benefits 38,534
Reimbursed property manager salaries and benefits 44,644
$136,648
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
$6,816 for the six months ended June 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
<PAGE>
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1996, partners' equity was $356,553 or 3% of total assets and
cash and cash reserves amounted to $506,316. The Partnership had accrued
liabilities of $80,569 that consisted of 1996 property taxes of $60,918,
management fees due to an affiliate of $8,827, trade accounts payable of $7,947
and resident prepaid rent of $2,877.
Net cash provided by operations totaled $246,643 for the six months ended
June 30, 1996. This is compared to net cash provided by operations of $155,949
for the corresponding period in 1995. The Partnership had three 9.5% mortgage
loans in the amount of $8,983,487 outstanding at June 30, 1996. Principal
payments of $40,847 were made during the six month period ended June 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 six months ended June 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 $177,884. 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 June 30, 1996, actual capital expenditures and
additions to rental properties have totaled $16,604, $10,362 and $15,684
respectively. 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 six months ended
June 30, 1996 and 1995.
Results of operations for the three months ended June 30, 1996 reflect an
average economic occupancy of 98% compared to 96% for the corresponding period
in 1995. A second quarter comparison of 1996 and 1995 reflects higher rental
income of $36,050 during 1996 due to rents being increased 5% over rates charged
in 1995. Other operating income was higher by $3,354. Overall, total income for
the second quarter ended June 30, 1996 was $45,160 higher than the corresponding
period in 1995.
Operating expenses were $296,908 for the three months ended June 30, 1996,
compared to $245,217 for the corresponding period in 1995 which reflects a
variance of $51,691. 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 $4,774. Utilities were higher by $1,359 due
to resident usage. Depreciation and amortization were higher by $48,808. An
adjustment to depreciation was recorded in the second quarter of 1995. Other
operating expenses were higher by $3,899 due to the write-off of uncollected
rental income.
9
<PAGE>
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
After interest expense of $213,686 and nonoperating expenses (partnership
expenses and nonrecurring replacement costs) of $23,535, partnership operations
recognized a net income of $14,110 for the three months ended June 30, 1996.
This is compared to a net income of $12,112 for the corresponding period in
1995.
Overall the Partnership recognized a net increase in total revenues of
$73,332 (due to rents being increased 5% over rates charged in 1995) and a net
increase in total operating expenses of $60,899 (due mainly to a 1995 adjustment
in depreciation and amortization) for the six months ended June 30, 1996
compared to the corresponding period in 1995. After interest expense of $427,855
and other operating expenses of $38,709 (partnership expenses and nonrecurring
replacement costs) the Partnership had a net income of $23,515 for the six
months ended June 30, 1996. This is compared to a net income of $4,131 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
<PAGE>
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
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: August 1, 1996
By: Robert J. Brietz, Executive Vice President
Date: August 1, 1996
12
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Form 10-Q for Bass Income Plus Fund for the period ending June 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 506,316
<SECURITIES> 0
<RECEIVABLES> 5,176
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 42,363
<PP&E> 11,903,855
<DEPRECIATION> 3,185,618
<TOTAL-ASSETS> 9,457,237
<CURRENT-LIABILITIES> 117,197
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 356,553
<TOTAL-LIABILITY-AND-EQUITY> 9,457,237
<SALES> 1,025,997
<TOTAL-REVENUES> 1,090,822
<CGS> 0
<TOTAL-COSTS> 378,887
<OTHER-EXPENSES> 260,565
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 427,855
<INCOME-PRETAX> 23,515
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23,515
<EPS-PRIMARY> .38
<EPS-DILUTED> 0
</TABLE>
