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....................................March 31, 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
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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<TABLE>
<CAPTION>
PAGE
NUMBER
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
<S> <C>
Condensed Balance Sheet
as of March 31, 1996
(Unaudited) 3
Condensed Statement of Income
Three months ended
March 31, 1996 and 1995
(Unaudited) 4
Statement of Partners' Equity (Deficit) 5
(Unaudited)
Condensed Statement of Cash Flows
Three months ended March 31, 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 11
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BASS INCOME PLUS FUND LIMITED PARTNERSHIP
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CONDENSED BALANCE SHEET
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<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
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ASSETS (Unaudited)
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<S> <C> <C>
RENTAL PROPERTIES, at cost:
Land $1,206,000 $1,206,000
Buildings 9,730,131 9,729,194
Furnishings and fixtures 952,820 942,021
Accumulated depreciation (3,080,618) (2,972,138)
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8,808,333 8,905,077
CASH AND CASH INVESTMENTS 819,872 727,160
RESTRICTED ESCROW DEPOSITS 53,259 52,897
DEFERRED COSTS AND OTHER ASSETS, net 150,344 137,277
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Total assets $9,831,808 $9,822,411
=================== =================
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
-----------------------------------------------
MORTGAGE LOANS PAYABLE $9,004,152 $9,024,334
SECURITY DEPOSITS 38,530 39,010
ACCRUED LIABILITIES 46,683 26,029
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Total liabilities 9,089,365 9,089,373
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PARTNERS' EQUITY (DEFICIT):
Limited partners' interest 767,895 758,584
General partners' deficit (25,452) (25,546)
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Total partners' equity 742,443 733,038
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Total liabilities and partners' equity $9,831,808 $9,822,411
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</TABLE>
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)
<TABLE>
<CAPTION>
Three months Three months
ended ended
March 31, March 31,
1996 1995
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<S> <C> <C>
REVENUE:
Rental income $510,051 $483,877
Interest income 6,547 3,292
Other operating income 25,985 27,242
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542,583 514,411
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OPERATING EXPENSES:
Fees and expenses to affiliates 69,696 66,084
Property taxes and insurance 34,737 34,079
Utilities 31,868 27,818
Repairs and maintenance 35,963 33,332
Advertising 8,766 13,999
Depreciation and amortization 112,668 117,321
Other 10,137 1,994
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303,835 294,627
INTEREST EXPENSE 214,169 215,991
NONOPERATING EXPENSES 15,174 11,774
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Total expenses 533,178 522,392
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NET INCOME (LOSS) $9,405 ($7,981)
================ ===============
NET INCOME (LOSS) ALLOCATED TO GENERAL PARTNERS $94 ($80)
================ ===============
NET INCOME (LOSS) ALLOCATED TO LIMITED PARTNERS $9,311 ($7,901)
================ ===============
NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT, based
on number of units outstanding (61,928) $0.15 ($0.13)
================ ===============
</TABLE>
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)
<TABLE>
<CAPTION>
Limited General
Partners Partners Total
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<S> <C> <C> <C> <C>
Balance, January 1, 1996 $758,584 ($25,546) $733,038
Net income 9,311 94 9,405
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Balance, March 31, 1996 $767,895 ($25,452) $742,443
================ ================ ==============
</TABLE>
<TABLE>
<CAPTION>
Limited General
Partners Partners Total
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<S> <C> <C> <C> <C>
Balance, January 1, 1995 $1,183,515 ($25,294) $1,158,221
Distribution to partners (400,000) 0 ($400,000)
Net loss (7,901) (80) (7,981)
---------------- ---------------- --------------
Balance, March 31, 1995 $775,614 ($25,374) $750,240
================ ================ ==============
</TABLE>
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 CASH FLOWS
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(Unaudited)
<TABLE>
<CAPTION>
Three months Three months
ended ended
March 31, March 31,
1996 1995
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $9,405 ($7,981)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities-
Depreciation and amortization 112,668 117,321
Change in assets and liabilities:
Increase in accrued and other liabilities 20,654 17,598
Increase in escrows and other assets, net (18,097) (53,681)
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Net cash provided by operating activities 124,630 73,257
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CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to rental properties (11,736) (3,806)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of mortgage loans (20,182) (18,360)
Distribution to partners 0 (400,000)
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Net cash used in financing activities (20,182) (418,360)
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NET INCREASE AND DECREASE IN CASH AND
CASH INVESTMENTS 92,712 (348,909)
CASH AND CASH INVESTMENTS, beginning of year 727,160 878,968
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CASH AND CASH INVESTMENTS, March 31 $819,872 $530,059
=================== =================
</TABLE>
The accompanying notes are an integral
part of the financial statements.
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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 March 31, 1996, results of operations for the three months ended March 31,
1996 and 1995 and cash flow for the three months ended March 31, 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 three-month period
ending March 31, 1996 as follows:
Management fee of 5% of gross revenues $26,848
Reimbursed maintenance salaries and benefits 17,918
Reimbursed property manager salaries and benefits 24,930
$69,696
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
$3,408 for the three months ended March 31, 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
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BASS INCOME PLUS FUND LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
At March 31, 1996, partners' equity was $742,443 or 7% of total assets and
cash and cash reserves amounted to $819,872. The Partnership had accrued
liabilities of $46,683 that consisted of 1996 property taxes of $30,459,
management fees due to an affiliate of $9,175, trade accounts payable of $6,208
and resident prepaid rent of $841.
Net cash provided by operations totaled $124,630 for the three months ended
March 31, 1996. This is compared to net cash provided by operations of $73,257
for the corresponding period in 1995. The Partnership had three 9.5% mortgage
loans in the amount of $9,004,152 outstanding at March 31, 1996. Principal
payments of $20,182 were made during the three month period ended March 31, 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 three months ended March 31, 1996,
actual combined average economic occupancy was 98% and actual net cash flow from
partnership activities (exclusive of changes in assets and liabilities and
distribution to partners) was $90,155. 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 March 31, 1996, actual capital expenditures and
additions to rental properties have totaled $7,619, $8,324 and $4,635
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 ended March 31, 1996
and 1995.
Results of operations for the three months ended March 31, 1996 reflect an
average economic occupancy of 98% compared to 97% for the corresponding period
in 1995. A first quarter comparison of 1996 and 1995 reflects higher rental
income of $26,174 during 1996 due to rents being increased 5% over rates charged
in 1995. Other operating income was $1,257 less than recognized in 1995 due
mainly to leasing fewer corporate apartments. Overall, total income for the
first quarter ended March 31, 1996 was $28,172 higher than the corresponding
period in 1995.
Operating expenses were $303,835 for the three months ended March 31, 1996,
compared to $294,627 for the corresponding period in 1995 which reflects a
variance of $9,208. 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 $3,612. Utilities were higher by $4,050 due to
resident usage and the prepayment of April 1996 electric bills. Repairs and
maintenance was higher by $2,631 due to turnkey costs (expenses associated with
preparing rental units for occupation) and grounds upkeep. Since the properties
are leasing fewer corporate apartments in 1996 compared to 1995, the costs
associated with
9
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BASS INCOME PLUS FUND LIMITED PARTNERSHIP
maintaining these units were reduced by $5,233 being reflected in the category
of advertising. Other operating expenses increased $8,143 due primarily to the
write-off of uncollected rents and other fees.
After interest expense of $214,169 and nonoperating expenses (partnership
expenses and nonrecurring replacement costs) of $15,174, partnership operations
recognized a net income of $9,405 for the three months ended March 31, 1996.
This is compared to a net loss of $7,981 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 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.
10
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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: May 10, 1996
By: Robert J. Brietz, Executive Vice President
Date: May 10, 1996
11
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
ARTICLE 5 for 1st Quarter 10-Q for BASS INCOME PLUS FUND.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-Mos
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> Mar-31-1996
<CASH> 819,872
<SECURITIES> 0
<RECEIVABLES> 578
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 132,089
<PP&E> 11,888,951
<DEPRECIATION> 3,080,618
<TOTAL-ASSETS> 9,831,808
<CURRENT-LIABILITIES> 85,213
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 742,443
<TOTAL-LIABILITY-AND-EQUITY> 9,831,808
<SALES> 510,051
<TOTAL-REVENUES> 542,583
<CGS> 0
<TOTAL-COSTS> 191,167
<OTHER-EXPENSES> 127,842
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 214,169
<INCOME-PRETAX> 9,405
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,405
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
</TABLE>
