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, 1997
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
_______ ________
<PAGE>
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
INDEX
_______
PAGE
NUMBER
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Condensed Balance Sheet
as of September 30, 1997
(Unaudited) 3
Condensed Statement of Income
Three months and nine months ended
September 30, 1997 and 1996
(Unaudited) 4
Statement of Partners' Equity (Deficit) 5
(Unaudited)
Condensed Statement of Cash Flows
Nine months ended September 30, 1997 and 1996
(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
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<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------------ -----------------
ASSETS (Unaudited)
_______
<S> <C> <C>
RENTAL PROPERTIES, at cost:
Land $ 1,206,000 $ 1,206,000
Buildings 9,753,904 9,729,194
Furnishings and fixtures 948,012 943,528
Accumulated depreciation (3,617,256) (3,337,023)
----------- -----------
8,290,660 8,541,699
CASH AND CASH INVESTMENTS 582,267 654,810
RESTRICTED ESCROW DEPOSITS 42,876 38,280
DEFERRED COSTS AND OTHER ASSETS, net 222,208 142,862
----------- -----------
Total assets $ 9,138,011 $ 9,377,651
=========== ===========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
___________________________________________
MORTGAGE LOANS PAYABLE $ 8,872,500 $ 8,940,661
SECURITY DEPOSITS 28,920 32,395
ACCRUED LIABILITIES 121,591 26,052
----------- -----------
Total liabilities 9,023,011 8,999,108
----------- -----------
PARTNERS' EQUITY (DEFICIT):
Limited partners' interest 139,726 403,634
General partners' deficit (24,726) (25,091)
----------- -----------
Total partners' equity 115,000 378,543
----------- -----------
Total liabilities and partners' equity $ 9,138,011 $ 9,377,651
=========== ===========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
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<PAGE>
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
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CONDENSED STATEMENT OF INCOME
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(Unaudited)
<TABLE>
<CAPTION>
Three months Nine months Three months Nine months
ended ended ended ended
September 30, September 30, September 30, September 30,
1997 1997 1996 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
REVENUE:
Rental income $ 530,348 $ 1,583,217 $ 527,360 $ 1,553,357
Interest income 9,741 28,820 8,274 23,825
Other operating income 24,535 68,461 21,451 70,725
----------- ----------- ----------- -----------
564,624 1,680,498 557,085 1,647,907
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Fees and expenses to affiliates 68,823 217,587 67,863 204,511
Property taxes and insurance 36,114 108,342 34,737 104,211
Utilities 33,316 91,538 30,145 89,827
Repairs and maintenance 40,132 110,907 42,831 118,380
Advertising 16,304 35,679 11,426 31,505
Depreciation and amortization 97,602 292,801 109,188 331,044
Other (1,288) 4,713 (2,159) 15,296
----------- ----------- ----------- -----------
291,003 861,567 294,031 894,774
INTEREST EXPENSE 211,091 634,892 213,191 641,046
NONOPERATING EXPENSES 43,556 147,582 53,893 92,602
----------- ----------- ----------- -----------
Total expenses 545,650 1,644,041 561,115 1,628,422
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 18,974 $ 36,457 ($ 4,030) $ 19,485
=========== =========== =========== ===========
NET INCOME (LOSS) ALLOCATED TO GENERAL PARTNERS $ 190 $ 365 ($ 40) $ 195
=========== =========== =========== ===========
NET INCOME (LOSS) ALLOCATED TO LIMITED PARTNERS $ 18,784 $ 36,092 ($ 3,990) $ 19,290
=========== =========== =========== ===========
NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT,
based on number of units outstanding (61,928) $ 0.30 $ 0.58 ($ 0.06) $ 0.31
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
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<PAGE>
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
---------------------------------------------------
STATEMENT OF PARTNERS' EQUITY
(DEFICIT)
---------------------------------------------------
(Unaudited)
Limited General
Partners Partners Total
----------- ----------- ----------
Balance, January 1, 1997 $ 403,634 ($ 25,091) $ 378,543
Distribution to partners (300,000) 0 (300,000)
Net income 36,092 365 36,457
--------- --------- ---------
Balance, September 30, 1997 $ 139,726 ($ 24,726) $ 115,000
========= ========= =========
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 19,290 195 19,485
--------- --------- ---------
Balance, September 30, 1996 $ 377,874 ($ 25,351) $ 352,523
========= ========= =========
The accompanying notes are an integral The accompanying notes are an integral
part of the financial statements. part of the financial statements.
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<PAGE>
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
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CONDENSED STATEMENT OF CASH FLOWS
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(Unaudited)
Nine months Nine months
ended ended
September 30, September 30,
1997 1996
------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 36,457 $ 19,485
Adjustments to reconcile net income to net
cash provided by (used in) operating activities-
Depreciation and amortization 292,801 331,044
Change in assets and liabilities:
Increase in accrued and other liabilities 95,539 97,703
Increase in escrows and other assets, net (99,985) (106,809)
--------- ---------
Net cash provided by operating activities 324,812 341,423
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to rental properties (29,194) (38,575)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distribution to partners (300,000) (400,000)
Repayment of mortgage loans (68,161) (62,006)
--------- ---------
Net cash used in financing activities (368,161) (462,006)
--------- ---------
NET DECREASE IN CASH AND CASH INVESTMENTS (72,543) (159,158)
CASH AND CASH INVESTMENTS, beginning of year 654,810 727,160
--------- ---------
CASH AND CASH INVESTMENTS, September 30 $ 582,267 $ 568,002
========= =========
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 September 30, 1997, results of operations for the three months and nine
months ended September 30, 1997 and 1996, and cash flow for the nine months
ended September 30, 1997 and 1996.
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>
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, 1997 as follows:
Management fee of 5% of gross revenues $ 81,428
Reimbursed maintenance salaries and benefits 66,894
Reimbursed property manager salaries and benefits 69,265
---------
$217,587
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
$10,224 for the nine months ended September 30, 1997 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>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
At September 30, 1997, partners' equity was $115,000 or 1% of total assets
and cash and cash reserves amounted to $582,267. The Partnership had accrued
liabilities of $121,591 that consisted of 1997 property taxes of $94,068,
management fees due to an affiliate of $8,967, trade accounts payable of $17,945
and resident prepaid rent of $611.
Net cash provided by operations totaled $324,812 for the nine months ended
September 30, 1997. This is compared to net cash provided by operations of
$341,423 for the corresponding period in 1996. The Partnership had three 9.5%
mortgage loans in the amount of $8,872,500 outstanding at September 30, 1997.
Principal payments of $68,161 were made during the nine month period ended
September 30, 1997 on the amortizing mortgage loans.
The 1997 operating plan and budget projects a net cash flow from
partnership activities (exclusive of changes in assets and liabilities and
distribution to partners) of $42,000 at Arrowood Crossing, $220,000 at The
Chase, and $135,000 at Sabal Point II. The budget assumes that the Partnership
will achieve occupancy rates equivalent to 95% at Arrowood Crossing, 98% at The
Chase and 95% at Sabal Point II. For the nine months ended September 30, 1997,
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 $231,903. Rents have been increased 3% over rates
charged in 1996 to offset any normal increase in operating expenses. Capital
expenditures of $74,000, $30,000 and $32,000 are budgeted for Arrowood Crossing,
The Chase and Sabal Point II, respectively, and include mainly selected carpet
and vinyl replacements and exterior painting of Arrowood Crossing. As of
September 30, 1997, actual combined nonrecurring replacement expenses and
additions to rental properties have totaled $146,139. 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, build cash
reserves and provide distributions to partners. Funds totaling $300,000 provided
by cash reserves and 1996 operational net cash flow were distributed to limited
partners in May 1997. The next available distribution to partners is scheduled
for the first quarter of 1998 and the amount is dependent upon 1997 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, 1997 and 1996.
Results of operations for the three months ended September 30, 1997 reflect
an average economic occupancy of 95% compared to 99% for the corresponding
period in 1996. A third quarter comparison of 1997 and 1996 reflects higher
rental income of $2,988 during 1997 due to rents being increased 3% over rates
charged in 1996. Overall, total income for the third quarter ended September 30,
1997 was $7,539 higher than the corresponding period in 1996.
Operating expenses were $291,003 for the three months ended September 30,
1997, compared to $294,031 for the corresponding period in 1996 which reflects a
variance of $3,028. 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 $960. This increase was due to the cost of
additional maintenance personnel. Property taxes and insurance were higher by
$1,377 due to increased rates. Utilities were higher by $3,171 due to increased
utility rates and resident usage. Advertising was higher by $4,878 due to
concessions offered to new residents and marketing efforts to increase the
average occupancy. Other operating expenses of ($1,288) reflected collection of
prior period income that had been written off as bad debt
9
<PAGE>
After interest expense of $211,091 and nonoperating expenses (partnership
expenses and nonrecurring replacement costs) of $43,556, partnership operations
recognized a net income of $18,974 for the three months ended September 30,
1997. This is compared to a net loss of $4,030 for the corresponding period in
1996.
Overall the Partnership recognized a net increase in total revenues of
$32,591 (due to rents being increased 3% over rates charged in 1996) and a net
decrease in total operating expenses of $33,207 (due mainly to a 1997 adjustment
in deprecation and amortization) for the nine months ended September 30, 1997
compared to the corresponding period in 1996. After interest expense of $634,892
and nonoperating expenses of $147,582 (partnership expenses and nonrecurring
replacement costs) the Partnership had a net income of $36,457 for the nine
months ended September 30, 1997. This is compared to a net income of $19,485 for
the corresponding period in 1996.
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>
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>
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: October 31, 1997
-------------------
By: Robert J. Brietz, Executive Vice President
------------------------------------------
Date: October 31, 1997
----------------
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-END> Sep-30-1997
<CASH> 582,267
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 42,876
<PP&E> 11,907,916
<DEPRECIATION> 3,617,256
<TOTAL-ASSETS> 9,138,011
<CURRENT-LIABILITIES> 150,511
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 115,000
<TOTAL-LIABILITY-AND-EQUITY> 9,138,011
<SALES> 1,583,217
<TOTAL-REVENUES> 1,680,498
<CGS> 0
<TOTAL-COSTS> 861,567
<OTHER-EXPENSES> 147,582
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 634,892
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,457
<EPS-PRIMARY> .58
<EPS-DILUTED> .58
</TABLE>
