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, 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
- --------------------------------------------------------------------------------
(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
INDEX
-------
PAGE
NUMBER
PART I. FINANCIAL INFORMATION:
ITEM 1. FINANCIAL STATEMENTS
CONDENSED BALANCE SHEET
AS OF JUNE 30, 1997
(UNAUDITED) 3
CONDENSED STATEMENT OF INCOME
THREE MONTHS AND SIX MONTHS ENDED
JUNE 30, 1997 AND 1996
(UNAUDITED) 4
STATEMENT OF PARTNERS' EQUITY (DEFICIT) 5
(UNAUDITED)
CONDENSED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 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 11
-2-
<PAGE>
BASS INCOME PLUS FUND LIMITED PARTNERSHIP
---------------------------------------------------------------
CONDENSED BALANCE SHEET
---------------------------------------------------------------
JUNE 30, DECEMBER 31,
1997 1996
----------------- -----------------
ASSETS (UNAUDITED)
-------
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 (3,523,845) (3,337,023)
----------------- -----------------
8,384,071 8,541,699
CASH AND CASH INVESTMENTS 499,915 654,810
RESTRICTED ESCROW DEPOSITS 38,611 38,280
DEFERRED COSTS AND OTHER ASSETS, NET 194,954 142,862
----------------- -----------------
TOTAL ASSETS $9,117,551 $9,377,651
================= =================
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
-----------------------------------------------
MORTGAGE LOANS PAYABLE $8,895,760 $8,940,661
SECURITY DEPOSITS 33,140 32,395
ACCRUED LIABILITIES 92,625 26,052
----------------- -----------------
TOTAL LIABILITIES 9,021,525 8,999,108
----------------- -----------------
PARTNERS' EQUITY (DEFICIT):
LIMITED PARTNERS' INTEREST 120,942 403,634
GENERAL PARTNERS' DEFICIT (24,916) (25,091)
----------------- -----------------
TOTAL PARTNERS' EQUITY 96,026 378,543
----------------- -----------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $9,117,551 $9,377,651
================= =================
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,
1997 1997 1996 1996
-------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
REVENUE:
RENTAL INCOME $525,319 $1,052,869 $515,946 $1,025,997
INTEREST INCOME 9,623 19,079 9,004 15,551
OTHER OPERATING INCOME 19,702 43,926 23,289 49,274
-------------- --------------- --------------- ---------------
554,644 1,115,874 548,239 1,090,822
-------------- --------------- --------------- ---------------
OPERATING EXPENSES:
FEES AND EXPENSES TO AFFILIATES 69,334 148,764 66,952 136,648
PROPERTY TAXES AND INSURANCE 36,114 72,228 34,737 69,474
UTILITIES 27,472 58,222 27,814 59,682
REPAIRS AND MAINTENANCE 38,239 70,775 39,586 75,549
ADVERTISING 10,118 19,375 11,313 20,079
DEPRECIATION AND AMORTIZATION 79,141 195,199 109,188 221,856
OTHER 1,441 6,001 7,318 17,455
-------------- --------------- --------------- ---------------
261,859 570,564 296,908 600,743
INTEREST EXPENSE 211,635 423,801 213,686 427,855
NONOPERATING EXPENSES 72,855 104,026 23,535 38,709
--------------- --------------- ---------------
--------------
TOTAL EXPENSES 546,349 1,098,391 534,129 1,067,307
-------------- --------------- --------------- ---------------
NET INCOME $8,295 $17,483 $14,110 $23,515
============== =============== =============== ===============
NET INCOME ALLOCATED TO GENERAL PARTNERS $83 $175 $141 $235
============== =============== =============== ===============
NET INCOME ALLOCATED TO LIMITED PARTNERS $8,212 $17,308 $13,969 $23,280
============== =============== =============== ===============
NET INCOME PER LIMITED PARTNERSHIP UNIT, BASED
ON NUMBER OF UNITS OUTSTANDING (61,928) $0.13 $0.28 $0.23 $0.38
============== =============== =============== ===============
</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, 1997 $403,634 ($25,091) $378,543
DISTRIBUTION TO PARTNERS (300,000) 0 (300,000)
NET INCOME 17,308 175 17,483
---------------- ---------------- --------------
BALANCE, JUNE 30, 1997 $120,942 ($24,916) $96,026
================ ================ ==============
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
================ ================ ==============
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,
1997 1996
---------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $17,483 $23,515
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES-
DEPRECIATION AND AMORTIZATION 195,199 221,856
CHANGE IN ASSETS AND LIABILITIES:
INCREASE IN ACCRUED AND OTHER LIABILITIES 66,573 54,540
INCREASE IN ESCROWS AND OTHER ASSETS, NET (60,055) (53,268)
---------------- -----------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 219,200 246,643
---------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
ADDITIONS TO RENTAL PROPERTIES (29,194) (26,640)
---------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
DISTRIBUTION TO PARTNERS (300,000) (400,000)
REPAYMENT OF MORTGAGE LOANS (44,901) (40,847)
---------------- -----------------
NET CASH USED IN FINANCING ACTIVITIES (344,901) (440,847)
---------------- -----------------
NET DECREASE IN CASH AND CASH INVESTMENTS (154,895) (220,844)
CASH AND CASH INVESTMENTS, BEGINNING OF YEAR 654,810 727,160
---------------- -----------------
CASH AND CASH INVESTMENTS, JUNE 30 $499,915 $506,316
================ =================
</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, 1997, results of operations for the three months and six months
ended June 30, 1997 and 1996, and cash flow for the six months ended June 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 six-month period ending
June 30, 1997 as follows:
Management fee of 5% of gross revenues $54,252
Reimbursed maintenance salaries and benefits 47,032
Reimbursed property manager salaries and benefits 47,480
--------
$148,764
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, 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>
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, 1997, partners' equity was $96,026 or 1% of total assets and
cash and cash reserves amounted to $499,915. The Partnership had accrued
liabilities of $92,625 that consisted of 1997 property taxes of $62,712,
management fees due to an affiliate of $8,991, trade accounts payable of $20,120
and resident prepaid rent of $802.
Net cash provided by operations totaled $219,200 for the six months ended
June 30, 1997. This is compared to net cash provided by operations of $246,643
for the corresponding period in 1996. The Partnership had three 9.5% mortgage
loans in the amount of $8,895,760 outstanding at June 30, 1997. Principal
payments of $44,901 were made during the six month period ended June 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 six months ended June 30, 1997, actual combined
average economic occupancy was 97% and actual net cash flow from partnership
activities (exclusive of changes in assets and liabilities and distribution to
partners) was $138,587. 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 June 30, 1997,
actual combined nonrecurring replacement expenses and additions to rental
properties have totaled $111,864. 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 six months ended
June 30, 1997 and 1996.
Results of operations for the three months ended June 30, 1997 reflect an
average economic occupancy of 97% compared to 98% for the corresponding period
in 1996. A second quarter comparison of 1997 and 1996 reflects higher rental
income of $9,373 during 1997 due to rents being increased 3% over rates charged
in 1996. Overall, total income for the second quarter ended June 30, 1997 was
$6,405 higher than the corresponding period in 1996.
Operating expenses were $261,859 for the three months ended June 30, 1997,
compared to $296,908 for the corresponding period in 1996 which reflects a
variance of $35,049. 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 $2,382. This increase was due to the cost
of additional maintenance personnel. Property taxes and insurance were higher by
$1,377 due to increased rates. Depreciation and amortization was lower by 30,047
due to an adjustment made in the second quarter of 1997.
After interest expense of $211,635 and nonoperating expenses (partnership
expenses and nonrecurring replacement costs) of $72,855, partnership operations
recognized a net income of $8,295 for the three
-9-
<PAGE>
months ended June 30, 1997. This is compared to a net income of $14,110 for the
corresponding period in 1996.
Overall the Partnership recognized a net increase in total revenues of
$25,052 (due to rents being increased 3% over rates charged in 1996) and a net
decrease in total operating expenses of $30,179 (due mainly to a 1997 adjustment
in deprecation and amortization) for the six months ended June 30, 1997 compared
to the corresponding period in 1996. After interest expense of $423,801 and
other operating expenses of $104,026 (partnership expenses and nonrecurring
replacement costs) the Partnership had a net income of $17,483 for the six
months ended June 30, 1997. This is compared to a net income of $23,515 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 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-
<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: July 29, 1997
By: Robert J. Brietz, Executive Vice President
Date: July 29, 1997
-11-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Article Type 5 for Bass Income Plus Fund for Period Ending June 30, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 499,915
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 38,611
<PP&E> 11,907,916
<DEPRECIATION> (3,523,845)
<TOTAL-ASSETS> 9,117,551
<CURRENT-LIABILITIES> 125,765
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 96,026
<TOTAL-LIABILITY-AND-EQUITY> 9,117,551
<SALES> 1,052,869
<TOTAL-REVENUES> 1,115,874
<CGS> 0
<TOTAL-COSTS> 375,365
<OTHER-EXPENSES> 299,225
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 423,801
<INCOME-PRETAX> 17,483
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,483
<EPS-PRIMARY> 0.28
<EPS-DILUTED> 0.28
</TABLE>
