-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SSy99Pr0O5sX7O5RiPThqOfz3WsdWGAiEaB41pjbtvCkdpTgvSHjZTAZDfHuKsWj Fxsb5HJbsXHQ60h+McpX2A== 0000708870-96-000001.txt : 19960809 0000708870-96-000001.hdr.sgml : 19960809 ACCESSION NUMBER: 0000708870-96-000001 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960808 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL PROPERTY INVESTORS II CENTRAL INDEX KEY: 0000216679 STANDARD INDUSTRIAL CLASSIFICATION: LAND SUBDIVIDERS & DEVELOPERS (NO CEMETERIES) [6552] IRS NUMBER: 132906846 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-09138 FILM NUMBER: 96606092 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8642391513 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 10QSB 1 FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Quarterly or Transitional Report (As last amended by 34-32231, eff. 6/3/93.) U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (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 [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period.........to......... Commission file number 0-9138 NATIONAL PROPERTY INVESTORS II (Exact name of small business issuer as specified in its charter) California 13-2906846 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Insignia Financial Plaza Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 Issuer's phone number Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports ), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) NATIONAL PROPERTY INVESTORS II BALANCE SHEET (Unaudited) (in thousands, except unit data) June 30, 1996
Assets Cash and cash equivalents $ 242 Escrow for taxes 90 Other assets 90 Investment properties: Land $ 352 Buildings and related personal property 5,223 5,575 Less accumulated depreciation (3,985) 1,590 $ 2,012 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable and accrued expenses $ 131 Tenant security deposits 53 Mortgage note payable 1,149 Partners' Capital (Deficit): Limited partners' (45,656 units outstanding) $ 702 General partner's (23) 679 $ 2,012 See Notes to Financial Statements
b) NATIONAL PROPERTY INVESTORS II STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data)
Three Months Ended Six Months Ended June 30, June 30, 1996 1995 1996 1995 Revenues: Rental income $ 294 $ 280 $ 594 $ 577 Other income 17 18 32 31 Total revenues 311 298 626 608 Expenses: Operating 198 184 381 347 Interest 30 30 57 64 Depreciation 45 45 88 110 General and administrative 48 52 82 100 Total expenses 321 311 608 621 Net (loss) income $ (10) $ (13) $ 18 $ (13) Net (loss) income allocated to general partner (1%) $ -- $ -- $ -- $ -- Net (loss) income allocated to limited partners (99%) (10) (13) 18 (13) $ (10) $ (13) $ 18 $ (13) Net (loss) income per limited partnership unit $ (.22) $ (.28) $ .39 $ (.28) See Notes to Financial Statements
c) NATIONAL PROPERTY INVESTORS II STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except unit data)
Limited General Limited Partnership Partner's Partners' Units Deficit Equity Total Original capital contributions 45,656 $ 1 $ 22,828 $ 22,829 Partners' (deficit) capital at December 31, 1995 45,656 $ (23) $ 684 $ 661 Net income for the six months ended June 30, 1996 -- -- 18 18 Partners' (deficit) capital at June 30, 1996 45,656 $ (23) $ 702 $ 679 See Notes to Financial Statements
d) NATIONAL PROPERTY INVESTORS II STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Six Months Ended June 30, 1996 1995 Cash flows from operating activities: Net income (loss) $ 18 $ (13) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 88 110 Amortization of mortgage costs -- 4 Change in accounts: Escrow for taxes 50 (48) Other assets (3) (7) Accounts payable and accrued expenses (10) 26 Tenant security deposit liabilities (10) (10) Net cash provided by operating activities 133 62 Cash flows from investing activities: Property improvements and replacements (27) (19) Net cash used in investing activities (27) (19) Cash flows from financing activities: Payments of mortgage note payable (80) (76) Net cash used in financing activities (80) (76) Net increase (decrease) in cash and cash equivalents 26 (33) Cash and cash equivalents at beginning of period 216 330 Cash and cash equivalents at end of period $ 242 $ 297 Supplemental information: Cash paid for interest $ 59 $ 60 See Notes to Financial Statements
e) NATIONAL PROPERTY INVESTORS II NOTES TO FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited financial statements of National Property Investors II (the "Partnership") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of NPI Equity Investments, Inc. ("NPI Equity" or the "Managing General Partner"), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 1996, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1996. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-K for the year ended December 31, 1995. Certain reclassifications have been made to the 1995 information to conform to the 1996 presentation. Note B - Transactions with Affiliated Parties The Partnership has no employees and is dependent on the Managing General Partner and its affiliates for the management and administration of all partnership activities. The Partnership Agreement provides for payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following transactions with affiliates of Insignia Financial Group, Inc. ("Insignia"), National Property Investors, Inc.("NPI"), and affiliates of NPI were charged to expense in 1996 and 1995: For the Six Months Ended June 30, 1996 1995 Property management fees (included in operating expenses) $31,000 $30,000 Reimbursement for services of affiliates (included in general and administrative expenses) 59,000 84,000 For the period from January 19, 1996, to June 30, 1996, the Partnership insured its property under a master policy through an agency and insurer unaffiliated with the Managing General Partner. An affiliate of the Managing General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the current year's master policy. The current agent assumed the financial obligations to the affiliate of the Managing General Partner who received payments on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the Managing General Partner by virtue of the agent's obligations is not significant. Note B - Transactions with Affiliated Parties (continued) Included in operating expenses for the six months ended June 30, 1995, are insurance premiums of approximately $20,000 which were paid to the Managing General Partner under a master insurance policy arranged for by the Managing General Partner. NPI Equity is the general partner of the Partnership. NPI Equity is a wholly- owned subsidiary of NPI. On August 17, 1995, the stockholders of NPI entered into an agreement to sell to IFGP Corporation, a Delaware corporation, an affiliate of Insignia, a Delaware corporation, all of the issued and outstanding common stock of NPI for an aggregate purchase price of $1,000,000. The closing of the transactions contemplated by the above mentioned agreement (the "Closing") occurred on January 19, 1996. Upon the Closing, the officers and directors of NPI and the Managing General Partner resigned and IFGP Corporation caused new officers and directors to each of those entities to be elected. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership has one investment property, Sugar Mill Apartments, located in Melbourne, Florida. The average occupancy for the six month periods ended June 30, 1996 and 1995, was 93% and 94%, respectively. The Partnership's net income for the six months ended June 30, 1996, was approximately $18,000 compared to a net loss of approximately $13,000 for the same period of 1995. The Partnership incurred a net loss of approximately $10,000 for the three months ended June 30, 1996 compared to a net loss of approximately $13,000 for the three months ended June 30, 1995. The increase in net income for the six month period is attributable to decreases in depreciation and general and administrative expenses. The decrease in depreciation expense was due to approximately $396,000 of fixed assets becoming fully depreciated in 1995. The decrease in general and administrative expenses is due to a decrease in cost reimbursements paid to affiliates of the Managing General Partner. As part of the ongoing business plan of the Partnership, the Managing General Partner monitors the rental market environment of its investment property to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the partnership from increases in expenses. As part of this plan, the Managing General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, due to changing market conditions, which can result in the use of rental concessions and rental reductions to offset softening conditions, there is no guarantee that the Managing General Partner will be able to sustain such a plan. At June 30, 1996, the Partnership had unrestricted cash of $242,000 as compared to $297,000 at June 30, 1995. Net cash provided by operating activities increased primarily as a result of a decrease in escrows caused by a change in the timing of the payment of the real estate taxes. The increase in cash used in investing activities is due to an increase in property improvements. The increase in cash used in financing activities is due to the payment of the mortgage principal balance. The Managing General Partner has extended to the Partnership a $300,000 line of credit. At the present time, the Partnership has no outstanding amounts due under this line of credit. Based on present plans, the Managing General Partner does not anticipate the need to borrow in the near future. Other than cash and cash equivalents, the line of credit is the Partnership's only unused source of liquidity. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the property to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of $1,149,000 is based on a variable rate, amortized over a ten year period so that the mortgage will be repaid on the maturity date of October 5, 2001, subject to the holder's right to call the mortgage at one year intervals commencing October 5, 1994. If the mortgage is not called by the holder, the Partnership is required to pay an "extension fee" equal to one-half on one percent (0.5%) of the then outstanding principal balance on the mortgage for each year during which the mortgage is not so called. The Managing General Partner is confident that the mortgage can be extended or replaced should the holder elect to call the mortgage in October 1996. The Managing General Partner currently is marketing the Partnership's investment property for sale. Future cash distributions will depend on the levels of cash generated from operations, a property sale, and the availability of cash reserves. No cash distributions were paid in 1995 or during the first six months of 1996. To date, limited partners have received cash in excess of their original investment. Any additional return is dependent upon the operations and eventual sales price of the Partnership's remaining property. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K: None filed during the quarter ended June 30, 1996. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NATIONAL PROPERTY INVESTORS II By: NPI EQUITY INVESTMENTS, INC. Its Managing General Partner By: /s/William H. Jarrard, Jr. President and Director By: /s/Ronald Uretta Principal Financial Officer and Principal Accounting Officer Date: August 8, 1996 EX-27 2
5 This schedule contains summary financial information extracted from National Property Investors II 1996 Second Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000216679 NATIONAL PROPERTY INVESTORS II 1,000 6-MOS DEC-31-1996 JUN-30-1996 242 0 0 0 0 0 5,575 3,985 2,012 0 1,149 0 0 0 679 2,012 0 626 0 0 608 0 57 0 0 0 0 0 0 18 .39 0 The Registrant has an unclassified balance sheet. Multiplier is 1.
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