-----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, Dz0iFJTK2tKlbjIQcmwmqqPmqn7GRj+DSEILJRTQjXfOtogsWVDi2x2vIRM+ODpQ 3ymS86wC6VmU7Z7qUHLAoQ== 0000812564-96-000004.txt : 19960513 0000812564-96-000004.hdr.sgml : 19960513 ACCESSION NUMBER: 0000812564-96-000004 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960510 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: 96559091 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 March 31, 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 (in thousands, except for unit data)
March 31, 1996 (Unaudited) Assets Cash and cash equivalents $ 254 Escrow deposits 66 Security deposits and other assets 101 Investment properties: Land $ 352 Buildings and related personal property 5,207 5,559 Less accumulated depreciation (3,941) 1,618 Total assets $ 2,039 Liabilities and Partners' Equity Accounts payable and accrued expenses $ 104 Tenants' security deposits payable 57 Mortgage payable 1,189 Partners' Equity (Deficit): Limited partners' (45,656 units outstanding) $ 712 General partners' (23) 689 Total liabilities and partners' equity $ 2,039 See Notes to Financial Statements
b) NATIONAL PROPERTY INVESTORS II STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except for unit data)
Three Months Ended March 31, 1996 1995 Revenues: Rental income $ 300 $ 297 Other income 15 13 Total revenues 315 310 Expenses: Operating 183 163 Depreciation 43 65 General and administrative 34 48 Mortgage interest 27 34 Total expenses 287 310 Net income $ 28 $ -- Net income allocated to general partners (1%) $ -- $ -- Net income allocated to limited partners (99%) 28 -- Net income $ 28 $ -- Net income per limited partnership unit $ .61 $ -- See Notes to Financial Statements
c) NATIONAL PROPERTY INVESTORS II STATEMENTS OF PARTNERS' EQUITY (DEFICIT) (Unaudited) (in thousands, except unit data)
Limited General Limited Partnership Partners' Partners' Total Units Deficit Equity Equity Original capital contributions 45,656 $ 1 $ 22,828 $ 22,829 Partners' (deficit) equity at December 31, 1995 45,656 $ (23) $ 684 $ 661 Net income for the three months ended March 31, 1996 -- -- 28 28 Partners' (deficit) equity at March 31, 1996 45,656 $ (23) $ 712 $ 689 See Notes to Financial Statements
d) NATIONAL PROPERTY INVESTORS II STATEMENTS OF CASH FLOWS (Unaudited) (in thousands, except for unit data)
Three Months Ended March 31, 1996 1995 Cash flows from operating activities: Net income $ 28 $ -- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 43 65 Amortization of mortgage costs -- 3 Change in accounts: Escrow deposits 74 (24) Security deposits and other assets (14) (2) Accounts payable and accrued expenses (36) 13 Tenants' security deposits payable (6) 2 Net cash provided by operating activities 89 57 Cash flows from investing activities: Property improvements and replacements (11) (17) Net cash used in investing activities (11) (17) Cash flows from financing activities: Mortgage principal repayments (40) (37) Net cash used in financing activities (40) (37) Net increase in cash and cash equivalents 38 3 Cash and cash equivalents at beginning of period 216 330 Cash and cash equivalents at end of period $ 254 $ 333 Supplemental information: Interest paid $ 30 $ 31 See Notes to Financial Statements
e) NATIONAL PROPERTY INVESTORS II NOTES TO FINANCIAL STATEMENTS Note A - Basis of Presentation The accompanying unaudited financial statements 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 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 month period ended March 31, 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 Insignia Financial Group, Inc., National Property Investors, Inc., and affiliates were charged to expense in 1996 and 1995: For the Three Months Ended March 31, 1996 1995 Property management fees (included in operating expenses) $ 15,000 $ 15,000 Reimbursement for services of affiliates (included 25,000 41,000 in general and administrative expenses) For the period from January 19, 1996, to March 31, 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 three months ended March 31, 1995, are insurance premiums of approximately $10,000 which were paid to the Managing General Partner under a master insurance policy arranged for by the Managing General Partner. NPI Equity Investments, Inc. ("NPI Equity" or the "Managing General Partner") is the general partner of the Partnership. NPI Equity is a wholly owned subsidiary of National Property Investors, Inc. ("NPI, Inc.") On August 17, 1995, the stockholders of NPI, Inc. entered into an agreement to sell to IFGP Corporation, a Delaware corporation ("Insignia"), all of the issued and outstanding common stock of NPI, Inc. for an aggregate purchase price of $1,000,000. The closing of the transactions comtemplated by the above mentioned agreement (the "Closing") occured on January 19, 1996. Upon the closing, the officers and directors of NPI and NPI Equity 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's investment property consists of one apartment complex, Sugar Mill Apartments, located in Melbourne, Florida. The average occupancy for the three month periods ended March 31, 1996 and 1995 was 94% and 98%, respectively. The decline in occupancy from 1995 to 1996 is attributable to a higher level of turnover than in previous years from the student tenants. The Partnership's net income for the three months ended March 31, 1996, was approximately $28,000 versus breaking even for the same period of 1995. The increase in net income is attributable to decreases in depreciation expense, general and administrative expense and interest expense. 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 of the Managing General Partner; and the decrease in interest expense is attributable to the amortization of the mortgage principal balance. Additionally, there was an increase in other income which was attributable to an increase in lease cancellation fees due to the increased turnover. Partially offsetting these increases to income, was an increase in operating expenses which is attributable to an increase in water expenses due to two slab leaks which have now been repaired. 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 March 31, 1996, the Partnership had unrestricted cash of $254,000 as compared to $333,000 at March 31, 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 along with an increase in accounts payable and accrued expenses due to the prepayment of rent. The decrease in cash used in investing activities is due to a decrease in property replacements. The increase in cash used in financing activities is due to the amortization of the mortgage principal balance. The Managing General Partner has extended to the Registrant a $300,000 line of credit. At the present time, the Registrant 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 Registrant'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 $1,189,000 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. 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 quarter 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 Registrant'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: Form 8-K dated January 19, 1996 was filed reporting the change in control of the Registrant. 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. Managing General Partner /s/William H. Jarrard, Jr. President and Director /s/Ronald Uretta Principal Financial Officer and Principal Accounting Officer Date: May 9, 1996 EX-27 2
5 This schedule contains summary financial information extracted from National Properties Investors II 1996 First Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000216679 NATIONAL PROPERTY INVESTORS II 1,000 3-MOS DEC-31-1996 MAR-31-1996 254 0 0 0 0 0 5,559 (3,941) 2,039 0 1,189 0 0 0 689 2,039 0 315 0 0 287 0 27 0 0 28 0 0 0 28 .61 0 The Registrant has an unclassified balance sheet.
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