-----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, BojfR6Vu690DQjR+wZAeTBw4pWBBGSicwEA68c1gugeqa78b9/6FJ8p1CEDC4xGX 9IJZeOxyPN7557XcG1/kxQ== 0000351931-97-000003.txt : 19970514 0000351931-97-000003.hdr.sgml : 19970514 ACCESSION NUMBER: 0000351931-97-000003 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970513 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL PROPERTY INVESTORS 8 /CA/ CENTRAL INDEX KEY: 0000763701 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 133254885 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-14554 FILM NUMBER: 97602016 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 4049169090 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 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, 1997 [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period.........to......... Commission file number 0-14554 NATIONAL PROPERTY INVESTORS 8 (Exact name of small business issuer as specified in its charter) California 13-3254885 (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 telephone 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 NATIONAL PROPERTY INVESTORS 8 CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) March 31, 1997 Assets Cash and cash equivalents: Unrestricted $ 2,218 Restricted 73 Accounts receivable 33 Escrow for taxes 154 Restricted escrows 1,245 Other assets 245 Investment properties: Land $ 1,970 Buildings and related personal property 27,645 29,615 Less accumulated depreciation (14,201) 15,414 Total Assets $19,382 Liabilities and Partners' Capital Accounts payable and accrued expense $ 252 Accrued taxes 501 Tenant security deposits 73 Mortgage notes payable 10,969 Partners' capital (deficit) Limited partners (44,882 units outstanding) $ 7,734 General partners (147) 7,587 Total Liabilities and Partners' Capital $19,382 See Accompanying Notes to Consolidated Financial Statements b) NATIONAL PROPERTY INVESTORS 8 CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data)
Three Months Ended March 31, 1997 1996 Revenues: Rental $ 1,040 $ 1,053 Other 97 74 Total revenues 1,137 1,127 Expenses: Operating 331 330 General and administrative 40 74 Maintenance 101 109 Interest 277 222 Depreciation 287 287 Property taxes 125 151 Total expenses 1,161 1,173 Net loss $ (24) $ (46) Loss allocated to general partners (1%) $ -- $ -- Loss allocated to limited partners (99%) (24) (46) Net loss $ (24) $ (46) Net loss per limited partnership unit $ ( .53) $ (1.02) See Accompanying Notes to Consolidated Financial Statements
c) NATIONAL PROPERTY INVESTORS 8 CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except for unit data)
Limited Partnership General Limited Total Units Partners Partners Capital Original capital contributions 44,882 $ 1 $ 22,441 $ 22,442 Partners' (deficit) capital at December 31, 1996 44,882 $ (147) $ 7,758 $ 7,611 Net loss for the three months ended March 31, 1997 -- -- (24) (24) Partners' (deficit) capital at March 31, 1997 44,882 $ (147) $ 7,734 $ 7,587 See Accompanying Notes to Consolidated Financial Statements
d) NATIONAL PROPERTY INVESTORS 8 CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Three Months Ended March 31, 1997 1996 Cash flows from operating activities: Net loss $ (24) $ (46) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 287 287 Amortization of loan costs 10 2 Change in accounts: Other assets 230 (144) Accounts payable and accrued expenses (57) 302 Tenant security deposits (6) (6) Net cash provided by operating activities 440 395 Cash flows used in investing activities: Property improvements and replacements (79) (40) Cash flows used in financing activities: Payments on mortgage notes payable (14) (49) Net increase in unrestricted cash and cash equivalents 347 306 Unrestricted cash and cash equivalents at beginning of period 1,871 2,383 Unrestricted cash and cash equivalents at end of period $ 2,218 $ 2,689 Supplemental information: Cash paid for interest $ 224 $ 2,559 See Accompanying Notes to Consolidated Financial Statements
e) NATIONAL PROPERTY INVESTORS 8 NOTES TO CONSOLIDATED 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 NPI Equity Investments, Inc. ("NPI Equity" or the "Managing General Partner"), a Florida corporation, 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, 1997, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1997. For further information, refer to the financial statements and footnotes thereto included in National Property Investors 8's (the "Partnership") annual report on Form 10-KSB for the year ended December 31, 1996. Certain reclassifications have been made to the 1996 information to conform to the 1997 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. Pursuant to a series of transactions which closed during the first half of 1996, affiliates of Insignia Financial Group, Inc. ("Insignia") acquired all of the issued and outstanding shares of stock of NPI Equity and National Property Investors, Inc. ("NPI"). NPI Equity is a wholly-owned subsidiary of NPI. In connection with these transactions, affiliates of Insignia appointed new officers and directors of NPI Equity. The following transactions with Insignia, NPI and affiliates were charged to expense in 1997 and 1996: For the Three Months Ended March 31, (in thousands) 1997 1996 Property management fees (included in operating expenses) $ 49 $ 53 Reimbursement for services of affiliates (included in general and administrative expenses) 29 60 The Partnership insures its properties 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. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of two apartment complexes. The following table sets forth the average occupancy of the properties for the three months ended March 31, 1997 and 1996: Average Occupancy Property 1997 1996 Williamsburg on the Lake Apartments Indianapolis, Indiana (1) 85% 92% Huntington Athletic Club Apartments Morrisville, North Carolina 91% 92% 1)The Managing General Partner attributes the decrease in occupancy at the Williamsburg on the Lake Apartments property to increasing qualifying standards for residents and an overall decrease in occupancy in the Indianapolis market. The Partnership's net loss for the three months ended March 31, 1997, was $24,000 versus $46,000 for the comparable period of 1996. The decrease in net loss is primarily due to an increase in other income and decreases in general and administrative expenses. Other income increased due to increases in interest income and lease cancellation fees. General and administrative expenses decreased due primarily to non-recurring expenses, which were incurred in the first quarter of 1996, relating to the relocation of the partnership administration offices. Included in maintenance expense for the three months ended March 31, 1997, is $17,000 of major repairs and maintenance comprised of major landscaping and small equipment purchases. Included in maintenance expense for the three months ended March 31, 1996, is $10,000 of major repairs and maintenance comprised of exterior and interior building improvements. As part of the ongoing business plan of the Partnership, the Managing General Partner monitors the rental market environment of its investment properties 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 market conditions, there is no guarantee that the Managing General Partner will be able to sustain such a plan. At March 31, 1997, the Partnership had unrestricted cash of $2,218,000, as compared to $2,689,000 at March 31, 1996. Net cash provided by operating activities increased primarily as a result of a decrease in other assets. This was partially offset by a decrease in accounts payable and accrued expenses. Other assets decreased due to a decrease in escrow accounts, as reserves required by HUD are no longer necessary after the refinancing of the mortgage secured by the Williamsburg on the Lake Apartments property (see discussion below). Accounts payable and accrued expenses decreased due to the timing of payments of accrued expenses. Net cash used in investing activities increased due primarily to the construction of a new recreation center at the Williamsburg on the Lake Apartments property. Net cash used in financing activities decreased due to the refinancing of the mortgage debt secured by the Williamsburg on the Lake Apartments property (see discussion below). In November 1996, the Partnership refinanced the mortgage debt secured by the Williamsburg on the Lake Apartments property from a HUD insured loan, which required principal and interest payments, to a conventional loan, which requires interest only payments. The Managing General Partner has extended to the Partnership a $500,000 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 against the line of credit 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 properties 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 $10,969,000 is amortized over varying periods. The mortgage encumbering the Huntington Athletic Club Apartments property requires a balloon payment of $3,211,000 in February 2002. The mortgage encumbering the Williamsburg on the Lake Apartments property is interest only with the principal balance of $7,400,000 due November 2003. Future cash distributions will depend on the levels of cash generated from operations, property sales, and the availability of cash reserves. The Managing General Partner is evaluating the economic position of the Partnership and the Partnership's ability to make a distribution. No cash distributions were paid during the three months ended March 31, 1997 or March 31, 1996. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K: No reports on form 8-K were filed during the three months ended March 31, 1997. SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NATIONAL PROPERTY INVESTORS 8 By: NPI EQUITY INVESTMENTS, INC. MANAGING GENERAL PARTNER By: /s/William H. Jarrard, Jr. William H. Jarrard, Jr. President and Director By: /s/Ronald Uretta Ronald Uretta Vice President and Treasurer Date: May 13, 1997 EX-27 2
5 This schedule contains summary financial information extracted from National Property Investors 8 1997 First Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000763701 NATIONAL PROPERTY INVESTORS 8 1,000 3-MOS DEC-31-1997 MAR-31-1997 2,218 0 33 0 0 0 29,615 14,201 19,382 0 10,969 0 0 0 7,587 19,382 0 1,137 0 0 1,161 0 277 (24) 0 (24) 0 0 0 (24) (.53) 0 Registrant has an unclassified balance sheet. Multiplier is 1.
-----END PRIVACY-ENHANCED MESSAGE-----