-----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, D52HlnkL6PEwodSVMSbm22hGfwFu3g2LLC7bP8Q1QyDQmPjp7184WBZl3u6WVFx+ UVdW6t2MJvaloh9u0YZf0w== 0000711642-01-500135.txt : 20010810 0000711642-01-500135.hdr.sgml : 20010810 ACCESSION NUMBER: 0000711642-01-500135 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010809 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: 1702242 BUSINESS ADDRESS: STREET 1: 55 BEATIE PLACE STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8642391000 MAIL ADDRESS: STREET 1: 5 BEATTIE PLACE STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 FORMER COMPANY: FORMER CONFORMED NAME: INTEGRATED RESOURCES NATIONAL PROPERTY INVESTORS 8 DATE OF NAME CHANGE: 19920901 FORMER COMPANY: FORMER CONFORMED NAME: INTERGRATED RESOURCES NATIONAL PROPERTY INVESTORS 8 DATE OF NAME CHANGE: 19910402 FORMER COMPANY: FORMER CONFORMED NAME: NPI EQUITY INVESTMENTS INC DATE OF NAME CHANGE: 19940202 10QSB 1 npi8.txt NPI8 FORM 10-QSB--QUARTERLY OR TRANSITIONAL 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 June 30, 2001 [ ] 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 0-14554 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.) 55 Beattie Place, P.O. Box 1089 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 a) NATIONAL PROPERTY INVESTORS 8 BALANCE SHEET (Unaudited) (in thousands, except unit data) June 30, 2001
Assets Cash and cash equivalents $ 461 Receivables and deposits 277 Restricted escrows 74 Other assets 291 Investment properties: Land $ 1,970 Buildings and related personal property 30,325 32,295 Less accumulated depreciation (19,562) 12,733 $ 13,836 Liabilities and Partners' Deficit Liabilities Accounts payable $ 78 Tenant security deposit liabilities 80 Accrued property taxes 363 Other liabilities 306 Mortgage notes payable 14,619 Partners' Deficit General partner $ (239) Limited partners (44,882 units issued and outstanding) (1,371) (1,610) $ 13,836 See Accompanying Notes to Financial Statements
b) NATIONAL PROPERTY INVESTORS 8 STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per unit data)
Three Months Ended Six Months Ended June 30, June 30, 2001 2000 2001 2000 Revenues: Rental income $ 1,159 $ 1,092 $ 2,263 $ 2,214 Other income 102 90 180 164 Total revenues 1,261 1,182 2,443 2,378 Expenses: Operating 477 458 903 842 General and administrative 88 66 142 177 Interest 292 266 587 498 Depreciation 359 326 716 646 Property taxes 114 127 197 249 Total expenses 1,330 1,243 2,545 2,412 Loss before extraordinary item (69) (61) (102) (34) Extraordinary loss on early extinguishment of debt -- (181) -- (181) Net loss $ (69) $ (242) $ (102) $ (215) Net loss allocated to general partner (1%) $ (1) $ (2) $ (1) $ (2) Net loss allocated to limited partners (99%) (68) (240) (101) (213) $ (69) $ (242) $ (102) $ (215) Per limited partnership unit: Loss before extraordinary item $ (1.52) $ (1.36) $ (2.25) $ (0.76) Extraordinary loss on the early extinguishment of debt -- (3.99) -- (3.99) Net loss $ (1.52) $ (5.35) $ (2.25) $ (4.75) Distributions per limited partnership unit $ 9.38 $ 73.37 $ 9.38 $ 96.05 See Accompanying Notes to Financial Statements
c) NATIONAL PROPERTY INVESTORS 8 STATEMENT OF CHANGES IN PARTNERS' DEFICIT (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partner Partners Total Original capital contributions 44,882 $ 1 $22,441 $22,442 Partners' deficit at December 31, 2000 44,882 $ (234) $ (849) $(1,083) Distribution to partners -- (4) (421) (425) Net loss for the six months ended June 30, 2001 -- (1) (101) (102) Partners' deficit at June 30, 2001 44,882 $ (239) $(1,371) $(1,610) See Accompanying Notes to Financial Statements
d) NATIONAL PROPERTY INVESTORS 8 STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Six Months Ended June 30, 2001 2000 Cash flows from operating activities: Net loss $ (102) $ (215) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 716 646 Amortization of loan costs 21 18 Extraordinary loss on early extinguishment of debt -- 181 Change in accounts: Receivables and deposits (107) (230) Other assets (19) (43) Accounts payable (79) 16 Tenant security deposit liabilities 9 (5) Accrued property taxes 19 (10) Other liabilities 73 63 Net cash provided by operating activities 531 421 Cash flows from investing activities: Property improvements and replacements (362) (283) Net withdrawals from (deposits to) restricted escrows 464 (454) Net cash provided by (used in) investing activities 102 (737) Cash flows from financing activities: Payments on mortgage note payable (78) (22) Payoff of mortgage note payable -- (3,364) Proceeds from mortgage note payable -- 7,372 Prepayment penalty -- (168) Loan costs paid (14) (175) Distributions to partners (425) (4,355) Net cash used in financing activities (517) (712) Net increase (decrease) in cash and cash equivalents 116 (1,028) Cash and cash equivalents at beginning of period 345 1,743 Cash and cash equivalents at end of period $ 461 $ 715 Supplemental disclosure of cash flow information: Cash paid for interest $ 567 $ 458 At December 31, 2000, approximately $97,000 of property improvements and replacements were included in accounts payable. See Accompanying Notes to Financial Statements
e) NATIONAL PROPERTY INVESTORS 8 NOTES TO FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited financial statements of National Property Investors 8 (the "Partnership" or "Registrant") 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. (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, 2001 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2001. For further information, refer to the financial statements and footnotes thereto included in the Partnership's Annual Report on Form 10-KSB for the year ended December 31, 2000. The General Partner is an affiliate of Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. Segment Reporting Statement of Financial Accounting Standards ("SFAS") No. 131, "Disclosure about Segments of an Enterprise and Related Information" established standards for the way that public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. It also established standards for related disclosures about products and services, geographic areas, and major customers. As defined in SFAS No. 131, the Partnership has only one reportable segment. The Managing General Partner believes that segment-based disclosures will not result in a more meaningful presentation than the financial statements as currently presented. 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 (i) payments to affiliates for services and (ii) reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following expenditures were paid or accrued to the Managing General Partner and affiliates during the six months ended June 30, 2001 and 2000: 2001 2000 (in thousands) Property management fees (included in operating expenses) $124 $120 Reimbursement for services of affiliates (included in investment properties and operating and general and administrative expenses) 75 64 Non-accountable partnership reimbursement (included in general and administrative expense) 37 67 Partnership management fee (included in general and administrative expense) -- 24 Loan costs (included in other assets) -- 74 During the six months ended June 30, 2001 and 2000, affiliates of the Managing General Partner were entitled to receive 5% of gross receipts from both of the Registrant's properties for providing property management services. The Registrant paid to such affiliates approximately $124,000 and $120,000 for the six months ended June 30, 2001 and 2000, respectively. An affiliate of the Managing General Partner received reimbursement of accountable administrative expenses amounting to approximately $75,000 and $64,000 for the six months ended June 30, 2001 and 2000, respectively. For services relating to the administration of the Partnership and operation of its properties, the Managing General Partner is entitled to receive payment for non-accountable expenses up to a maximum of $150,000 per year of distributions from operations based upon the number of Partnership units sold, subject to certain limitations. The Managing General Partner received approximately $37,000 and $67,000 for the six months ended June 30, 2001 and 2000, respectively, for non-accountable expense reimbursements. For managing the affairs of the Partnership, the Managing General Partner of the Partnership is entitled to receive a partnership management fee. The fee is equal to 4% of the Partnership's adjusted cash from operations, as defined in the Partnership Agreement, in any year, provided that 50% of the fee shall not be paid until the Partnership has distributed to the limited partners adjusted cash from operations in such year which is equal to 5% of the limited partners' adjusted invested capital, as defined, on a non-cumulative basis. In addition, 50% of the fee shall not be paid until the Partnership has distributed to the limited partners adjusted cash from operations in such year which is equal to 8% of the limited partners' adjusted invested capital on a non-cumulative basis. The fee shall be paid when adjusted cash from operations is distributed to the limited partners. The Managing General Partner was paid approximately $24,000 during the six months ended June 30, 2000 for such fees. The Managing General Partner was not entitled to receive a similar reimbursement during the six months ended June 30, 2001. In addition to reimbursement for services of affiliates, the Partnership paid an affiliate of the General Partner approximately $74,000 for loan costs related to the refinancing of one of the Partnership's properties during the six months ended June 30, 2000. These costs were capitalized and are included in other assets on the consolidated balance sheet. The Managing General Partner has established a revolving credit facility (the "Partnership Revolver") to be used to fund deferred maintenance and working capital needs of the Partnership. The maximum draw available to the Partnership under the Partnership Revolver is $500,000. Loans under the Partnership Revolver will have a term of 365 days, be unsecured and bear interest at the rate of 2% per annum in excess of the prime rate announced from time to time by Chase Manhattan Bank. The maturity date of such borrowing will be accelerated in the event of: (i) the removal of the Managing General Partner (whether or not For Cause); (ii) the sale or refinancing of a property by the Partnership (whether or not a borrowing under the Partnership Revolver was made with respect to such property); or (iii) the liquidation of the Partnership. The Partnership has not borrowed under the Partnership Revolver to date. In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates currently own 26,457 limited partnership units in the Partnership representing 58.95% of the outstanding units. A number of these units were acquired pursuant to tender offers made by AIMCO or its affiliates or affiliates of the Managing General Partner. It is possible that AIMCO or its affiliates will make one or more additional offers to acquire additional limited partnership interests in the Partnership for cash or in exchange for units in the operating partnership of AIMCO. Under the Partnership Agreement, unitholders holding a majority of the units are entitled to take action with respect to a variety of matters, which would include without limitation, voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 58.95% of the outstanding units, AIMCO is in a position to influence all voting decisions with respect to the Registrant. When voting on matters, AIMCO would in all likelihood vote the units it acquired in a manner favorable to the interest of the Managing General Partner because of its affiliation with the Managing General Partner. However, DeForest Ventures II L.P., from whom AIMCO, through its merger with Insignia, acquired 16,447 units, had agreed for the benefit of non-tendering unitholders, that it would vote these units: (i) against any increase in compensation payable to the Managing General Partner or to affiliates; and (ii) on all other matters submitted by it or its affiliates, in proportion to the votes cast by non tendering unit holders. Except for the foregoing, no other limitations are imposed on AIMCO or its affiliates' right to vote each unit acquired. Note C - Distributions During the six months ended June 30, 2001, the Registrant declared and paid distributions of approximately $425,000 (approximately $421,000 to the limited partners or $9.38 per limited partnership unit) from operations. Subsequent to June 30, 2001, the Registrant declared a distribution of approximately $215,000 (approximately $213,000 to the limited partners or $4.75 per limited partnership unit) from operations. During the six months ended June 30, 2000, the Registrant declared and paid distributions of approximately $4,355,000 (approximately $4,311,000 to the limited partners or $96.05 per limited partnership unit) consisting of approximately $1,177,000 (approximately $1,165,000 to the limited partners or $25.96 per limited partnership unit) from operations and approximately $3,178,000 (approximately $3,146,000 to the limited partners or $70.09 per limited partnership unit) from the refinancing proceeds of Huntington Athletic Club Apartments. Note D - Refinance of Mortgage Note Payable On May 11, 2000, the Partnership refinanced the mortgage encumbering Huntington Athletic Club Apartments. The refinancing replaced indebtedness of approximately $3,364,000 with a new mortgage in the amount of $7,372,000. The new mortgage carries a stated interest rate of 8.15% as compared to the 9.85% interest rate on the old mortgage. Payments on the mortgage loan are due monthly until the loan matures on June 1, 2020 at which time the loan will be fully amortized. In addition, the Partnership was required to establish a repair escrow of approximately $454,000 with the lender for certain capital replacements. Total capitalized loan costs were approximately $160,000 for the year ended December 31, 2000. Additional loan costs of approximately $14,000 were capitalized during the six months ended June 30, 2001. Note E - Legal Proceedings In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its Managing General Partner and several of their affiliated partnerships and corporate entities. The action purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging, among other things, the acquisition of interests in certain general partner entities by Insignia Financial Group, Inc. ("Insignia") and entities which were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. The plaintiffs seek monetary damages and equitable relief, including judicial dissolution of the Partnership. On June 25, 1998, the Managing General Partner filed a motion seeking dismissal of the action. In lieu of responding to the motion, the plaintiffs filed an amended complaint. The Managing General Partner filed demurrers to the amended complaint which were heard February 1999. Pending the ruling on such demurrers, settlement negotiations commenced. On November 2, 1999, the parties executed and filed a Stipulation of Settlement, settling claims, subject to court approval, on behalf of the Partnership and all limited partners who owned units as of November 3, 1999. Preliminary approval of the settlement was obtained on November 3, 1999 from the Court, at which time the Court set a final approval hearing for December 10, 1999. Prior to the December 10, 1999 hearing, the Court received various objections to the settlement, including a challenge to the Court's preliminary approval based upon the alleged lack of authority of prior lead counsel to enter the settlement. On December 14, 1999, the Managing General Partner and its affiliates terminated the proposed settlement. In February 2000, counsel for some of the named plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated the settlement. On June 27, 2000, the Court entered an order disqualifying them from the case and an appeal was taken from the order on October 5, 2000. On December 4, 2000, the Court appointed the law firm of Lieff Cabraser Heimann & Bernstein LLP as new lead counsel for plaintiffs and the putative class. Plaintiffs filed a third amended complaint on January 19, 2001. On March 2, 2001, the Managing General Partner and its affiliates filed a demurrer to the third amended complaint. On May 14, 2001, the Court heard the demurrer to the third amended complaint. On July 10, 2001, the Court issued an order sustaining defendants' demurrer on certain grounds. Plaintiffs have until August 16, 2001 to file a fourth amended complaint. The Managing General Partner does not anticipate that any costs, whether legal or settlement costs, associated with this case will be material to the Partnership's overall operations. The Partnership is unaware of any other pending or outstanding litigation that is not of a routine nature arising in the ordinary course of business. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The matters discussed in this Form 10-QSB contain certain forward-looking statements and involve risks and uncertainties (including changing market conditions, competitive and regulatory matters, etc.) detailed in the disclosures contained in this Form 10-QSB and the other filings with the Securities and Exchange Commission made by the Registrant from time to time. The discussion of the Registrant's business and results of operations, including forward-looking statements pertaining to such matters, does not take into account the effects of any changes to the Registrant's business and results of operations. Accordingly, actual results could differ materially from those projected in the forward-looking statements as a result of a number of factors, including those identified herein. The Partnership's investment properties consist of two apartment complexes. The following table sets forth the average occupancy of the properties for the six months ended June 30, 2001 and 2000: Average Occupancy Property 2001 2000 Williamsburg on the Lake Apartments 92% 93% Indianapolis, Indiana Huntington Athletic Club Apartments 92% 88% Morrisville, North Carolina The Managing General Partner attributes the increase in occupancy at Huntington Athletic Club Apartments to increased advertising and marketing to attract new tenants. Results of Operations The Registrant's net loss for the six months ended June 30, 2001 was approximately $102,000 as compared to a net loss of approximately $215,000 for the six months ended June 30, 2000. The Registrant's net loss for the three month period ended June 30, 2001 was approximately $69,000 as compared to a net loss of approximately $242,000 for the three month period ended June 30, 2000. The decrease in net loss for the three and six month periods ended June 30, 2001 was due to the recognition in 2000 of an extraordinary loss on early extinguishment of debt, as well as an increase in total revenues, partially offset by an increase in total expenses. The extraordinary loss on early extinguishment of debt relates to the refinancing of the mortgage at Huntington Athletic Club Apartments (see "Liquidity and Capital Resources"). Total revenues increased for the three and six month periods ended June 30, 2001 due to increased rental income and other income. Rental income increased due to increased occupancy and decreased concessions at Huntington Athletic Club Apartments and increased average rental rates at Williamsburg on the Lake Apartments which were partially offset by increased bad debt expenses and decreased occupancy at Williamsburg on the Lake Apartments and a decrease in average rental rates at Huntington Athletic Club Apartments. Other income increased due to an increase in laundry income and utilities reimbursements primarily at Williamsburg on the Lake Apartments Total expenses increased for the six months ended June 30, 2001 due to increases in interest, depreciation, and operating expenses which were partially offset by decreases in property tax and general and administrative expenses. Total expenses increased for the three month period ended June 30, 2001 due to increases in interest, depreciation, and general and administrative expenses which were partially offset by a decrease in property tax expense. Interest expense increased due to the refinancing of Huntington Athletic Club Apartments, which increased the debt balance at the property. Depreciation expense increased due to property improvements and replacements during the past twelve months. Operating expenses increased for the six months ended June 30, 2001 primarily due to an increase in expenses associated with the rental of apartments to employees and utility expenses at both of the Partnership's properties, and an increase in maintenance salaries at Williamsburg on the Lake Apartments. Property tax expense decreased due to the timing of the receipt of the property tax bills which affected prior estimates. General and administrative expenses decreased for the six months ended June 30, 2001 due to a decrease in the non-accountable partnership reimbursement and partnership management fees paid to the Managing General Partner from distributions from operations as provided in the Partnership Agreement. General and administrative expenses increased for the three month period ended June 30, 2001 due to an increase in the cost of services included in the management reimbursements to the Managing General Partner as allowed under the Partnership Agreement. In addition, costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement are also included in general and administrative expenses. As part of the ongoing business plan of the Partnership, the Managing General Partner monitors the rental market environment of each of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Registrant from increases in expenses. As part of this plan, the Managing General Partner attempts to protect the Registrant 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. Liquidity and Capital Resources At June 30, 2001, the Partnership held cash and cash equivalents of approximately $461,000 compared to approximately $715,000 at June 30, 2000. The increase of approximately $116,000 in cash and cash equivalents since December 31, 2000 is due to approximately $531,000 of cash provided by operating activities and approximately $102,000 of cash provided by investing activities which was partially offset by approximately $517,000 of cash used in financing activities. Cash provided by investing activities consisted of net withdrawals from escrow accounts maintained by the mortgage lender partially offset by property improvements and replacements. Cash used in financing activities consisted of distributions to the partners, payments of principal made on the mortgage encumbering Huntington Athletic Club Apartments, and the payment of loan costs. The Partnership invests its working capital reserves in interest bearing accounts. On May 11, 2000, the Partnership refinanced the mortgage encumbering Huntington Athletic Club Apartments. The refinancing replaced indebtedness of approximately $3,364,000 with a new mortgage in the amount of $7,372,000. The new mortgage carries a stated interest rate of 8.15% as compared to the 9.85% interest rate on the old mortgage. Payments on the mortgage loan are due monthly until the loan matures on June 1, 2020 at which time the loan will be fully amortized. In addition, the Partnership was required to establish a repair escrow of approximately $454,000 with the lender for certain capital replacements. Total capitalized loan costs were approximately $160,000 for the year ended December 31, 2000. Additional loan costs of approximately $14,000 were capitalized during the six months ended June 30, 2001. 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 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 various properties to adequately maintain the physical assets and other operating needs of the Registrant and to comply with Federal, state and local legal and regulatory requirements. Capital improvements for each of the Registrant's properties are detailed below. Williamsburg on the Lake Apartments During the six months ended June 30, 2001, the Partnership completed approximately $160,000 of budgeted and non-budgeted capital expenditures at Williamsburg on the Lake Apartments consisting primarily of carpet and vinyl replacements, major landscaping, structural improvements, window treatments, and appliances. These improvements were funded from operating cash flow and the Partnership's reserves. The Partnership has evaluated the capital improvement needs of the property for the year 2001. The amount budgeted is approximately $147,000, consisting primarily of water heater replacements, air conditioning unit replacement, appliances, and carpet and vinyl replacements. Additional improvements may be considered and will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property. Huntington Athletic Club Apartments During the six months ended June 30, 2001, the Partnership completed approximately $105,000 of budgeted and non-budgeted capital expenditures at Huntington Athletic Club Apartments consisting primarily of carpet replacements, structural improvements, and interior decoration. These improvements were funded from the Partnership's reserves. The Partnership has evaluated the capital improvement needs of the property for the year 2001. The amount budgeted is approximately $101,000, consisting primarily of air conditioning unit replacements and carpet and tile replacements. Additional improvements may be considered and will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property. The additional capital expenditures will be incurred only if cash is available from operations or from Partnership reserves. To the extent that such budgeted capital improvements are completed, the Registrant's distributable cash flow, if any, may be adversely affected at least in the short term. The Registrant's current assets are thought to be sufficient for any near-term needs (exclusive of capital improvements) of the Registrant. Huntington Athletic Club Apartment's mortgage indebtedness of approximately $7,219,000 is amortized over 20 years and matures June 1, 2020. The mortgage encumbering the Williamsburg on the Lake Apartments requires interest only payments with the principal balance of $7,400,000 due in November 2003. The Managing General Partner will attempt to refinance such indebtedness and/or sell Williamsburg on the Lake prior to such maturity date. If the property cannot be refinanced or sold for a sufficient amount, the Registrant may risk losing such property through foreclosure. During the six months ended June 30, 2001, the Registrant declared and paid distributions of approximately $425,000 (approximately $421,000 to the limited partners or $9.38 per limited partnership unit) from operations. Subsequent to June 30, 2001, the Registrant declared a distribution of approximately $215,000 (approximately $213,000 to the limited partners or $4.75 per limited partnership unit) from operations. During the six months ended June 30, 2000, the Registrant declared and paid distributions of approximately $4,355,000 (approximately $4,311,000 to the limited partners or $96.05 per limited partnership unit) consisting of approximately $1,177,000 (approximately $1,165,000 to the limited partners or $25.96 per limited partnership unit) from operations and approximately $3,178,000 (approximately $3,146,000 to the limited partners or $70.09 per limited partnership unit) from the refinancing proceeds of Huntington Athletic Club Apartments. Future cash distributions will depend on the levels of net cash generated from operations, the availability of cash reserves, and the timing of debt maturities, refinancings and/or property sales. The Registrant's distribution policy is reviewed on a quarterly basis. There can be no assurance, however, that the Registrant will generate sufficient funds from operations after required capital improvements to permit further distributions to its partners during the remainder of 2001 or subsequent periods. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its Managing General Partner and several of their affiliated partnerships and corporate entities. The action purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging, among other things, the acquisition of interests in certain general partner entities by Insignia Financial Group, Inc. ("Insignia") and entities which were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. The plaintiffs seek monetary damages and equitable relief, including judicial dissolution of the Partnership. On June 25, 1998, the Managing General Partner filed a motion seeking dismissal of the action. In lieu of responding to the motion, the plaintiffs filed an amended complaint. The Managing General Partner filed demurrers to the amended complaint which were heard February 1999. Pending the ruling on such demurrers, settlement negotiations commenced. On November 2, 1999, the parties executed and filed a Stipulation of Settlement, settling claims, subject to court approval, on behalf of the Partnership and all limited partners who owned units as of November 3, 1999. Preliminary approval of the settlement was obtained on November 3, 1999 from the Court, at which time the Court set a final approval hearing for December 10, 1999. Prior to the December 10, 1999 hearing, the Court received various objections to the settlement, including a challenge to the Court's preliminary approval based upon the alleged lack of authority of prior lead counsel to enter the settlement. On December 14, 1999, the Managing General Partner and its affiliates terminated the proposed settlement. In February 2000, counsel for some of the named plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated the settlement. On June 27, 2000, the Court entered an order disqualifying them from the case and an appeal was taken from the order on October 5, 2000. On December 4, 2000, the Court appointed the law firm of Lieff Cabraser Heimann & Bernstein LLP as new lead counsel for plaintiffs and the putative class. Plaintiffs filed a third amended complaint on January 19, 2001. On March 2, 2001, the Managing General Partner and its affiliates filed a demurrer to the third amended complaint. On May 14, 2001, the Court heard the demurrer to the third amended complaint. On July 10, 2001, the Court issued an order sustaining defendants' demurrer on certain grounds. Plaintiffs have until August 16, 2001 to file a fourth amended complaint. The Managing General Partner does not anticipate that any costs, whether legal or settlement costs, associated with this case will be material to the Partnership's overall operations. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: None. b) Reports on Form 8-K filed during the quarter ended June 30, 2001: None. 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. Its Managing General Partner By: /s/Patrick J. Foye Patrick J. Foye Executive Vice President By: /s/Martha L. Long Martha L. Long Senior Vice President and Controller Date: -----END PRIVACY-ENHANCED MESSAGE-----