SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549


FORM 10-Q – QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934


(Mark One)
[x]Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2012March 31, 2013

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:0-8952

SB PARTNERS
(Exact name of registrant as specified in its charter)
New York
13-6294787
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
1 New Haven Avenue, Box 3, Suite 102A, Milford, CT.06460
(Address of principal executive offices)
(Zip Code)

(203) 283-9593
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report.)





Indicate by check mark whether the registrant (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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  [X] Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  [ X  ] Yes   [  ] No


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See definitions of “large"large accelerated filer”filer", “accelerated filer”"accelerated filer", “non-accelerated filer”"non-accelerated filer" and “small"small reporting company” incompany".in Rule 12b-2 of the Exchange Act.
[ ] large accelerated filer                                                      [ ] accelerated filer                                           [X] non-accelerated filer                                           [ ] small reporting company
[ ] large accelerated filer[ ] accelerated filer[X] non-accelerated filer[ ] small reporting company

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). [ ] Yes  [X] No


APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  [ ] Yes [ ] No
Not Applicable

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Not Applicable




SB PARTNERS

INDEX

Part IFinancial Information
Item 1
Financial Statements
 
Consolidated Balance Sheets as of September 30, 2012March 31, 2013 (unaudited) and December 31, 20112012 (audited)
1
Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30,March 31, 2013 and 2012 and 20112
Consolidated Statements of Changes in Partners' Deficit (unaudited) for the ninethree months ended September 30,March 31, 2013 and 20123
Consolidated Statements of Cash Flows (unaudited) for the ninethree months ended September 30,March 31, 2013 and 2012 and 20114
Notes to Consolidated Financial Statements (unaudited)5 – 7
Item 2Management's Discussion and Analysis of Financial Condition and Results of Operations8 – 109
Item 3Quantitative and Qualitative Disclosures about Market Risk1110
Item 4TControls and Procedures1110
Part IIOther Information10
Signatures11
Signatures12
Exhibit 3112-13
13-14
 
Exhibit 321514





1
ITEM 1. FINANCIAL STATEMENTS
SB PARTNERS
(A New York Limited Partnership)
CONSOLIDATED BALANCE SHEETS



    September 30,  December 31, 
    2012  2011 
    (Unaudited)  (Audited) 
         
Assets:        
   Investments -      
 Real estate, at cost      
      Land $1,985,000  $1,985,000 
      Buildings, furnishings and improvements  18,581,164   18,581,164 
      Less - accumulated depreciation  (3,808,245)  (3,437,522)
     16,757,919   17,128,642 
           
 Investment in Sentinel Omaha, LLC, net of reserve        
 for fair value of $0 and $3,346,444 at        
 September 30, 2012 and December 31, 2011, respectively  -   - 
     16,757,919   17,128,642 
           
   Other Assets -        
 Cash and cash equivalents  281,898   313,717 
 Cash in escrow  500,034   500,034 
 Other   212,712   259,405 
           
  Total assets $17,752,563  $18,201,798 
           
Liabilities:         
 Mortgage note and unsecured loan payable $19,983,464  $20,069,570 
 Accounts payable  172,989   251,024 
 Tenant security deposits  109,627   109,627 
 Accrued expenses  1,037,767   462,959 
           
  Total liabilities  21,303,847   20,893,180 
           
Partners' Deficit:        
 Units of partnership interest without par value;        
 Limited partner - 7,753 units  (3,532,390)  (2,672,599)
 General partner - 1 unit  (18,894)  (18,783)
           
  Total partners' deficit  (3,551,284)  (2,691,382)
           
  Total liabilities and partners' deficit $17,752,563  $18,201,798 
           
See notes to consolidated financial statements        













2
SB PARTNERS
(A New York Limited Partnership)

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)



   For the Three Months  For the Nine Months 
   Ended September 30,  Ended September 30, 
   2012  2011  2012  2011 
Revenues:             
Base rental income $442,128  $437,904  $1,323,568  $1,310,997 
Other rental income  125,050   185,354   526,306   556,659 
Interest on short-term investments and other  9   14   31   30,109 
                  
       Total revenues   567,187   623,272   1,849,905   1,897,765 
                  
Expenses:                 
Real estate operating expenses  118,460   133,768   338,325   350,917 
Interest on mortgage notes and unsecured loan payable  272,566   273,667   816,540   814,624 
Depreciation and amortization  137,596   140,392   412,788   394,383 
Real estate taxes  80,446   129,068   378,546   387,420 
Management fees  234,914   209,220   644,108   566,947 
Other   41,432   62,616   119,500   131,695 
                  
Total expenses  885,414   948,731   2,709,807   2,645,986 
                  
Loss from operations  (318,227)  (325,459)  (859,902)  (748,221)
                  
Equity in net income (loss) of investment  (5,487,608)  213,029   (3,346,444)  4,296,914 
                  
Reserve for value of investment  5,487,608   (213,029)  3,346,444   (4,296,914)
                  
Loss from continuing operations  (318,227)  (325,459)  (859,902)  (748,221)
                  
Loss from discontinued operations  -   -   -   (2,305)
                  
Net loss  (318,227)  (325,459)  (859,902)  (750,526)
                  
Loss allocated to general partner  (41)  (42)  (111)  (97)
                  
Loss allocated to limited partners $(318,186) $(325,417) $(859,791) $(750,429)
                  
(Loss) earnings per unit of limited partnership interest                
(basic and diluted)                
                  
Continuing operations $(41.05) $(41.97) $(110.91) $(96.51)
                  
Discontinued operations $-  $-  $-  $(0.30)
                  
Net loss $(41.05) $(41.98) $(110.91) $(96.80)
                  
Weighted Average Number of Units of Limited                
   Partnership Interest Outstanding  7,753   7,753   7,753   7,753 
                  
See notes to consolidated financial statements                





3
SB PARTNERS
(A New York Limited Partnership)

CONSOLIDATED BALANCE SHEETS

 
March 31, 2013
(Unaudited)
December 31, 2012
(Audited)
 
 
 
Assets:
 
 
Investments -
 
 
Real estate, at cost
 
 
Land $            1,985,000 $            1,985,000
Buildings, furnishings and improvements18,648,00918,581,164
Less - accumulated depreciation(4,054,076)(3,931,815)
 
16,578,93316,634,349
 
 
 
Investment in Sentinel Omaha, LLC, net of reserve for fair value of $2,207,401 and $0 at March 31, 2013 and December 31, 2012, respectively––
 
16,578,93316,634,349
 
 
 
Other Assets -
 
 
Cash and cash equivalents400,260402,874
Cash in escrow500,084500,084
Other176,415202,806
 
 
 
Total assets $          17,655,692 $          17,740,113
 
 
 
Liabilities:
 
 
Mortgage note and unsecured loan payable $          19,983,464 $          19,983,464
Accounts payable240,507238,811
Tenant security deposits112,425112,425
Accrued expenses1,388,8561,202,188
 
 
 
Total liabilities21,725,25221,536,888
 
 
 
Partners' Deficit:
 
 
Units of partnership interest without par value;
 
 
Limited partner - 7,753 units(4,050,599)(3,777,849)
General partner - 1 unit(18,961)(18,926)
 
 
 
Total partners' deficit(4,069,560)(3,796,775)
 
 
 
Total liabilities and partners' deficit $          17,655,692 $          17,740,113

See notes to consolidated financial statements

SB PARTNERS
(A New York Limited Partnership)

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

 
For the Three Months Ended March 31,
 
20132012
Revenues:
 
 
Base rental income $               443,637 $               439,312
Other rental income179,443200,628
Interest on short-term investments and other712
 
 
 
Total revenues623,087639,952
 
 
 
Expenses:
 
 
Real estate operating expenses112,275104,744
Interest on mortgage notes and unsecured loan payable269,793272,268
Depreciation and amortization136,283137,596
Real estate taxes127,867149,051
Management fees213,604213,645
Other36,05043,169
 
 
 
Total expenses895,872920,473
 
 
 
Loss from operations(272,785)(280,521)
 
 
 
Equity in net income of investment2,207,4013,292,398
 
 
 
Reserve for value of investment(2,207,401)(3,292,398)
 
 
 
Net loss(272,785)(280,521)
 
 
 
Loss allocated to general partner(35)(36)
 
 
 
Loss allocated to limited partners $              (272,750) $              (280,485)
 
 
 
(Loss) earnings per unit of limited partnership interest (basic and diluted)
 
 
 
 
 
Net loss $                  (35.18) $                  (36.18)
 
 
 
Weighted Average Number of Units of Limited Partnership Interest Outstanding7,753                      7,753

See notes to consolidated financial statements

SB PARTNERS
(A New York Limited Partnership)

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
For the NineThree Months Ended September 30, 2012March 31, 2013 (Unaudited)



Limited Partners:               
  Units of Partnership Interest          
                
  Number  Amount  Cumulative Cash Distributions Accumulated Earnings (Losses) Total 
                
Balance, January 1, 2012  7,753  $119,968,973  $(111,721,586) $(10,919,986) $(2,672,599)
Net loss for the period  -   -   -   (859,791)  (859,791)
Balance, September 30, 2012  7,753  $119,968,973  $(111,721,586) $(11,779,777) $(3,532,390)
                     
General Partner:                    
  Units of Partnership Interest             
                     
  Number  Amount  Cumulative Cash Distributions Accumulated Earnings (Losses) Total 
                     
Balance, January 1, 2012  1  $10,000  $(26,364) $(2,419) $(18,783)
Net loss for the period  -   -   -   (111)  (111)
Balance, September 30, 2012  1  $10,000  $(26,364) $(2,530) $(18,894)
                     
                     
See notes to consolidated financial statements.             


Limited Partners:
 
 
 
 
 
 
 
 
 
 
 
 
Units of Partnership Interest
 
 
 
 
NumberAmountCumulative Cash DistributionsAccumulated (Losses)Total
 
 
 
 
 
 
Balance, January 1, 20137,753$    119,968,973$      (111,721,586)$       (12,025,236)$      (3,777,849)
Net loss for the period000(272,750)(272,750)
Balance, March 31, 20137,753$    119,968,973 $    (111,721,586) $      (12,297,986)$        (4,050,599)
 
 
 
 
 
 
General Partner:
 
 
 
 
 
 
Units of Partnership Interest
 
 
 
 
 
 
 
 
 
 
NumberAmountCumulative Cash DistributionsAccumulated (Losses)Total
 
 
 
 
 
 
Balance, January 1, 20131$       10,000$             (26,364)$               (2,562)$          (18,926)
Net loss for the period 000(35)(35)
Balance, March 31, 20131$       10,000 $             (26,364)$               (2,597)$          (18,961)






















See notes to consolidated financial statements.

4
SB PARTNERS
(A New York Limited Partnership)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)



  For the Nine Months Ended September 30, 
  2012  2011 
       
Cash Flows From Operating Activities:      
  Net loss $(859,902) $(750,526)
Adjustments to reconcile net loss to net cash        
provided by (used in) operating activities:        
Equity in net loss (income) of investment  3,346,444   (4,296,914)
Reserve for fair value of investment  (3,346,444)  4,296,914 
Depreciation and amortization  412,788   394,383 
Net decrease (increase) in operating assets  4,628   (122,073)
Net (decrease) increase in accounts payable  (78,035)  420,760 
Net increase in accrued expenses  574,808   - 
         
Net cash provided by (used in) operating activites  54,287   (57,456)
         
Cash Flows From Investing Activities:        
Payment to capital reserve escrow account  -   (500,000)
         
Net cash used in investing activites  -   (500,000)
         
Cash Flows From Financing Activities:        
Repayment of unsecured loan payable  (86,106)  (11,930,430)
Payment of deferred financing cost  -   (230,746)
         
Net cash used in financing activities  (86,106)  (12,161,176)
         
Net change in cash and cash equivalents  (31,819)  (12,718,632)
         
Cash and cash equivalents at beginning of period  313,717   12,932,100 
         
Cash and cash equivalents at end of period $281,898  $213,468 
         
Supplemental disclosure of cash flow information:        
Cash paid during the year for interest $588,207  $687,124 
         
See notes to consolidated financial statements        


 
For the Three Months Ended March 31,
 
20132012
 
 
 
Cash Flows From Operating Activities:
 
 
Net loss $              (272,785) $              (280,521)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
Equity in net income of investment(2,207,401)(3,292,398)
Reserve for fair value of investment2,207,4013,292,398
Depreciation and amortization136,283137,596
Net decrease (increase) in operating assets12,369(100,669)
Net increase in accounts payable1,696116,778
Net increase in accrued expenses186,668187,500
 
 
 
Net cash provided by operating activites64,23160,684
 
 
 
Cash Flows From Investing Activities:
 
 
Capital additions to real estate owned(66,845)–
 
 
 
Net cash used in investing activites(66,845)–
 
 
 
Net change in cash and cash equivalents(2,614)60,684
 
 
 
Cash and cash equivalents at beginning of year402,874313,717
 
 
 
Cash and cash equivalents at end of year $               400,260 $               374,401
 
 
 
Supplemental disclosure of cash flow information:
 
 
Cash paid during the year for interest $               194,793 $               196,435












See notes to consolidated financial statements

5

SB PARTNERS
Notes to Consolidated Financial Statements (Unaudited)

(1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
SB Partners, a New York limited partnership, and its subsidiaries (collectively, the "Partnership" or the “Registrant”"Registrant"), have been engaged since April 1971 in acquiring, operating, and holding for investment a varying portfolio of real estate interests.  SB Partners Real Estate Corporation (the "General Partner") serves as the general partner of the Partnership.

The consolidated financial statements included herein are unaudited; however, the information reflects all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary to a fair presentation of the financial position, results of operations and cash flows for the interim periods.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading.  It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Partnership’sPartnership's latest annual report on Form 10-K.

The results of operations for the three month period ended September 30, 2012March 31, 2013 are not necessarily indicative of the results to be expected for a full year.

For a discussion of the significant accounting and financial reporting policies of the Partnership, refer to the Annual Report on Form 10–K for the year ended December 31, 2011.  Certain December 31, 2011 balances have been reclassified to conform to the September 30, 2012 presentation.2012.

(2) INVESTMENTS IN REAL ESTATE
As of September 30, 2012, the Partnership owns an industrial flex property in Maple Grove, Minnesota and a warehouse distribution center in Lino Lakes, Minnesota.  The following is the cost basis and accumulated depreciation of the real estate investments owned by the Partnership at September 30, 2012 and December 31, 2011:
As of March 31, 2013, the Partnership owns an industrial flex property in Maple Grove, Minnesota and a warehouse distribution center in Lino Lakes, Minnesota.  The following is the cost basis and accumulated depreciation of the real estate investments owned by the Partnership at March 31, 2013 and December 31, 2012:

 
No. ofYear of
 
Real Estate at Cost
TypeProp.AcquisitionDescription3/31/201312/31/2012
 
 
 
 
 
 
Industrial flex property1200260,345 sf $     5,336,973 $     5,270,128
 
 
 
 
 
 
Warehouse distribution properties12005226,000 sf15,296,03615,296,036
 
 
 
 
 
 
Total cost
 
 
 
20,633,00920,566,164
 
 
 
 
 
 
Less: Accumulated depreciation
 
 
 
(4,054,076)(3,931,815)
 
 
 
 
 
 
Investment in real estate
 
 
 
 $   16,578,933 $   16,634,349


  No. of Year of   Real Estate at Cost 
Type Prop. Acquisition Description 9/30/2012 12/31/2011
           
Industrial flex property 1 2002 60,345 sf  $     5,270,128  $     5,270,128
           
Warehouse distribution properties 1 2005 226,000 sf       15,296,036       15,296,036
           
Total cost             20,566,164       20,566,164
           
Less: Accumulated depreciation              (3,808,245)        (3,437,522)
           
Investment in real estate        $   16,757,919  $   17,128,642





6

(3)    INVESTMENT IN SENTINEL OMAHA, LLC
In 2007, the Partnership made an investment in the amount of $37,200,000 in Sentinel Omaha, LLC (“Omaha”("Omaha").  Omaha is a real estate investment company which as of September 30, 2012March 31, 2013 owns 2018 multifamily properties in 1311 markets.  Omaha is an affiliate of the Registrant’sRegistrant's general partner.  The investment represents a 30% ownership interest in Omaha.

The following are the condensed financial statements (000’s(000's omitted) of Omaha as of and for the periods ended September 30, 2012March 31, 2013 and December 31, 2011.2012.

 
Balance Sheet
(Unaudited)
March 31, 2013
(Audited)
December 31, 2012
 
 
 
Investment in real estate, net$280,130$302,900
Other assets5,2647,056
Debt(274,168)(305,623)
Other liabilities(3,868)(5,512)
Member's equity (deficit)$7,358($1,179)
 
 
 
 
(Unaudited)
 
Statement of OperationsMarch 31, 2013
 
 
 
 
Rent and other income$10,399
 
Real estate operating expenses(5,445)
 
Other income and expenses(3,565)
 
Net realized loss(18,113)
 
Net unrealized income25,261
 
 
 
 
Net income$8,537
 


  (Unaudited)  (Audited) 
Balance Sheet September 30, 2012  December 31, 2011 
       
Investment in real estate, net $277,900  $321,600 
Other assets  7,874   17,595 
Debt  (295,613)  (320,144)
Other liabilities  (5,417)  (7,896)
Member's equity (deficit) $(15,256) $11,155 
         
  (Unaudited)     
Statement of Operations September 30, 2012     
         
Rent and other income $31,620     
Real estate operating expenses  (16,585)    
Other income and expenses  (11,338)    
Net unrealized loss  (25,535)    
Realized loss on sale of real estate property  (4,573)    
         
Net loss $(26,411)    



(4) MORTGAGE NOTES AND UNSECURED LOAN PAYABLE
Mortgage notes and unsecured loan payable consist of the following non-recourse first liens:



                  
      Annual      Net Carrying Amount 
  Interest   Installment   Amount Due  September 30,  December 31, 
Property Rate Maturity Date Payments   at Maturity  2012  2011 
                  
                  
Lino Lakes  5.800%October, 2015 $580,000 (a) $10,000,000  $10,000,000  $10,000,000 
                       
Bank Loan (b):                      
Note A                3,983,464   4,069,570 
Note B                6,000,000   6,000,000 
                       
                $19,983,464  $20,069,570 


 
 
 
Annual
 
Net Carrying Amount
 
Interest
 
InstallmentAmount DueMarch 31,December 31,
PropertyRateMaturity DatePaymentsat Maturity20132012
 
 
 
 
 
 
 
Lino Lakes5.800%October, 2015 $     580,000 (a) $ 10,000,000 $ 10,000,000 $ 10,000,000
 
 
 
 
 
 
 
Bank Loan (b):
 
 
 
 
 
 
Note A
 
 
 
 
      3,983,4643,983,464
Note B
 
 
 
 
6,000,0006,000,000
 
 
 
 
 
 
 
 
 
 
 
 
 $ 19,983,464 $ 19,983,464



(a)Annual installment payments include interest only.
(b)On September 17, 2007, the Partnership entered into a bank loan (the “Loan”"Loan") with a bank (“Holder”("Holder") in the amount of $22,000,000, which matured on October 1, 2008 and provided for interest only monthly payments based upon LIBOR plus 1.95% and had entered into discussions as to terms for extending the debt on a longer term basis. On April 29, 2011, the Partnership and Holder executed the new loan agreement (“("Loan Agreement”Agreement") on the following terms:

1)In connection with the execution of the Loan Agreement, the Partnership was required to make an immediate payment to Holder of $11,930,430, reducing the balance due under the unsecured credit facility to $10,069,570.  The payment was made from proceeds resulting from the sale of 175 Ambassador Drive.  Additional proceeds from the sale were used to pay Holder’sHolder's legal and appraisal costs and to fund a reserve account for future tenant improvement and leasing costs, as needed.   The remaining outstanding obligation in the amount of $10,069,570 was divided into two notes (“("Note A”A" and “Note"Note B;”" together, the “Notes”"Notes").


7

2)Note A in the amount of $3,983,464$4,069,570 has a maturity of July 31, 2014.  The Partnership has two 1-year options to extend the maturity if certain conditions are satisfied.  Note A requires monthly payments of accrued interest at an annual fixed rate of 5% until paid in full.  If extended, the Partnership is required to make an additional fixed principal payment of $9,570 on April 1, 2015 and $30,000 monthly thereafter until paid in full.

3)Note B in the amount of $6,000,000 has a maturity date of April 29, 2018.  The Partnership has three 1-year options to extend the maturity date if certain conditions are satisfied.  Note B accrues interest at an annual fixed rate of 5% but only until all interest and principal have been paid in full on Note A.  Total deferred interest as of September 30, 2012 and December 31, 2011 is $432,500 and $204,167, respectively.  Thereafter Note B does not accrue any interest.  Payments of interest and principal are deferred until Registrant’sRegistrant's investment in Sentinel Omaha LLC (“Omaha”("Omaha") pays distributions to the Partnership.  Distributions from Omaha would be used first to pay accrued interest on the Note B obligation, then principal on the Note B obligation.  If there are no distributions from Omaha prior to the Note B maturity, all interest and principal is due at maturity, subject to the above mentioned extensions. As of March 31, 2013 and December 31, 2012, $584,167 and $509,167, respectively of Note B interest has been accrued and is included in accrued expenses on the balance sheet.

4)The Notes may be voluntarily prepaid upon notice to the Holder, subject to certain requirements as to the application of payments. The Partnership’sPartnership's obligations under the Notes may be accelerated upon default.

5)Until the Partnership’sPartnership's obligations under the Notes are satisfied in full, the Partnership is required to pay a portion of its net operating income (after payment of certain permitted expenses), and the net proceeds from the sale, transfer or refinancing of its remaining properties and investments, toward the Notes while retaining the other portion to increase cash reserves. On May 15, 2012, the Partnership paid $86,106 to the Holder to pay down a portion of the outstanding balance of Note A.  The proceeds represented excess net operating income, as defined, for the year ended April 30, 2012.  While the obligations under the Notes are outstanding the Partnership is precluded from making distributions to its partners.

6)The Partnership, its general partner and the Holder also entered into a Management Subordination Agreement accruing a portion of the investment management fee payable by the Partnership to its general partner so long as the Notes remain outstanding.  As of September 30, 2012March 31, 2013 and December 31, 2011, $605,2682012, $799,598 and $258,792,$693,020, respectively of investment management fees have been accrued and are included in accrued expenses on the balance sheet.

7)  As additional security for the Partnership’s payment of its obligations under the Loan Agreement, its wholly-owned subsidiary, Eagle IV Realty, LLC, has executed a Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement (“Eagle IV Security Agreement”) and a Pledge Agreement (“Eagle IV Pledge Agreement”) in favor of Holder.  The Eagle IV Security Agreement provides Holder with a security interest in the Partnership’s property located in Maple Grove, Minnesota (“Eagle IV”) of up to $5,000,000.  The Eagle IV Pledge Agreement pledges to Holder the Partnership’s membership interest in Eagle IV Realty, LLC, the direct owner of Eagle IV.   The Partnership has no other debt obligation secured by Eagle IV.  The Loan Agreement also provides for a negative pledge on the Partnership’sAs additional security for the Partnership's payment of its obligations under the Loan Agreement, the Partnership, through its wholly-owned subsidiary Eagle IV Realty, LLC, has executed a Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement ("Eagle IV Security Agreement") and a Pledge Agreement ("Eagle IV Pledge Agreement") in favor of  Holder.  The Eagle IV Security Agreement provides Holder with a security interest on the Partnership's property located in Maple Grove, Minnesota ("Eagle IV") of up to $5,000,000.  The Eagle IV Pledge Agreement pledges to Holder the Partnership's membership interest in Eagle IV Realty, LLC, the direct owner of Eagle IV.   The Partnership has no other debt obligation secured by Eagle IV.  The Loan Agreement also provides for a negative pledge on the Partnership's remaining properties and investments.



8

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,MARCH 31, 2013 AND 2012 AND 2011

General

  The consolidated financial statements for the three and nine months ended September 30,March 31, 2013 and 2012 and 2011 reflect the operations of one industrial flex property and one warehouse distribution center as well as a 30% interest in Omaha.

Registrant's wholly owned property located in Lino Lakes, Minnesota is 100% leased to a single tenant until September 30, 2017.  The tenant's base rent is fixed and there are no increases scheduled during the initial lease period.  The tenant has two options to renew its lease for five years each at a yet undetermined market rate.  Tenant either pays directly or reimburses Registrant for all utilities, real estate taxes, insurance and most of the property operating expenses and property management fees.  Registrant's wholly owned property located in Maple Grove, Minnesota is 100% leased to a single tenant until July 31, 2015.  The tenant pays fixed base rent which increases 3% each year.  The tenant has no renewal options available.  The tenant pays directly or reimburses Registrant for all utilities, real estate taxes, insurance and most of the property operating expenses and property management fees.  Sentinel Omaha LLC's portfolio consists of 17 garden apartment properties and one high rise apartment property.  Leases generally are for one year or less.  Tenants generally pay fixed rent plus utilities used by tenant.

Results of Operations

Total revenues from operations for the three months ended September 30, 2012March 31, 2013 decreased $56,000$17,000 to approximately $567,000$623,000 as compared to approximately $623,000$640,000 for the three months ended September 30, 2011.March 31, 2012.  Total revenues decreased due to decreases in other rental income partially offset by an increase in base rental income.  OtherBase rental income decreased $60,000increased $5,000 to approximately $125,000$444,000 for the three months ended September 30, 2012March 31, 2013 as compared to the same period in 2011 due to lower net expense reimbursement from the tenants at Registrant’s two wholly owned properties.  Base rental income increased $4,000 to approximately $442,000 for the three months as compared to the same period in 20112012 due to a scheduled increase in base rent at Registrant’sRegistrant's property located in Maple Grove, MN.

 Total revenues from operations for the nine months ended September 30, 2012  Other income decreased $48,000$22,000 to approximately $1,850,000 as compared to approximately $1,898,000 for the nine months ended September 30, 2011.  Total revenues decreased due to a decrease in other rental income and a decrease in interest income partially offset by an increase in base rental income. Other rental income decreased $31,000 due to lower net expense reimbursement from the tenant at Registrant’s property located in Maple Grove, MM.  Interest income decreased due to a decrease in Registrant’s cash reserves.  Base rental income increased $13,000 due to a scheduled increase in base rent at Registrant’s property located in Maple Grove, MN.

Net loss from continuing operations decreased $7,000 to approximately $318,000$179,000 for the three months ended September 30,March 31, 2013 from approximately $201,000 for the same period in 2012 due to lower expense reimbursement from the tenants at Registrant's two wholly owned properties.

Net loss from operations decreased $8,000 to a loss of approximately $273,000 for the three months ended March 31, 2013, as compared to an approximate loss of $325,000$281,000 for the three months ended September 30, 2011March 31, 2012 due to a decrease in operating expenses partially offset by athe aforementioned decrease in revenues.  Total expenses from continuing operations for the three months ended September 30, 2012,March 31, 2013, decreased $64,000$24,000 to approximately $885,000$896,000 from approximately $949,000$920,000 for the three months ended September 30, 2011.March 31, 2012.  Total operating expenses decreased due to lower real estate taxes and professional fees andpartially offset by higher real estate operating expenses.  Real estate taxes weretax accrued was lower at Registrant's property located in Maple Grove, MN due to a lower assessmenttax assessment.  Real estate tax accrued was lower at Registrant’sRegistrant's property located in Lino Lakes, MN.MN due to a lower tax rate. Professional fees were lowerdecreased due to lower auditdecreases in legal and accounting fees.  Real estate operating expenses decreased due to lower repairs and maintenance expenses at Registrant’s property located in Maple Grove.

Net loss from continuing operations increased $112,000 to approximately $860,000 for the nine months ended September 30, 2012, as compared to an approximate loss of $748,000 for the nine months ended September 30, 2011 due to an increase in operating expenses combined with a decrease in revenues.  Total expenses from continuing operations increased $64,000 to approximately $2,710,000 as compared to the same period in 2011.  Total operating expenses increased due to higher investment management fees and amortization expense.  Investment management fees were higher due to the higher fee rate applied to the cash reserves after the reserves were reinvested when they were used to pay down the unsecured credit facility in 2011.  Amortization expense increased due to an increase in deferred finance costs related to the new loan agreement.repairs and utilities expenses at Registrant's Maple Grove property.

The Registrant has a 30% non-controlling interest in Omaha that is accounted for aton a fair value.  Thevalue basis. Due to the mortgage crisis, stagnant nationalreal estate market and slowing economy, hadOmaha reported a write-down of the value of its real estate portfolio of approximately $114,452,000 (-21%) during 2008 to 2011.  During 2012, capitalization rates for older properties in tertiary markets where Omaha owns most of its properties showed little improvement.  For 2012 Omaha reported a decrease in value of $6,000,000 (-2%) due to significant declines in value in markets where the properties' occupancy rates were negatively affected primarily by deployments of troops from nearby military bases.  Omaha reported a negative effect on rental apartment operationsequity balance as of December 31, 2012 due to the additional loss in value of its real estate properties during 2009 and early 2010.  During2012.  For 2012, Registrant's share of the latter halfnet loss from Omaha exceeded Registrant's remaining unreserved equity investment as of 2010 and 2011, mostDecember 31, 2011.  Registrant recorded the loss for 2012 only to the extent the unreserved equity investment was reduced to zero leaving an unrecognized loss of Omaha’s marketsapproximately $354,000.  For the quarter ended March 31, 2013, Omaha reported improved although slow job growth and lower unemployment. On April 14, 2010, Omaha executed the fourth amendment to its unsecured loan whichnet income of approximately $8,537,000.  Registrant's share was approximately $2,561,000.  However, Registrant reduced the blended interest rate onnet income reported from Omaha for the loanunrecognized loss of approximately $354,000 from LIBOR plus 585 basis points to LIBOR plus 386 basis points as of February 1, 2010.  Additionally,2012.  Under the maturity dateterms of the unsecured loan was extended from May 31, 2011 to May 31, 2012 with an option for an additional one year extension at which time exit fees are to be paid on a portion of any remaining balance of the unsecured loan.  On May 11, 2012, the holder of the unsecured loan extended the maturity date to May 31, 2013. However, Omaha remainssigned effective July 1, 2009, Omaha is precluded from making distributions to its investors until its unsecured loan is paid in full.  In addition, Omaha has certain mortgage maturities due inpaid.  As a result of the next 12 months which are secured by certain of Omaha’s properties. If Omaha does not have funds sufficient to repay these mortgages at maturity, Omaha may need to refinance such indebtedness with new debt financing.  Omaha may be unable to obtain loans sufficient to retire the existing loans. If it is unable to refinance these mortgages on acceptable terms, Omaha may be forced to dispose of properties upon disadvantageous terms.  If prevailing interest rates are higher at a time when Omaha must refinance its indebtedness, Omaha's interest expense could increase. Omaha considered these factors when it reviewed the fair value of its portfolio and reduced the equity value dramatically during the quarter ended September 30, 2012.aforementioned, Registrant does not anticipate receiving any distributions from Omaha during the foreseeable future and has reserved 100% of the reported value of its investment in Omaha on itsthe balance sheet. Forsheet as of March 31, 2013.  As of May 11, 2012, the nine months endedmaturity date of the unsecured loan was extended to May 31, 2013. On September 30, 2012, Registrant’s loss2013, Omaha executed a modification and extension of its unsecured loan to December 31, 2017.  The modification and extension, among other items, requires Omaha to make specific periodic principal payments on the unsecured loan at scheduled dates through December 31, 2017. It has also reduced the pay rate on a portion of the unsecured loan to a float rate of 200 basis points over LIBOR while increasing the accrual rate on the same portion of the unsecured loan to 500 basis points over LIBOR.  However, the aforementioned accrued interest will be forgiven each time Omaha pays the above mentioned required principal payment timely, as defined in equitythe loan agreement. However, Omaha is still precluded from making distributions to its investmentinvestors until its unsecured loan is paid in Omaha, including $7,660,400 of net unrealized loss, was  $7,923,969.  The loss in equity for the quarter ended September 30, 2012 brought the Registrant’s value in its investment to below zero. The reserve for value was adjusted in conjunction with recording the loss from equity for the quarter ended September 30, 2012 but only to the extent that the investment was reduced to zero.  Registrant reported a net zero income from equity in investment in Omaha for the quarter ended September 30, 2012.

full.
For additional analysis, please refer to the discussions of the individual properties below.

9
This report on Form 10-Q includes statements that constitute "forward looking statements" within the meaning of Section 27(A) of the

9
Securities Act of 1933 and Section 21(E) of the Securities Exchange Act of 1934 and that are intended to come within the safe harbor protection provided by those sections. By their nature, all forward looking statements involve risks and uncertainties as further described in the Registrant’sRegistrant's latest annual report on Form 10-K.  Actual results may differ materially from those contemplated by the forward looking statements.

CRITICAL ACCOUNTING POLICIES

The Registrant’sRegistrant's critical accounting policies are described in its Annual Report on Form 10-K for the year ended December 31, 2011.2012. There were no significant changes to such policies in 2012.2013. There are no accounting pronouncements or interpretations that have been issued, but not yet adopted, that Registrant believes will have a material impact on its consolidated financial statements.

Liquidity and Capital Resources

As of September 30, 2012,March 31, 2013, the Registrant had cash and cash equivalents of approximately $282,000.$400,000. These balances are approximately $32,000$3,000 lower than cash and cash equivalents held on December 31, 2011.2012. Cash and cash equivalents decreased during the ninethree months ended September 30, 2012March 31, 2013 due to the payment made to the Holder of the unsecured loan to partially pay down Note A partially offset by cash flow generated from operating activities at Registrant’sRegistrant's two wholly owned properties.properties which was used to pay interest on Registrant's loan and partnership expenses.

Currently Registrant's only source of cash is rental income received from the two tenants who lease 100% of the leasable space at Registrant's two wholly owned properties.  The tenants either pay directly or reimburse Registrant for the real estate taxes, insurance and most of the properties' operating expenses leaving a significant portion of the base rent received available to pay property debt service, current debt service on Registrant's Note A, capital improvements and partnership administrative expenses.  A portion of any remaining annual cash flow is used to pay down the principal balance of Note A in accordance with the Loan Agreement while the remainder cash income is retained by Registrant as cash reserves.  As part of Registrant and the Holder restructuring the Unsecured Debt in 2011, Registrant set aside $500,000 in escrow to be held and used only to pay the costs to release the space at either of Registrant's wholly owned properties if one or both of Registrant's tenants default on their lease.

Total outstanding debt at September 30, 2012March 31, 2013 consisted of $10,000,000 of a long-term non-recourse first mortgage note secured by real estate owned by the Registrant due in October 2015 and $9,983,464 under a loan agreement with a bank.  The loan agreement consists of Note A in the amount of $3,983,464 which matures July 2014 and Note B in the amount of $6,000,000 which matures April 2018. In accordanceMany borrowers are still finding it difficult to secure debt at acceptable terms as lenders have imposed stricter terms on borrowers. If the Registrant does not have funds sufficient to repay its indebtedness at maturity, the Registrant may need to refinance such indebtedness with new debt financing or through equity offerings.  The Registrant may be restricted from obtaining a loan which will be sufficient to retire the existing loan and which may be based on lower debt service coverage. If it is unable to refinance this indebtedness on acceptable terms, the Registrant may be forced to dispose of properties upon disadvantageous terms, which could result in losses to the new Loan AgreementRegistrant and adversely affect the amount of cash reserves.  If prevailing interest on Note Brates or general economic conditions result in higher interest rates at a time when the Registrant must refinance its indebtedness, the Registrant's interest expense could increase, which would adversely affect the Registrant's results of operations and financial condition.  Further, to the extent the Registrant's properties are mortgaged to secure payment of indebtedness and the Registrant is deferred until Registrant’s investment in Omaha pays distributions.  Total deferred interest asunable to meet the mortgage payments, mortgagee could foreclose or otherwise transfer the property, with a consequent loss of September 30, 2012income and December 31, 2011 is $432,500 and $204,167, respectively, and is included in accrued expenses onasset value to the balance sheet.  Also, a portion of the investment management fee payable by Registrant to its general partner is deferred so long as the Notes remain outstanding.  As of September 30, 2012, $605,268 of investment management fees have been accrued and are included in accrued expenses on the balance sheet.Registrant.  The Registrant has no other debt except normal trade accounts payable.payable, accrued interest on mortgage notes payable and accrued investment management fees.

Inflation and changing prices during the current period did not significantly affect the markets in which the Registrant conducts its business, or the Registrant's business overall. However the real estate market continues to suffer through one of its worst debt crises.  Somesome borrowers still find it difficult to secure debt at acceptable terms as lenders have imposed stricter terms on borrowers.

The Registrant’sRegistrant's properties are expected to generate sufficient cash flow to cover operating and capital improvement costs and other working capital requirements of the Registrant for the foreseeable future. Cash in escrow on the balance sheet in the amount of $500,034 represents cash held by the Holder to pay for leasing costs and tenant improvement costs at Registrant’s two wholly owned properties.  The funds are only to be used to procure a new tenant if one of the existing tenants vacates the property through either expiration of the existing lease or default.


Eagle Lake Business Center IV (Maple Grove, Minnesota)

Total revenues for the three months ended September 30, 2012 decreased $12,000 toMarch 31, 2013 was approximately $215,000 from$220,000 which was approximately $227,000the same for the three months ended September 30, 2011 due to lower other rental income partially offset byMarch 31, 2012.  The property reported higher base rental income offset by lower other income.  Base rental income was higher in 20122013 as the tenant received a scheduled rent increase. Other income was lower due to a decrease in operating expense reimbursements from the tenant.  Net income, which includes deductions for depreciation, increased $5,000decreased $7,000 for the three months ended September 30, 2012March 31, 2013 to approximately $117,000$104,000 from approximately $112,000$111,000 for the same period in 2011three months ended March 31, 2012 due primarily to lowerhigher operating expenses partially offset by lower total revenues.expenses.  Operating expenses were lowerhigher due to lower real estate taxeshigher repair and repairs and maintenanceutilities costs.

Total revenues for the nine months ended September 30, 2012 decreased $21,000 to approximately $658,000 from approximately $679,000 for the nine months ended September 30, 2011 due to lower other rental income partially offset by higher base rental income.  Base rental income was higher in 2012 as the tenant received a scheduled rent increase. Other rental income was lower due to a decrease in operating expense reimbursements from the tenant.  Net income, which includes deductions for depreciation, increased $23,000 for the nine months ended September 30, 2012 to approximately $344,000 from approximately $321,000 for the same period in 2011 due primarily to lower operating expenses partially offset by lower total revenues.  Operating expenses were lower due to lower real estate taxes and lower repairs and maintenance expenses.

435 Park Court (Lino Lakes, Minnesota)

Total revenues for the three months ended September 30, 2012March 31, 2013 decreased $43,000$17,000 to approximately $352,000$403,000 as compared to approximately $395,000$420,000 for the three months ended September 30, 2011.March 31, 2012.  Total revenues were lower due to lower real estate tax expense reimbursement from the tenant.  Net income, which includes deductions for interest expense and depreciation, decreased $3,000was approximately $50,000 for the three months ended September 30, 2012 toMarch 31, 2013 which was approximately $39,000the same as compared to approximately $42,000 for the three months ended September 30, 2011.  Net income decreased primarily due tosame period in 2012.  The property reported lower total revenues
10
operating expenses partially offset by lower total operating expenses.revenues.  Operating expense decreased due to lower real estate taxes.tax expense.

10
Total revenues for the nine months ended September 30, 2012 increased $6,000 to approximately $1,192,000 as compared to approximately $1,186,000 for the nine months ended September 30, 2011.  Total revenues were higher due to higher real estate tax expense reimbursement from the tenant.  Net income, which includes deductions for interest expense and depreciation, decreased $7,000 for the nine months ended September 30, 2012 to approximately $129,000 as compared to approximately $136,000 for the nine months ended September 30, 2011.  Net income decreased primarily due to higher operating expenses partially offset by higher total revenues.  Operating expense increased due to higher real estate taxes, insurance and project administration costs.

Investment in Sentinel Omaha, LLC

During 2007, the Registrant acquired a 30% interest in Sentinel Omaha, LLC for $37,200,000.  During the nine months ended September 30, 2012, Omaha sold one multifamily property located in Tampa, FL to further reduce its debt obligations.  As of September 30, 2012, the Omaha portfolio consisted of 20 multi-family properties located in 13 markets.

Comparison of three months ended September 30, 2012 to September 30, 2011:

Total revenues for the three months ended September 30, 2012March 31, 2013 were approximately $10,456,000.$10,399,000.  Income before net unrealizedrealized loss and realized loss on sale of real estate propertynet unrealized income was approximately $1,270,000.$1,389,000.  Major expenses included approximately $3,573,000$3,381,000 for interest expense, $1,130,000$873,000 for repairs and maintenance, $1,365,000$1,550,000 for payroll and $1,034,000$1,099,000 for real estate taxes. Revenues and operating expenses decreased from 2011 to 2012 primarily due to the sales by Omaha of two apartment properties in December 2011 and one in April 2012.  Omaha reported net unrealizedrealized loss of $18,113,000 and net unrealized income of approximately $34,817,000 for the three months ended September 30, 2012.$25,261,000 resulting in net income of approximately $8,537,000.  For the three months ended September 30, 2012,March 31, 2013, the Registrant’sRegistrant's equity interest in the net lossincome of Omaha was approximately $10,064,000.  The loss in equity$2,561,000.  However, Registrant reduced the net income reported from Omaha for the quarter ended September 30, 2012 brought the Registrant’s value in its investment to below zero. However,unrecognized loss of approximately $354,000 from 2012.  Registrant continues to reserve 100% of the reported value of Omaha on its balance sheet.  The reserve for value was adjusted in conjunction with recording the loss from equity income for the quarter ended September 30, 2012 but only to the extent that the investment was reduced to zero.March 31, 2013.  As a result, Registrant reported a net zero lossincome from equity in investment in Omaha for the quarter ended September 30, 2012.March 31, 2013.  As of March 31, 2013, the Omaha portfolio consisted of 18 multi-family properties located in 11 markets.

Total revenues for the three months ended September 30, 2011March 31, 2012 were approximately $11,662,000.  Net investment income$10,769,000.  Income before deductions for net unrealized lossincome was approximately $1,131,000.$1,543,000.  Major expenses included approximately $3,952,000$3,716,000 for interest expense, $1,294,000$804,000 for repairs and maintenance, $1,754,000$1,641,000 for payroll and $1,125,000$1,123,000 for real estate taxes. Omaha reported a net unrealized lossincome of approximately $421,000 from the valuation$9,432,000 resulting in net income of its real estate properties, its mortgage notes and bonds and its interest rate cap and swap agreements.approximately $10,975,000.  For the three months ended September 30, 2011,March 31, 2012, the Registrant’sRegistrant's equity interest in the income of Omaha was approximately $213,000.

Comparison of nine months ended September 30, 2012 to September 30, 2011:$3,292,000.

Total revenues for the nine months ended September 30, 2012 were approximately $31,620,000.  Income before net unrealized loss and realized loss on sale of real estate property was $3,697,000. Major expenses included approximately $10,991,000 for interest expense, $2,981,000 for repairs and maintenance, $4,568,000 for payroll and $3,220,000 for real estate taxes.  Omaha reported a realized loss from the sale of one apartment property of $4,573,000.  Omaha reported net unrealized loss of approximately $25,535,000.  For the nine months ended September 30, 2012, the Registrant’s equity interest in the net loss of Omaha was approximately $7,923,000.  However, Registrant continues to reserve 100% of the reported value of Omaha on its balance sheet.  The reserve for value was adjusted in conjunction with recording the loss from equity for the quarter ended September 30, 2012 but only to the extent that the investment was reduced to zero.  Registrant reported a net zero loss from equity in investment in Omaha for the nine months ended September 30, 2012.

Total revenues for the nine months ended September 30, 2011 were approximately $34,323,000.  Income before deductions for realized and unrealized income was approximately $2,988,000.  Major expenses included approximately $11,818,000 for interest expense, $3,535,000 for repairs and maintenance, $4,989,000 for payroll and $3,520,000 for real estate taxes. Revenues and operating expenses decreased from 2011 to 2012 primarily due to the sales by Omaha of two apartment properties in December 2011 and one in April 2012.   Omaha reported a realized loss on a fair value basis from the sale of one apartment property of $2,484,000.  Omaha also reported net unrealized income of approximately $13,819,000 from the valuation of its real estate properties, its mortgage notes and bonds and its interest rate cap and swap agreements.  For the nine months ended September 30, 2011, the Registrant’s equity interest in the income of Omaha was approximately $4,297,000.




11

ITEM 3.

None

ITEM 4.
CONTROLS AND PROCEDURES

(a)The Chief Executive Officer and the Principal Accounting & Financial Officer of the general partner of SB Partners have evaluated the disclosure controls and procedures relating to the Registrant’sRegistrant's Quarterly Report on Form 10-Q for the period ended September 30, 2012March 31, 2013 as filed with the Securities and Exchange Commission and have judged such controls and procedures to be effective.

(b)The Chief Executive Officer and the Principal Accounting and Financial Officer of the general partner of SB Partners have evaluated the internal control over financial reporting relating to the Registrant’sRegistrant's Quarterly Report on form 10-Q for the period ended September 30, 2012March 31, 2013 and have identified no changes in the Registrant’sRegistrant's internal controls that have materially affected or are reasonably likely to materially affect the Registrant’sRegistrant's internal controls over financial reporting.


PART II – OTHER INFORMATION

ITEM 6.
EXHIBITS

Exhibit No.Description

31.1Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002











12
SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


SB PARTNERS
(Registrant)
By:SB PARTNERS REAL ESTATE CORPORATION
General Partner
Dated: November 13, 2012December 16, 2013By:/s/ David Weiner
David Weiner
Chief Executive Officer
Principal Financial & Accounting Officer
Dated: November 13, 2012December 16, 2013By:/s/ John H. Zoeller
John H. Zoeller
Chief Financial Officer