FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter ended March 31, 1996
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Commission file number 0-14269
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SIERRA PACIFIC PENSION INVESTORS `84
(A LIMITED PARTNERSHIP)
State of California 33-0043952
- --------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5850 San Felipe, Suite 500
Houston, Texas 77057
- -------------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (713) 706-6271
-------------------------------------------------
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. Yes [X] . No[ ].
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following financial statements are submitted in the next pages:
Page
Number
Balance Sheets - March 31, 1996 and December 31, 1995 ...................... 4
Statements of Operations - for the Three Months Ended
March 31, 1996 and 1995 .................................................... 5
Statements of Changes in Partners' Equity -
From June 5, 1984 (inception of the Partnership) to
December 31, 1995 and for the Three Months Ended March 31, 1996 ............ 6
Statements of Cash Flows - for the Three Months
Ended March 31, 1996 and 1995 .............................................. 7
Notes to Financial Statements .............................................. 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(a) OVERVIEW
The following discussion should be read in conjunction with the Partnership's
Financial Statements and Notes thereto appearing elsewhere in this Form 10-Q.
The Partnership currently owns one property, Sierra Valencia. In addition, the
Partnership holds a 49% interest in Sierra Mira Mesa Partners ("SMMP").
(b) RESULTS OF OPERATIONS
Rental income remained constant for the first three months of 1996 when compared
to the same period in 1995 while operating expenses decreased $4,000, or 3%.
There has been little tenant turnover at the Property and occupancy rates have
remained constant. Interest income decreased $31,000, or 39%, due to a $1.3
million paydown on the underlying note receivable received in the third quarter
of 1995.
The Partnership's share of loss from investment in SMMP increased by $12,000.
The increase in losses generated by SMMP were principally due to its share of
losses from the Sorrento I Partners ("SIP") joint venture, which owns the
Sorrento I property. SMMP's ownership interest in SIP increased from 58.59% in
1995 to 75.06% in 1996 which contributed to the increase in losses recorded in
the current year.
2
(c) LIQUIDITY AND CAPITAL
The Partnership generated cash of $28,000 from operating activities during the
three months ended March 31, 1996. The Partnership is in a liquid position, with
current assets of $268,000 and current liabilities of $97,000. Cash of
$1,318,000 was received on the note receivable from the Sierra Spectrum Sale in
the third quarter of 1995 and a short-term advance was made to Sierra Mira Mesa
Partners in the amount of $1,300,000. The Partnership's primary capital
requirements will be for construction of new tenant space and compliance with
the Americans with Disabilities Act or other yet unknown changes in building
codes. The estimated costs of completing tenant improvements for vacant space is
approximately $100,000.
SIERRA PACIFIC PENSION INVESTORS '84
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995
March 31, December 31,
1996 1995
---------- ----------
ASSETS
Cash and cash equivalents .................. $ 190,784 $ 254,768
Receivables:
Note receivable, net of deferred
gain of $215,786....................... 1,697,739 1,697,739
Unbilled rent ........................... 69,641 76,462
Billed rent ............................. 13,740 7,139
Due from affiliates ..................... 1,292,300 1,300,000
Other receivables ....................... 63,784 38,894
Income-producing property - net of
accumulated depreciation and
valuation allowance of $3,302,911
and $3,238,741, respectively.............. 1,460,037 1,524,207
Investment in unconsolidated
joint venture ......................... 4,387,827 4,464,589
Other assets ............................... 120,275 132,982
---------- ----------
Total Assets ............................... $9,296,127 $9,496,780
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Accrued and other liabilities .............. $ 96,728 $ 80,247
---------- ----------
Total Liabilities .......................... 96,728 80,247
---------- ----------
Partners' equity:
General Partner .......................... 0 0
Limited Partners:
80,000 units authorized,
77,000 issued and
outstanding ................................ 9,199,399 9,416,533
---------- ----------
Total Partners' equity ..................... 9,199,399 9,416,533
---------- ----------
Total Liabilities and
Partners' equity .......................... $9,296,127 $9,496,780
========== ==========
UNAUDITED
SEE ACCOMPANYING NOTES
4
SIERRA PACIFIC PENSION INVESTORS '84
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND 1995
1996 1995
------------ ------------
REVENUES:
Rental income ............................ $ 102,843 $ 102,477
Interest income .......................... 48,924 80,000
--------- ---------
Total revenues ............. 151,767 182,477
--------- ---------
EXPENSES:
Operating expenses ....................... 117,404 121,102
Depreciation and
amortization ............................... 75,741 75,914
--------- ---------
Total costs and expenses ............. 193,145 197,016
--------- ---------
LOSS BEFORE PARTNERSHIP'S
SHARE OF
UNCONSOLIDATED JOINT
VENTURE LOSS ............................... (41,378) (14,539)
PARTNERSHIP'S SHARE OF
UNCONSOLIDATED
JOINT VENTURE LOSS ....................... (75,756) (64,001)
--------- ---------
NET LOSS ................................... $(117,134) $ (78,540)
========= =========
Net loss per limited
partnership unit ......................... $ (1.52) $ (1.02)
========= =========
UNAUDITED
SEE ACCOMPANYING NOTES
5
SIERRA PACIFIC PENSION INVESTORS '84
(A LIMITED PARTNERSHIP)
STATEMENTS OF CHANGES IN PARTNERS' EQUITY
FROM JUNE 5, 1984 (INCEPTION OF PARTNERSHIP) TO DECEMBER 31, 1995
AND FOR THE THREE MONTHS ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
Limited Partners
--------------------------- General Partners'
Per Unit Total Partner Equity
---------- ------------- ----------- ----------------
<S> <C> <C> <C>
Proceeds from sale of
partnership units ............................ $ 250.00 $ 19,418,250 -- $ 19,418,250
Underwriting commissions
and other organization
expenses ....................................... (37.34) (2,894,014) -- (2,894,014)
Repurchase of 665 partnership
units .......................................... (0.03) (151,621) -- (151,621)
Cumulative net income
(to December 31, 1995) ....................... (72.16) (5,556,076) $ 133,334 (5,422,742)
Cumulative distributions from
operations
(to December 31, 1995) ....................... (15.58) (1,200,006) (133,334) (1,333,340)
Cumulative distributions from
distribution of assets
(to December 31, 1995) ....................... (2.60) (200,000) 0 (200,000)
---------- ------------ --------- ------------
Partners' equity - January 1,
1996 ........................................... 122.29 9,416,533 0 9,416,533
Net loss ....................................... (1.52) (117,134) -- (117,134)
Distributions from
disposition of assets .......................... (1.30) (100,000) -- (100,000)
---------- ------------ --------- ------------
Partners' equity March 31,
1996 ........................................... $ 119.47 $ 9,199,399 $ 0 $ 9,199,399
========== ============ ========= ============
</TABLE>
UNAUDITED
SEE ACCOMPANYING NOTES
6
SIERRA PACIFIC PENSION INVESTORS '84
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
1996 1995
---------- -----------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss ................................. $(117,134) $ (78,540)
Adjustments to reconcile
net loss to cash
provided by (used in)
operating activities:
Depreciation and
amortization ............................... 75,741 75,914
Undistributed loss of
unconsolidated joint
venture .................................... 75,756 64,001
Decrease in rent
receivable ................................. 220 7,077
Increase in other
receivables ................................ (24,890) (8,151)
Decrease (increase) in
other assets ............................... 2,142 (56,232)
Increase (decrease) in
accrued and other liabilites ............... 16,481 (152,245)
--------- ---------
Net cash provided by
(used in) operating activities ............. 28,316 (148,176)
--------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Payments for property
additions .................................. 0 (14,533)
Capital contributions to
unconsolidated joint
venture .................................... 0 (178,850)
--------- ---------
Net cash used in investing
activities ................................. 0 (193,383)
--------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Payments from affiliate
of the General Partner ..................... 7,700 0
Cash distributions from
disposition of assets ...................... (100,000) 0
--------- ---------
Net cash used in
financing activities ....................... (92,300) 0
--------- ---------
NET DECREASE IN CASH AND
CASH EQUIVALENTS ........................ (63,984) (341,559)
CASH AND CASH EQUIVALENTS -
Beginning of period ........................ 254,768 342,978
--------- ---------
CASH AND CASH EQUIVALENTS -
End of period .............................. $ 190,784 $ 1,419
========= =========
UNAUDITED
SEE ACCOMPANYING NOTES
7
SIERRA PACIFIC PENSION INVESTORS `84
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF FINANCIAL STATEMENTS
In the opinion of the Partnership's management, these unaudited financial
statements reflect all adjustments which are necessary for a fair presentation
of its financial position at March 31, 1996 and results of operations and cash
flows for the periods presented. All adjustments included in these statements
are of a normal and recurring nature. These financial statements should be read
in conjunction with the financial statements and notes thereto contained in the
Annual Report of the Partnership for the year ended December 31, 1995.
2. RELATED PARTY TRANSACTIONS
In 1994, all of the common stock of S-P Properties, Inc., the General Partner of
the Partnership, was purchased by Finance Factors, Inc. from Carlsberg
Management Company ("CMC"). CMC continued to manage the affairs of the
Partnership through March 31, 1995.
Included in the financial statements for the three months ended March 31, 1996
and 1995 are affiliate transactions as follows:
March 31
--------------------------------
1996 1995
--------------- ----------------
Management fees $ 2,971 $ 0
Administrative fees $ 9,970 $ 0
Leasing fees $ 0 $ 0
3. INVESTMENT IN UNCONSOLIDATED JOINT VENTURE
Sierra Mira Mesa Partners ("SMMP") was formed in 1985 between the Partnership
and Sierra Pacific Development Fund II, an affiliate, to develop and operate the
real property known as Sierra Mira Mesa, an office building, located in San
Diego, California. At March 31, 1996 the Partnership's interest in SMMP was 49%;
the remaining 51% interest is owned by Sierra Pacific Development Fund II.
UNAUDITED
8
Summarized income statement information for SMMP for the three months ended
March 31, 1996 and 1995 follows:
March 31
--------------------------------
1996 1995
--------------- ----------------
Rental income $393,611 $379,574
Total revenues $442,655 $425,676
Operating expenses $170,724 $147,855
Share of unconsolidated
joint venture loss $ 93,138 $178,886
Net loss $154,604 $130,615
As of March 31, 1996, SMMP holds a 75.06% interest in Sorrento I Partners
("SIP"), a general partnership with Sierra Pacific Development Fund III formed
in 1993; a 27.23% interest in Sorrento II Partners ("SIIP"), a general
partnership with Sierra Pacific Institutional Properties V formed in 1993; a
27.38% interest in Sierra Creekside Partners ("SCP"), general partnership with
Sierra Pacific Development Fund formed in 1994; and a 38.57% interest in Sierra
Vista Partners ("SVP"), a general partnership with Sierra Pacific Development
Fund III formed in 1994.
Summarized income statement information for these Partnerships for the three
months ended March 31, 1996 and 1995 follows:
SIP SIIP
---------------------------- ------------------------------
March 31 March 31
---------------------------- ------------------------------
1996 1995 1996 1995
-------------- -------------- --------------- -------------
Rental income $ 0 $ 0 $ 239,522 $ 224,503
Total revenues $ 0 $ 0 $ 239,522 $ 224,503
Operating expenses $ 35,031 $ 68,122 $ 81,739 $ 113,308
Net loss $ 144,364 $ 176,989 $ 42,201 $ 86,211
SCP SVP
----------------------------- ----------------------------
March 31 March 31
----------------------------- ----------------------------
1996 1995 1996 1995
------------- --------------- -------------- -------------
Rental income $ 175,284 $ 132,009 $ 149,754 $ 181,509
Total revenues $ 180,329 $ 132,009 $ 149,754 $ 181,509
Operating expenses $ 103,410 $ 125,702 $ 104,276 $ 114,169
Net loss $ 78,128 $ 89,231 $ 156,148 $ 148,657
UNAUDITED
9
4. PARTNERS' EQUITY
Equity and net income (loss) per limited partnership unit is determined by
dividing the Limited Partners' share of the Partnership's equity and net income
(loss) by the number of limited partnership units outstanding, 77,000.
UNAUDITED
10
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The following Exhibits are filed herewith pursuant to Rule 601 of
Regulation S-K.
Exhibit
Number Description of Exhibit
- -------------- ------------------------------------------
27 Financial Data Schedule
(b) Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report be signed on its behalf by the
undersigned thereunto duly authorized.
SIERRA PACIFIC PENSION INVESTORS `84
a Limited Partnership
S-P PROPERTIES, INC.
General Partner
Date: MAY 13, 1996 /S/ THOMAS N. THURBER
Thomas N. Thurber
President and Director
Date: MAY 13, 1996 /S/ MICHELE E. JOHNSON
Michele E. Johnson
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM SIERRA PACIFIC PENSION INVESTORS '84 MARCH 31, 1996 FINANCIAL STATEMENTS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 190,784
<SECURITIES> 0
<RECEIVABLES> 83,381
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,560,608
<PP&E> 4,762,948
<DEPRECIATION> 3,302,911
<TOTAL-ASSETS> 9,296,127
<CURRENT-LIABILITIES> 96,728
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,199,399
<TOTAL-LIABILITY-AND-EQUITY> 9,296,127
<SALES> 102,843
<TOTAL-REVENUES> 151,767
<CGS> 0
<TOTAL-COSTS> 117,404
<OTHER-EXPENSES> 75,741
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (117,134)
<INCOME-TAX> 0
<INCOME-CONTINUING> (117,134)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (117,134)
<EPS-PRIMARY> (1.52)
<EPS-DILUTED> (1.52)
</TABLE>
