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, 1997
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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
incorporaton 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 [_].
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following financial statements are submitted in the next pages:
Page NUMBER
Balance Sheets - March 31, 1997 and December 31, 1996 4
Statements of Operations - for the Three Months Ended
March 31, 1997 and 1996 5
Statements of Changes in Partners' Equity - From June
5, 1984 (inception of the Partnership) to December 31,
1996 and for the Three Months Ended March 31, 1997 6
Statements of Cash Flows - for the Three Months
Ended March 31, 1997 and 1996 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 64.02% interest in Sierra Mira Mesa Partners ("SMMP").
(b) RESULTS OF OPERATIONS
Rental income for the first three months of the year increased by $22,000, or
22%, due to an increase in occupancy from 84% at March 31, 1996 to 100% at March
31, 1997. One new tenant, whose lease commenced April 1, 1996, accounted for an
increase in leased square footage of 10,021, or 12%, of the rentable square
footage of Sierra Valencia.
2
<PAGE>
Operating expenses decreased by $49,000, or 42%, as a result of lower accounting
and auditing fees incurred for the first three months of the year in comparision
to the corresponding period in the prior year, lower maintenance and repair
costs, and other expense cutting measures implemented by management.
Depreciation and amortization expenses decreased by $20,000, or 26%, due to the
discontinuance of depreciation on the building, which was fully depreciated in
1996.
The Partnership's share of loss from investment in SMMP was $66,000 for the
three months ended March 31, 1997 compared to $76,000 for the same period in
1996. This decrease in loss generated by SMMP was principally due to its share
of income from Sorrento I Partners ("SIP"), which owns the Sorrento I property.
SIP entered into a lease with a tenant for all of the square footage of the
Sorrento I property in May 1996.
(c) LIQUIDITY AND CAPITAL
In March 1997, the Partnership entered into a loan agreement in the amount of
$1,404,000. This loan is secured by the Sierra Valencia Property. The proceeds
of this loan will be used to fund a distribution to the limited partners and
make additional contributions to SMMP.
As of March 31, 1997, the Partnership is in a liquid position. Total cash and
billed receivables amount to $966,000 compared to $113,000 of accrued and other
liabilities. 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. It is
anticipated that these requirements will be funded from operations of the
Property.
3
<PAGE>
SIERRA PACIFIC PENSION INVESTORS '84
(A Limited Partnership)
BALANCE SHEETS
MARCH 31, 1997 AND DECEMBER 31, 1996
March 31, December 31,
1997 1996
----------- ----------
ASSETS
Cash and cash equivalents ............................. $ 946,091 $ 42,060
Receivables:
Note receivable, net of deferred gain of $215,786 .. 1,697,739 1,697,739
Unbilled rent ...................................... 68,510 76,575
Billed rent ........................................ 19,895 15,415
Due from Sierra Mira Mesa Partners ................. 458,000 1,311,300
Other .............................................. 159,461 159,461
Due from affiliates ................................... 47,466 47,466
Income-producing property - net of
accumulated depreciation and valuation
allowance of $3,419,240 and $3,374,933,
respectively ........................................ 1,389,470 1,428,765
Investment in unconsolidated joint venture ............ 5,859,913 4,616,117
Other assets .......................................... 265,954 115,595
----------- ----------
Total Assets .......................................... $10,912,499 $9,510,493
=========== ==========
LIABILITIES AND PARTNERS' EQUITY
Accrued and other liabilities ......................... $ 112,902 $ 96,351
Note payable .......................................... 1,404,000 0
----------- ----------
Total Liabilities ..................................... 1,516,902 96,351
----------- ----------
Partners' equity:
General Partner ..................................... 0 0
Limited Partners:
80,000 units authorized,
77,000 issued and outstanding ..................... 9,395,597 9,414,142
----------- ----------
Total Partners' equity ................................ 9,395,597 9,414,142
----------- ----------
Total Liabilities and Partners' equity ................ $10,912,499 $9,510,493
=========== ==========
Unaudited
See Accompanying Notes
4
<PAGE>
SIERRA PACIFIC PENSION INVESTORS '84
(A Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND DECEMBER 31, 1996
1997 1996
------------ ------------
REVENUES:
Rental income .............................. $ 125,337 $ 102,843
Interest income ............................ 48,457 48,924
------------ ------------
Total revenues .................... 173,794 151,767
------------ ------------
EXPENSES:
Operating expenses ......................... 68,115 117,404
Depreciation and amortization .............. 55,921 75,741
Interest expense ........................... 1,804 0
------------ ------------
Total costs and expenses .......... 125,840 193,145
------------ ------------
INCOME (LOSS) BEFORE PARTNERSHIP'S SHARE
OF JOINT VENTURE LOSS ...................... 47,954 (41,378)
PARTNERSHIP'S SHARE OF UNCONSOLIDATED
JOINT VENTURE LOSS ......................... (66,499) (75,756)
------------ ------------
NET LOSS ..................................... $ (18,545) $ (117,134)
============ ============
Net loss per limited partnership unit ........ $ (0.24) $ (1.52)
============ ============
Unaudited
See Accompanying Notes
5
<PAGE>
SIERRA PACIFIC PENSION INVESTORS '84
(A Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' EQUITY
FROM JUNE 5, 1984 (INCEPTION OF PARTNERSHIP) TO DECEMBER 31, 1996
AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
Limited Partners Total
--------------------------- General Partners'
Per Unit Total Partner Equity
------------ ------------ ------------ ------------
<S> <C> <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 (loss) income
(to December 31, 1996) .......... (69.59) (5,358,467) $ 133,334 (5,225,133)
Cumulative distributions
(to December 31, 1996) .......... (20.78) (1,600,006) (133,334) (1,733,340)
------------ ------------ ------------ ------------
Partners' equity - January 1, 1997 122.26 9,414,142 0 9,414,142
Net Loss ......................... (0.24) (18,545) (18,545)
------------ ------------ ------------ ------------
Partners' equity - March 31, 1997 . $ 122.02 $ 9,395,597 $ 0 $ 9,395,597
============ ============ ============ ============
</TABLE>
Unaudited
See Accompanying Notes
6
<PAGE>
SIERRA PACIFIC PENSION INVESTORS '84
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
1997 1996
----------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ......................................... $ (18,545) $(117,134)
Adjustments to reconcile net loss to cash
(used in) provided by operating activities:
Depreciation and amortization .................. 55,921 75,741
Undistributed loss of unconsolidated
joint venture ................................ 66,499 75,756
Decrease in rent receivable .................... 3,585 220
Increase in other receivables .................. 0 (24,890)
(Increase) decrease in other assets ............ (160,968) 2,142
Increase in accrued and other liabilites ....... 16,551 16,481
----------- ---------
Net cash (used in) provided
by operating activities ...................... (36,957) 28,316
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for property additions ................ (5,012) 0
Capital contributions to unconsolidated
joint venture ................................ (1,311,300) 0
----------- ---------
Net cash used in investing activities .......... (1,316,312) 0
----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Funding of note payable secured by property .... 1,404,000 0
Repayment of loans to affiliate ................ 1,311,300 0
Loan to affiliate .............................. (458,000) 7,700
Cash distributions ............................. 0 (100,000)
----------- ---------
Net cash provided by (used in)
financing activities ......................... 2,257,300 (92,300)
----------- ---------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS ............................ 904,031 (63,984)
CASH AND CASH EQUIVALENTS - Beginning of period .... 42,060 254,768
----------- ---------
CASH AND CASH EQUIVALENTS - End of period .......... $ 946,091 $ 190,784
=========== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for interest ....... $ 1,804 $ 0
=========== =========
Unaudited
See Accompanying Notes
7
<PAGE>
SIERRA PACIFIC PENSION INVESTORS '84
(A LIMITED PARTNERSHIP)
NOTES TO 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, 1997 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, 1996.
2. RELATED PARTY TRANSACTIONS
In 1994, all of the common stock of TCP, Inc. was purchased by Finance Factors,
Inc. from Carlsberg Management Company ("CMC"). TCP, Inc. owns all of the common
stock of S-P Properties, Inc., the General Partner of the Partnership. CMC
continued to manage the affairs of the Partnership through June 30, 1995.
Included in the financial statements for the three months ended March 31, 1997
and 1996 are affiliate transactions as follows:
March 31
------------------
1997 1996
-------- --------
Management fees ................... $ 5,536 $ 2,971
Administrative fees ............... 12,810 9,970
Construction supervision fees ..... 5,012 0
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, 1997 the Partnership's interest in SMMP was
64.02%; the remaining 35.98% interest is owned by Sierra Pacific Development
Fund II.
UNAUDITED
8
<PAGE>
Sierra Pacific Pension Investors '84
Notes to Financial Statements
Page two
The consolidated financial statements of SMMP include the accounts of SMMP and
Sorrento I Partners, a majority owned California general partnership. Summarized
income statement information for SMMP for the three months ended March 31, 1997
and 1996 follows:
March 31
------------------
1997 1996
-------- --------
Rental income ..................... $481,365 $393,611
Total revenues .................... 523,937 442,655
Operating expenses ................ 167,018 170,724
Share of unconsolidated
joint venture loss .............. 134,559 93,138
Net loss .......................... 103,873 154,604
As of March 31, 1997, SMMP holds a 24.91% interest in Sorrento II Partners
("SIIP"), a California general partnership with Sierra Pacific Institutional
Properties V formed in 1993; a 4.96% interest in Sierra Creekside Partners
("SCP"), a California general partnership with Sierra Pacific Development Fund
formed in 1994; and a 47.05% interest in Sierra Vista Partners ("SVP"), a
California general partnership with Sierra Pacific Development Fund III formed
in 1994.
Summarized income statement information for these Partnerships, which are
accounted for by SMMP under the equity method, for the three months ended March
31, 1997 and 1996 follows:
SIIP
------------------
March 31
------------------
1997 1996
-------- --------
Rental income ..................... $275,936 $239,522
Total revenues .................... 275,936 239,522
Operating expenses ................ 80,271 81,739
Net loss .......................... 12,056 42,201
UNAUDITED
9
<PAGE>
Sierra Pacific Pension Investors '84
Notes to Financial Statements
Page three
SCP SVP
--------------------------------------
March 31 March 31
------------------ ------------------
1997 1996 1997 1996
-------- -------- -------- --------
Rental income ........... $177,225 $175,284 $141,806 $149,754
Total revenues .......... 177,225 180,329 141,806 149,754
Operating expenses ...... 114,522 103,410 111,210 104,276
Net loss ................ 101,608 78,128 268,897 156,148
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
<PAGE>
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 14, 1997 /s/ THOMAS N. THURBER
Thomas N. Thurber
President and Director
Date: MAY 14, 1997 /s/ MICHELE E. JOHNSON
Michele E. Johnson
Chief Accounting Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FIANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
SIERRA PACIFIC PENSION INVESTORS '84 MARCH 31, 1997 FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 946,091
<SECURITIES> 0
<RECEIVABLES> 247,866
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,630,913
<PP&E> 4,808,710
<DEPRECIATION> 3,419,240
<TOTAL-ASSETS> 10,912,499
<CURRENT-LIABILITIES> 112,902
<BONDS> 1,404,000
0
0
<COMMON> 0
<OTHER-SE> 9,395,597
<TOTAL-LIABILITY-AND-EQUITY> 10,912,499
<SALES> 125,337
<TOTAL-REVENUES> 173,794
<CGS> 0
<TOTAL-COSTS> 68,115
<OTHER-EXPENSES> 55,921
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,804
<INCOME-PRETAX> (18,545)
<INCOME-TAX> 0
<INCOME-CONTINUING> (18,545)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (18,545)
<EPS-PRIMARY> (0.24)
<EPS-DILUTED> (0.24)
</TABLE>
