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 September 30, 1996
Commission file number 0-15702
SIERRA PACIFIC INSTITUTIONAL PROPERTIES V
(A LIMITED PARTNERSHIP)
State of California 33-0122424
- -------------------------------------------- --------------------------
(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 [ ].
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following financial statements are submitted in the next pages:
Page
number
------
Consolidated Balance Sheets - September 30, 1996 and December 31, 1995 .... 4
Consolidated Statements of Operations - For the Nine Months
Ended September 30, 1996 and 1995 and the Three Months Ended
September 30, 1996 and 1995 ............................................... 5
Consolidated Statement of Changes in Partners' Equity - from
October 8, 1985 (Inception of the Partnership) to December 31,
1995 and for the Nine Months Ended September 30, 1996 ..................... 6
Consolidated Statements of Cash Flows - For the Nine
Months Ended September 30, 1996 and 1995 .................................. 7
Notes to Consolidated 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
Consolidated Financial Statements and Notes thereto appearing elsewhere in this
Form 10-Q.
The Partnership currently owns a 73.08% interest in the Sorrento II Partnership,
which operates the Sorrento II property in San Diego, California.
2
<PAGE>
(b) RESULTS OF OPERATIONS
Revenues for the first nine months of the year increased by $77,000, or 11%, due
to the occupancy of additional space by the property's largest tenant in July
1995. Operating expenses for the same period decreased $20,000, or 7%, in
comparison to the same period in 1995 due to lower administrative costs and
other expense cutting measures implemented by management. Additionally, property
tax expense decreased in comparison to the same periods in 1995 due to appeal
costs incurred in the prior year. No such costs were incurred in 1996. For the
quarter ended September 30, operating expenses increased $6,000, or 8%, when
compared to the corresponding period in the prior year. This increase is
primarily due to the costs of making repairs that were deferred in the prior
year. These costs are partially offset by reduced insurance costs resulting from
enrollment of the property in a national insurance program sponsored by an
affiliate of the general partner. Depreciation and amortization increased
$24,000, or 8%, due to increased depreciation expenses on tenant improvements
associated with the expansion of tenant space.
(c) LIQUIDITY AND CAPITAL RESOURCES
The Partnership is in an illiquid position at September 30, 1996 with cash of
$6,000 and current liabilities of $226,000. On October 1, 1993, the Partnership
created a general partnership (Sorrento II Partners) with Sierra Mira Mesa
Partners ("SMMP"), an affiliate, to facilitate cash contributions by SMMP for
the continued development and operation of the Sorrento II property. SMMP has
adequate resources to make any necessary advances during the foreseeable future.
3
<PAGE>
SIERRA PACIFIC INSTITUTIONAL PROPERTIES V
(A Limited Partnership)
CONSOLIDATED BALANCE SHEETS
September 30, 1996 and December 31, 1995
September 30, December 31,
1996 1995
---------- ----------
ASSETS
Cash and cash equivalents ........................ $ 6,090 $ 66,933
Receivables:
Unbilled rent .................................. 470,892 401,333
Billed rent .................................... 0 0
Income-producing property - net of
accumulated depreciation of $1,900,116
and $1,606,003, respectively .................. 6,066,566 6,332,709
Other assets ..................................... 448,205 329,194
---------- ----------
Total Assets ..................................... $6,991,753 $7,130,169
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Accrued and other liabilities .................... $ 226,274 $ 215,837
---------- ----------
Total Liabilities ................................ 226,274 215,837
---------- ----------
Ground lessor's equity in income-
producing property ............................. 3,000,000 3,000,000
---------- ----------
Minority interest in consolidated
joint venture ................................. 1,246,825 1,286,896
---------- ----------
Partners' equity:
General Partner ................................ 0 0
Limited Partners:
140,000 units authorized,
30,777 issued and
outstanding ............................... 2,518,654 2,627,436
---------- ----------
Total Partners' equity ........................... 2,518,654 2,627,436
---------- ----------
Total Liabilities and Partners' equity .......... $6,991,753 $7,130,169
========== ==========
Unaudited
See Accompanying Notes
4
<PAGE>
SIERRA PACIFIC INSTITUTIONAL PROPERTIES V
(A Limited Partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 1996 and 1995
and for the Three Months Ended September 30, 1996 and 1995
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
---------------------- ----------------------
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
REVENUES:
Rental income ..................... $ 748,770 $ 671,973 $ 242,132 $ 211,706
Interest income ................... 0 166 0 50
--------- --------- --------- ---------
Total Revenues .................. 748,770 672,139 242,132 211,756
--------- --------- --------- ---------
EXPENSES:
Operating expenses .............. 275,159 294,754 77,195 71,480
Ground lease .................... 286,875 286,875 95,625 91,250
Depreciation and amortization ... 335,589 311,446 111,864 107,886
--------- --------- --------- ---------
Total costs and expenses ............ 897,623 893,075 284,684 270,616
--------- --------- --------- ---------
LOSS BEFORE MINORITY INTEREST'S SHARE
OF CONSOLIDATED JOINT VENTURE LOSS (148,853) (220,936) (42,552) (58,860)
--------- --------- --------- ---------
MINORITY INTEREST'S SHARE OF
CONSOLIDATED JOINT VENTURE LOSS ... 40,071 44,430 11,455 11,836
--------- --------- --------- ---------
NET LOSS ............................ $(108,782) $(176,506) $ (31,097) $ (47,024)
========= ========= ========= =========
Net loss per limited partnership unit $ (3.53) $ (5.73) $ (1.01) $ (1.53)
========= ========= ========= =========
</TABLE>
Unaudited
See Accompanying Notes
5
<PAGE>
SIERRA PACIFIC INSTITUTIONAL PROPERTIES V
(A Limited Partnership)
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
From October 8, 1985 (Inception of Partnership) to December 31, 1995
and for the Nine Months Ended September 30, 1996
<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 $ 7,694,250 -- $ 7,694,250
Underwriting commissions
and other organization expenses ...... (37.21) (1,145,333) -- (1,145,333)
Cumulative net income (loss)
(to December 31, 1995) .............. (124.73) (3,838,720) $ 9,193 (3,829,527)
Cumulative distributions from operations
(to December 31, 1995) .............. (2.69) (82,761) (9,193) (91,954)
------- ----------- ------- -----------
Partners' equity - January 1, 1996 .... 85.37 2,627,436 0 2,627,436
Net loss - year to date ................ (3.53) (108,782) -- (108,782)
------- ----------- ------- -----------
Partners' equity - September 30, 1996 . $ 81.84 $ 2,518,654 $ 0 $ 2,518,654
======= =========== ======= ===========
</TABLE>
Unaudited
See Accompanying Notes
6
<PAGE>
SIERRA PACIFIC INSTITUTIONAL PROPERTIES V
(A Limited Partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1996 and 1995
1996 1995
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ....................................... $(108,782) $(176,506)
Adjustments to reconcile net loss
to cash used in operating activities:
Depreciation and amortization ................ 335,589 311,446
Minority interest's share of consolidated
joint venture loss ......................... (40,071) (44,430)
Increase in rent receivable .................. (69,559) (135,989)
Decrease in other receivables ................ 0 31,958
Increase in other assets ..................... (160,486) (148,709)
Increase in accrued and other liabilities .... 10,437 30,530
--------- ---------
Net cash used in operating activities ........ (32,872) (131,700)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for property additions ................ (27,971) (277,846)
--------- ---------
Net cash used in investing activities .......... (27,971) (277,846)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Contributions from minority investor ........... 0 465,400
--------- ---------
Net cash provided by financing activities ........ 0 465,400
--------- ---------
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS ........................ (60,843) 55,854
CASH AND CASH EQUIVALENTS -
Beginning of period ........................... 66,933 2,815
--------- ---------
CASH AND CASH EQUIVALENTS -
End of period ................................. $ 6,090 $ 58,669
========= =========
Unaudited
See Accompanying Notes
7
<PAGE>
SIERRA PACIFIC INSTITUTIONAL PROPERTIES V
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------
1. ORGANIZATION
In October 1993, the Partnership created a general partnership (Sorrento II
Partners) with Sierra Mira Mesa Partners("SMMP") to facilitate cash
contributions by SMMP for the continued development and operation of the
Sorrento II property. The Partnership Agreement of Sorrento II Partners (the
"Agreement") was amended effective January 1, 1995 to consider both
contributions and distributions when calculating each partners' percentage
interest at January 1 of each year as called for by the Agreement. As a result
of this Amendment, the Partnership's percentage interest in Sorrento II Partners
increased from 72.77% to 73.08%. The effect of this change on the minority
interest share of consolidated joint venture loss for the three months ended
March 31, 1996 was recognized in the second quarter.
2. BASIS OF FINANCIAL STATEMENTS
The accompanying unaudited consolidated condensed financial statements include
the accounts of the Partnership and Sorrento II Partners, a majority owned joint
venture at September 30, 1996. All significant intercompany balances and
transactions have been eliminated in consolidation.
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 September 30, 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.
3. 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.
Unaudited
8
<PAGE>
Sierra Pacific Institutional Properties V
Notes to Financial Statements
Included in the financial statements for the nine months ended September 30,
1996 and 1995 are affiliate transactions as follows:
September 30
--------------------------
1996 1995
------------- ------------
Management fees $ 40,667 $ 21,439
Administrative fees 52,535 32,304
Leasing fees 0 0
4. PARTNERS' EQUITY
Equity and net loss per limited partnership unit is determined by dividing the
Limited Partners' share of the Partnership's equity and net loss by the number
of limited partnership units outstanding, 30,077.
Unaudited
9
<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: NOVEMBER 11, 1996 /S/ THOMAS N. THURBER
Thomas N. Thurber
President and Director
Date: NOVEMBER 11, 1996 /S/ MICHELE E. JOHNSON
Michele E. Johnson
Chief Accounting Officer
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM SIERRA PACIFIC INSTITUTIONAL PROPERTIES V SEPTEMBER 30, 1996 FINANCIAL
STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 6,090
<SECURITIES> 0
<RECEIVABLES> 470,892
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,090
<PP&E> 7,966,682
<DEPRECIATION> 1,900,116
<TOTAL-ASSETS> 6,991,753
<CURRENT-LIABILITIES> 226,274
<BONDS> 3,000,000
0
0
<COMMON> 0
<OTHER-SE> 2,518,654
<TOTAL-LIABILITY-AND-EQUITY> 6,991,753
<SALES> 748,770
<TOTAL-REVENUES> 748,770
<CGS> 0
<TOTAL-COSTS> 562,034
<OTHER-EXPENSES> 335,589
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (108,782)
<INCOME-TAX> 0
<INCOME-CONTINUING> (108,782)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (108,782)
<EPS-PRIMARY> (3.53)
<EPS-DILUTED> (3.53)
</TABLE>
