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
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 Identification Number)
incorporation or organization)
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 - March 31, 1997 and December 31, 1996 4
Consolidated Statements of Operations - For the Three Months Ended
March 31, 1997 and 1996 5
Consolidated Statement of Changes in Partners' Equity -
from October 8, 1985 (Inception of the Partnership) to
December 31, 1996 and for the Three Months Ended March 31, 1997 6
Consolidated Statements of Cash Flows - For the Three Months Ended
March 31, 1997 and 1996 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 75.09% 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 three months of the year increased by $36,000, or 15%,
principally as a result of the billing of common area maintenance fees in March
1997. These fees were not billed until the second quarter in 1996. Operating
expenses remained relatively unchanged for the same period decreasing $1,000, or
2%. Accounting and auditing expenses decreased as a result of additional costs
incurred in the corresponding period in 1996. This decrease was partially offset
by an increase in maintenance and repair costs for the period.
(c) LIQUIDITY AND CAPITAL RESOURCES
The Partnership is in an illiquid position at March 31, 1997 with cash and
billed rents of $89,000 and current liabilities of $274,000. 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
March 31, 1997 and December 31, 1996
March 31, 1997 December 31, 1996
---------- ----------
ASSETS
Cash and cash equivalents .................. $ 36,559 $ 8,578
Receivables:
Unbilled rent ............................ 501,047 489,965
Billed rent .............................. 52,866 0
Due from affiliates ........................ 48,595 18,995
Income-producing property - net of
accumulated depreciation of $2,096,192
and $1,998,154, respectively ............. 5,919,369 5,992,435
Other assets ............................... 242,015 275,860
---------- ----------
Total Assets ............................... $6,800,451 $6,785,833
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Accrued and other liabilities .............. $ 274,240 $ 247,566
---------- ----------
Total Liabilities .......................... 274,240 247,566
---------- ----------
Ground lessor's equity in income-
producing property ....................... 3,000,000 3,000,000
---------- ----------
Minority interest in consolidated
joint venture ........................... 1,075,960 1,078,963
---------- ----------
Partners' equity:
General Partner .......................... 0 0
Limited Partners:
140,000 units authorized,
30,777 issued and
outstanding .............................. 2,450,251 2,459,304
---------- ----------
Total Partners' equity ..................... 2,450,251 2,459,304
---------- ----------
Total Liabilities and Partners' equity .... $6,800,451 $6,785,833
========== ==========
Unaudited
See Accompanying Notes
4
<PAGE>
SIERRA PACIFIC INSTITUTIONAL PROPERTIES V
(A Limited Partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 1997 and 1996
1997 1996
--------- ---------
REVENUES:
Rental income .................................... $ 275,936 $ 239,522
--------- ---------
Total revenues ................. 275,936 239,522
--------- ---------
EXPENSES:
Operating expenses ............................. 80,271 81,739
Ground lease ................................... 95,858 88,125
Depreciation and amortization .................. 111,863 111,859
--------- ---------
Total costs and expenses ....... 287,992 281,723
--------- ---------
LOSS BEFORE MINORITY INTEREST'S SHARE
OF CONSOLIDATED JOINT VENTURE LOSS ............... (12,056) (42,201)
--------- ---------
MINORITY INTEREST'S SHARE OF
CONSOLIDATED JOINT VENTURE LOSS .................. 3,003 11,491
--------- ---------
NET LOSS ........................................... $ (9,053) $ (30,710)
========= =========
Net loss per limited partnership unit .............. $ (0.29) $ (1.00)
========= =========
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, 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 $ 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, 1996) ........................... (130.19) (4,006,852) $ 9,193 (3,997,659)
Cumulative distributions
(to December 31, 1996) ........................... (2.69) (82,761) (9,193) (91,954)
------- ----------- ------- -----------
Partners' equity - January 1, 1997 ................. 79.91 2,459,304 0 2,459,304
Net loss ........................................... (0.29) (9,053) (9,053)
------- ----------- ------- -----------
Partners' equity - March 31, 1997 .................. $ 79.62 $ 2,450,251 $ 0 $ 2,450,251
======= =========== ======= ===========
</TABLE>
Unaudited
See Accompanying Notes
6
<PAGE>
SIERRA PACIFIC INSTITUTIONAL PROPERTIES V
(A Limited Partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1997 and 1996
1997 1996
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ............................................. $ (9,053) $ (30,710)
Adjustments to reconcile net loss
to cash provided by operating activities:
Depreciation and amortization ...................... 111,863 111,859
Minority interest's share of consolidated
joint venture loss ............................... (3,003) (11,491)
Increase in rent receivable ........................ (63,948) (33,008)
Decrease in other assets ........................... 20,020 19,032
Increase (decrease) in accrued and other liabilities 26,674 (32,642)
--------- ---------
Net cash provided by operating activities .......... 82,553 23,040
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for property additions .................... (24,972) 0
--------- ---------
Net cash used in investing activities .............. (24,972) 0
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan to affiliate .................................. (29,600) 0
--------- ---------
Net cash used in financing activities .............. (29,600) 0
--------- ---------
NET INCREASE IN CASH
AND CASH EQUIVALENTS ............................... 27,981 23,040
CASH AND CASH EQUIVALENTS -
Beginning of period ................................ 8,578 66,933
--------- ---------
CASH AND CASH EQUIVALENTS -
End of period ...................................... $ 36,559 $ 89,973
========= =========
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. Accordingly,
on January 1, 1997, the Partnership's interest in Sorrento II Partners was
increased from 73.08% to 75.09% to reflect 1996 contributions and distributions.
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 March 31, 1997. 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 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.
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 three months ended March 31, 1997
and 1996 are affiliate transactions as follows:
March 31
--------------------------
1997 1996
--------------------------
Management fees $ 12,719 $ 12,391
Administrative fees 13,795 10,876
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 INSTITUTIONAL PROPERTIES V
a Limited Partnership
S-P PROPERTIES, INC.
General Partner
Date: MAY 12, 1997 /S/ THOMAS N. THURBER
Thomas N. Thurber
President and Director
Date: MAY 12, 1997 /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 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> 36,559
<SECURITIES> 0
<RECEIVABLES> 553,913
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 138,020
<PP&E> 8,015,561
<DEPRECIATION> 2,096,192
<TOTAL-ASSETS> 6,800,451
<CURRENT-LIABILITIES> 274,240
<BONDS> 3,000,000
0
0
<COMMON> 0
<OTHER-SE> 2,450,251
<TOTAL-LIABILITY-AND-EQUITY> 6,800,451
<SALES> 275,936
<TOTAL-REVENUES> 275,936
<CGS> 0
<TOTAL-COSTS> 176,129
<OTHER-EXPENSES> 111,863
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (9,053)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9,053)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,053)
<EPS-PRIMARY> (.29)
<EPS-DILUTED> (.29)
</TABLE>
