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, 1997
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Commission file
number 0-15702
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SIERRA PACIFIC INSTITUTIONAL PROPERTIES V
(A LIMITED PARTNERSHIP)
State of California 33-0122424
- ------------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
5850 San Felipe, Suite 500
Houston, Texas 77057
- ------------------------------------- -----------------------------------
(Address of principal executive (Zip Code)
offices)
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, 1997 and December
31, 1996 4
Consolidated Statements of Operations - For the Nine Months Ended
September 30, 1997 and 1996 and the Three Months Ended
September 30, 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 Nine Months Ended September 30, 1997 6
Consolidated Statements of Cash Flows - For the Nine Months
Ended September 30, 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 nine months ended September 30, 1997 decreased by $12,000, or
2%, when compared to the corresponding period in the prior year. This decrease
was primarily due to lower common area maintenance billings. Occupancy of the
property at September 30, 1997 and 1996 remained unchanged at 92%.
Operating expenses for the nine months ended September 30, 1997 increased by
$26,000, or 9%, principally as a result of higher professional fees incurred
during the period. This increase was partially offset by lower accounting and
auditing costs incurred during the same period. Operating expenses for the three
months ended September 30, 1997 increased by $14,000, or 18%, primarily due to
the higher professional fees.
(c) LIQUIDITY AND CAPITAL RESOURCES
The Partnership is in an illiquid position at September 30, 1997 with cash of
$3,000 and current liabilities of $57,000. 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, 1997 and December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 30, 1997 December 31, 1996
------------------ -----------------
<S> <C> <C>
ASSETS
Cash and cash equivalents ................... $ 3,498 $ 8,578
Receivables:
Unbilled rent ............................. 483,534 489,965
Due from affiliates ......................... 157,595 18,995
Income-producing property - net of
accumulated depreciation of $2,292,269
and $1,998,154, respectively .............. 5,725,290 5,992,435
Other assets ................................ 206,407 275,860
---------- ----------
Total Assets ................................ $6,576,324 $6,785,833
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Accrued and other liabilities ............... $ 225,218 $ 247,566
---------- ----------
Total Liabilities ........................... 225,218 247,566
---------- ----------
Ground lessor's equity in income-
producing property ........................ 3,000,000 3,000,000
---------- ----------
Minority interest in consolidated
joint venture ............................ 1,032,341 1,078,963
---------- ----------
Partners' equity:
General Partner ........................... 0 0
Limited Partners:
140,000 units authorized,
30,777 issued and
outstanding ............................. 2,318,765 2,459,304
---------- ----------
Total Partners' equity ...................... 2,318,765 2,459,304
---------- ----------
Total Liabilities and Partners' equity ..... $6,576,324 $6,785,833
=========== ==========
</TABLE>
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, 1997 and 1996
and for the Three Months Ended September 30, 1997 and 1996
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
----------------------- -----------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
REVENUES:
Rental income ...................................... $ 736,809 $ 748,770 $ 242,242 $ 242,132
--------- --------- --------- ---------
Total revenues ................... 736,809 748,770 242,242 242,132
--------- --------- --------- ---------
EXPENSES:
Operating expenses ............................... 300,806 275,159 91,313 77,195
Ground lease ..................................... 287,573 286,875 95,858 95,625
Depreciation and amortization .................... 335,590 335,589 111,863 111,864
--------- --------- --------- ---------
Total costs and expenses ......... 923,969 897,623 299,034 284,684
--------- --------- --------- ---------
LOSS BEFORE MINORITY INTEREST'S SHARE
OF CONSOLIDATED JOINT VENTURE LOSS ................. (187,160) (148,853) (56,792) (42,552)
--------- --------- --------- ---------
MINORITY INTEREST'S SHARE OF
CONSOLIDATED JOINT VENTURE LOSS .................... 46,621 40,071 14,146 11,455
--------- --------- --------- ---------
NET LOSS ............................................. $(140,539) $(108,782) $ (42,646) $ (31,097)
========= ========= ========= =========
Net loss per limited partnership unit ................ $ (4.57) $ (3.53) $ (1.39) $ (1.01)
========= ========= ========= =========
</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, 1996
and for the Nine Months Ended September 30, 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 ............................ (4.57) (140,539) (140,539)
----------- ---------- ----------- ----------
Partners' equity - September 30, 1997 $ 75.34 $ 2,318,765 0 $2,318,765
=========== ========== =========== ==========
</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, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ............................................. $(140,539) $(108,782)
Adjustments to reconcile net loss
to cash provided by (used in) operating activities:
Depreciation and amortization ...................... 335,590 335,589
Minority interest's share of consolidated
joint venture loss ............................... (46,621) (40,071)
Decrease (increase) in rent receivable ............. 6,431 (69,559)
Decrease (increase) in other assets ................ 27,977 (160,486)
(Decrease) increase in accrued and other liabilities (22,348) 10,437
--------- ---------
Net cash provided by (used in) operating activities 160,490 (32,872)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for property additions .................... (26,970) (27,971)
--------- ---------
Net cash used in investing activities .............. (26,970) (27,971)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan to affiliate .................................. (138,600) 0
--------- ---------
Net cash used in financing activities .............. (138,600) 0
--------- ---------
NET DECREASE IN CASH
AND CASH EQUIVALENTS ............................... (5,080) (60,843)
CASH AND CASH EQUIVALENTS -
Beginning of period ................................ 8,578 66,933
--------- ---------
CASH AND CASH EQUIVALENTS -
End of period ...................................... $ 3,498 $ 6,090
========= =========
</TABLE>
Unaudited
See Accompanying Notes
7
<PAGE>
SIERRA PACIFIC INSTITUTIONAL PROPERTIES V
(A Limited Partnership)
NOTES TO 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 September 30, 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 September 30, 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 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
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,
1997 and 1996 are affiliate transactions as follows:
September 30
-----------------------
1997 1996
-----------------------
Management fees $ 44,545 $ 40,667
Administrative fees 52,590 52,535
Construction fees 1,998 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 INSTITUTIONAL PROPERTIES V
a Limited Partnership
S-P PROPERTIES, INC.
General Partner
Date: November 10, 1997 /s/ THOMAS N. THURBER
Thomas N. Thurber
President and Director
Date: November 10, 1997 /s/ BRUCE R. TIMBERS
Bruce R. Timbers
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, 1997 FINANCIAL
STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,498
<SECURITIES> 0
<RECEIVABLES> 483,534
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 161,093
<PP&E> 8,017,559
<DEPRECIATION> 2,292,269
<TOTAL-ASSETS> 6,576,324
<CURRENT-LIABILITIES> 225,218
<BONDS> 3,000,000
0
0
<COMMON> 0
<OTHER-SE> 2,318,765
<TOTAL-LIABILITY-AND-EQUITY> 6,576,324
<SALES> 736,809
<TOTAL-REVENUES> 736,809
<CGS> 0
<TOTAL-COSTS> 588,379
<OTHER-EXPENSES> 287,573
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (140,539)
<INCOME-TAX> 0
<INCOME-CONTINUING> (140,539)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (140,539)
<EPS-PRIMARY> (4.57)
<EPS-DILUTED> (4.57)
</TABLE>
