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 June 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 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 - June 30, 1997 and December 31, 1996 .... 4
Consolidated Statements of Operations - For the Six Months Ended
June 30, 1997 and 1996 and the Three Months Ended
June 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 Six Months Ended June 30, 1997 .................... 6
Consolidated Statements of Cash Flows - For the Six Months
Ended June 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 three months ended June 30, 1997 decreased by $48,000, or 18%,
principally as a result of the billing of common area maintenance fees in the
first quarter of 1997. These fees were billed in the second quarter in 1996.
Occupancy of the property at June 30, 1997 and 1996 remained unchanged at 92%.
Operating expenses for the six months ended June 30, 1997 increased by $12,000,
or 6%, 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 June 30, 1997 increased by $13,000, or 11%, primarily due to the higher
professional fees. This increase was partially offset by a decrease in repair
and maintenance costs and lower administrative costs incurred during the period.
(c) LIQUIDITY AND CAPITAL RESOURCES
The Partnership is in an illiquid position at June 30, 1997 with cash of $19,000
and current liabilities of $219,000. 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
JUNE 30, 1997 AND DECEMBER 31, 1996
June 30, 1997 December 31, 1996
------------- -------------
ASSETS
Cash and cash equivalents .................... $ 18,553 $ 8,578
Receivables:
Unbilled rent .............................. 490,790 489,965
Due from affiliates .......................... 69,595 18,995
Income-producing property - net of
accumulated depreciation of $2,194,231
and $1,998,154, respectively ............... 5,823,328 5,992,435
Other assets ................................. 224,249 275,860
------------- -------------
Total Assets ................................. $ 6,626,515 $ 6,785,833
============= =============
LIABILITIES AND PARTNERS' EQUITY
Accrued and other liabilities ................ $ 218,616 $ 247,566
------------- -------------
Total Liabilities ............................ 218,616 247,566
------------- -------------
Ground lessor's equity in income-
producing property ......................... 3,000,000 3,000,000
------------- -------------
Minority interest in consolidated
joint venture ............................. 1,046,488 1,078,963
------------- -------------
Partners' equity:
General Partner ............................ 0 0
Limited Partners:
140,000 units authorized,
30,777 issued and
outstanding ................................ 2,361,411 2,459,304
------------- -------------
Total Partners' equity ....................... 2,361,411 2,459,304
------------- -------------
Total Liabilities and Partners' equity ...... $ 6,626,515 $ 6,785,833
============= =============
UNAUDITED
SEE ACCOMPANYING NOTES
4
<PAGE>
SIERRA PACIFIC INSTITUTIONAL PROPERTIES V
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
AND FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
------------------------ ------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Rental income .......................... $ 494,567 $ 506,638 $ 218,631 $ 267,116
---------- ---------- ---------- ----------
Total revenues .................... 494,567 506,638 218,631 267,116
---------- ---------- ---------- ----------
EXPENSES:
Operating expenses ................... 209,493 197,964 129,222 116,225
Ground lease ......................... 191,715 191,250 95,857 103,125
Depreciation and amortization ........ 223,727 223,725 111,864 111,866
---------- ---------- ---------- ----------
Total costs and expenses .......... 624,935 612,939 336,943 331,216
---------- ---------- ---------- ----------
LOSS BEFORE MINORITY INTEREST'S SHARE
OF CONSOLIDATED JOINT VENTURE LOSS ..... (130,368) (106,301) (118,312) (64,100)
---------- ---------- ---------- ----------
MINORITY INTEREST'S SHARE OF
CONSOLIDATED JOINT VENTURE LOSS ........ 32,475 28,616 29,472 17,125
---------- ---------- ---------- ----------
NET LOSS ................................. $ (97,893) $ (77,685) $ (88,840) $ (46,975)
========== ========== ========== ==========
Net loss per limited partnership unit .... $ (3.18) $ (2.52) $ (2.89) $ (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, 1996
AND FOR THE SIX MONTHS ENDED JUNE 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 ............................. (3.18) (97,893) (97,893)
------------ ------------ ------------ ------------
Partners' equity - June 30, 1997 ..... $ 76.73 $ 2,361,411 $ 0 $ 2,361,411
============ ============ ============ ============
</TABLE>
UNAUDITED
SEE ACCOMPANYING NOTES
6
<PAGE>
SIERRA PACIFIC INSTITUTIONAL PROPERTIES V
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
1997 1996
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ....................................... $ (97,893) $ (77,685)
Adjustments to reconcile net loss
to cash provided by operating activities:
Depreciation and amortization ................ 223,727 223,725
Minority interest's share of consolidated
joint venture loss ......................... (32,475) (28,616)
Increase in rent receivable .................. (825) (51,192)
Decrease in other assets ..................... 23,961 21,987
Decrease in accrued and other liabilities .... (28,950) (15,164)
---------- ----------
Net cash provided by operating activities .... 87,545 73,055
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for property additions .............. (26,970) (10,532)
---------- ----------
Net cash used in investing activities ........ (26,970) (10,532)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan to affiliate ............................ (50,600) 0
---------- ----------
Net cash used in financing activities ........ (50,600) 0
---------- ----------
NET INCREASE IN CASH
AND CASH EQUIVALENTS ......................... 9,975 62,523
CASH AND CASH EQUIVALENTS -
Beginning of period .......................... 8,578 66,933
---------- ----------
CASH AND CASH EQUIVALENTS -
End of period ................................ $ 18,553 $ 129,456
========== ==========
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.
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 June 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 June 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.
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 six months ended June 30, 1997 and
1996 are affiliate transactions as follows:
June 30
-------------------
1997 1996
-------- --------
Management fees ......... $ 29,575 $ 27,231
Administrative fees ..... 36,412 36,059
Construction fees ....... 1,998 0
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: AUGUST 13, 1997 /S/ THOMAS N. THURBER
Thomas N. Thurber
President and Director
Date: AUGUST 13, 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 JUNE 30, 1997 FINANCIAL
STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 18,553
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 88,148
<PP&E> 8,017,559
<DEPRECIATION> 2,194,231
<TOTAL-ASSETS> 6,626,515
<CURRENT-LIABILITIES> 218,616
<BONDS> 3,000,000
0
0
<COMMON> 0
<OTHER-SE> 2,361,411
<TOTAL-LIABILITY-AND-EQUITY> 6,626,515
<SALES> 494,567
<TOTAL-REVENUES> 494,567
<CGS> 0
<TOTAL-COSTS> 401,208
<OTHER-EXPENSES> 223,727
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (97,893)
<INCOME-TAX> 0
<INCOME-CONTINUING> (97,893)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (97,893)
<EPS-PRIMARY> (3.18)
<EPS-DILUTED> (3.18)
</TABLE>
