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, 2000
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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 450
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 - March 31, 2000 and December 31, 1999 ....... 4
Consolidated Statements of Operations - For the Three Months
Ended March 31, 2000 and 1999 ............................................ 5
Consolidated Statement of Changes in Partners' Equity - For the
Year Ended December 31, 1999 and for the Three Months Ended
March 31, 2000 ........................................................... 6
Consolidated Statements of Cash Flows - For the Three Months
Ended March 31, 2000 and 1999 ............................................ 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 Sierra Pacific
Institutional Properties V's (the Partnership) Consolidated Financial Statements
and Notes thereto appearing elsewhere in this Form 10-Q.
The Partnership currently owns a 56.08% interest in the Sorrento II Partnership,
which operates the Sorrento II property in San Diego, California.
(b) RESULTS OF OPERATIONS
Rental income for the three months ended March 31, 2000 increased by
approximately $126,000, or 48%, when compared to the corresponding period in the
prior year. This increase was primarily due to higher common area maintenance
fees billed during the quarter. The Property was 100% occupied at March 31,
2000 and March 31, 1999.
2
<PAGE>
Total operating expenses for the three months ended March 31, 2000 increased by
approximately $1,000, or 1%, in comparison to the same period in 1999. The
Partnership incurred higher auditing, data processing and administrative costs
during the quarter. This increase was partially offset by a decrease in
maintenance and repairs costs and other operating expenses.
(c) LIQUIDITY AND CAPITAL RESOURCES
The Partnership is in a liquid position at March 31, 2000 with cash and billed
rents of approximately $136,000 and current liabilities of approximately
$65,000. A source of cash is available through advances from the minority owner
of the property, Sierra Mira Mesa Partner (SMMP). SMMP has adequate resources to
make any necessary advances during the foreseeable future.
Inflation:
The Partnership does not expect inflation to be a material factor in its
operations in 2000.
3
<PAGE>
SIERRA PACIFIC INSTITUTIONAL PROPERTIES V
(A LIMITED PARTNERSHIP)
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2000 AND DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARCH 31, 2000 DECEMBER 31, 1999
--------------- ---------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Cash and cash equivalents .................................................................... $ 30,301 $ 134,781
Receivables:
Unbilled rent .............................................................................. 437,419 451,414
Billed rent ................................................................................ 106,131 76,707
Prepaid ground lease ......................................................................... 0 1,344,540
Income-producing property - net of
accumulated depreciation of $2,289,793
and $2,195,937, respectively ............................................................... 5,766,091 5,552,440
Other assets - net of accumulated amortization
of $328,005 and $306,675, respectively ..................................................... 288,764 314,313
--------------- ---------------
Total Assets ................................................................................. $ 6,628,706 $ 7,874,195
=============== ===============
LIABILITIES AND PARTNERS' EQUITY
Accrued and other liabilities ................................................................ $ 65,298 $ 90,908
Ground lease payable ......................................................................... 0 194,539
--------------- ---------------
Total Liabilities ............................................................................ 65,298 285,447
--------------- ---------------
Ground lessor's equity in income-
producing property ......................................................................... 0 3,000,000
--------------- ---------------
Minority interest in consolidated
joint venture ............................................................................. 4,550,940 2,647,872
--------------- ---------------
Partners' equity (deficit):
General Partner ............................................................................ (53,638) 0
Limited Partners:
140,000 units authorized,
30,777 issued and
outstanding .............................................................................. 2,066,106 1,940,876
--------------- ---------------
Total Partners' equity ....................................................................... 2,012,468 1,940,876
--------------- ---------------
Total Liabilities and Partners' equity ....................................................... $ 6,628,706 $ 7,874,195
=============== ===============
</TABLE>
SEE ACCOMPANYING NOTES
4
<PAGE>
SIERRA PACIFIC INSTITUTIONAL PROPERTIES V
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
2000 1999
--------------- ---------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
REVENUES:
Rental income ............................................................................. $ 385,844 $ 260,066
Interest income ........................................................................... 11,205 0
--------------- ---------------
Total revenues .......................................................... 397,049 260,066
--------------- ---------------
EXPENSES:
Operating expenses ...................................................................... 124,762 123,578
Ground lease ............................................................................ 29,441 93,451
Depreciation and amortization ........................................................... 115,186 106,428
--------------- ---------------
Total costs and expenses ................................................ 269,389 323,457
--------------- ---------------
INCOME (LOSS) BEFORE MINORITY INTEREST'S
SHARE OF CONSOLIDATED JOINT VENTURE
(INCOME) LOSS ............................................................................. 127,660 (63,391)
--------------- ---------------
MINORITY INTEREST'S SHARE OF
CONSOLIDATED JOINT VENTURE
(INCOME) LOSS ............................................................................. (56,068) 22,250
--------------- ---------------
NET INCOME (LOSS) ........................................................................... $ 71,592 $ (41,141)
=============== ===============
Net income (loss) per limited partnership unit .............................................. $ 2.30 $ (1.34)
=============== ===============
</TABLE>
SEE ACCOMPANYING NOTES
5
<PAGE>
SIERRA PACIFIC INSTITUTIONAL PROPERTIES V
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1999 AND
FOR THE THREE MONTHS ENDED MARCH 31, 2000
- --------------------------------------------------------------------------------
<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, 1999) .............................. (147.04) (4,525,280) $ 9,193 (4,516,087)
Cumulative distributions
(to December 31, 1999) .............................. (2.69) (82,761) (9,193) (91,954)
--------------- --------------- --------------- ---------------
Partners' equity - January 1, 2000 (audited) .......... 63.06 1,940,876 0 1,940,876
Cumulative adjustment of net loss allocation .......... 1.77 54,354 (54,354) 0
Net income (unaudited) ................................ 2.30 70,876 716 71,592
--------------- --------------- --------------- ---------------
Partners' equity (deficit) - March 31, 2000 (unaudited) $ 67.13 $ 2,066,106 $ (53,638) $ 2,012,468
=============== =============== =============== ===============
</TABLE>
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, 2000 AND 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
2000 1999
--------------- ---------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) .......................................................................... $ 71,592 $ (41,141)
Adjustments to reconcile net income (loss)
to cash provided by operating activities:
Depreciation and amortization ............................................................ 115,186 106,428
Minority interest's share of consolidated
joint venture income (loss) ............................................................ 56,068 (22,250)
Increase in rent receivable .............................................................. (15,429) (51,038)
Decrease in prepaids and other assets .................................................... 23,014 50,417
Decrease in accrued and other liabilities ................................................ (26,169) (29,309)
--------------- ---------------
Net cash provided by operating activities ................................................ 224,262 13,107
--------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for property additions .......................................................... (2,175,742) (23,731)
--------------- ---------------
Net cash used in investing activities .................................................... (2,175,742) (23,731)
--------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Contributions from minority investor ..................................................... 1,902,000 0
Distributions to minority investor ....................................................... (55,000) 0
Loan from affiliate ...................................................................... 0 56,000
--------------- ---------------
Net cash provided by financing activities ................................................ 1,847,000 56,000
--------------- ---------------
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS ..................................................................... (104,480) 45,376
CASH AND CASH EQUIVALENTS -
Beginning of period ...................................................................... 134,781 3,203
--------------- ---------------
CASH AND CASH EQUIVALENTS -
End of period ............................................................................ $ 30,301 $ 48,579
=============== ===============
</TABLE>
See Accompanying Notes
7
<PAGE>
SIERRA PACIFIC INSTITUTIONAL PROPERTIES V
(A LIMITED PARTNERSHIP)
---------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION
In October 1993, Sierra Pacific Institutional Properties V (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. Accordingly, on January 1, 2000,
the Partnership's interest in Sorrento II Partners was decreased from 64.90% to
56.08% to reflect 1999 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, 2000. 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, 2000 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, 1999.
3. RELATED PARTY TRANSACTIONS
Included in the financial statements for the three months ended March 31, 2000
and 1999 are affiliate transactions as follows:
MARCH 31
-----------------------
2000 1999
---------- ---------
Management fees $ 18,957 $ 15,800
Administrative fees 21,263 17,873
8
<PAGE>
Sierra Pacific Institutional Properties V
Notes to Financial Statements (Unaudited)
Page Two
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, 30,777.
Partners' equity accounts have been adjusted to reflect an allocation of
cumulative net loss to the partners in accordance with the agreement of limited
partnership. This agreement provides that 99% of operating income, gains,
losses, deductions and credits of the Partnership shall be allocated among the
limited partners and 1% be allocated to the general partner.
Prior year balances have not been adjusted because management does not believe
that the effects of these adjustments are significant to the prior year
partners' equity balances.
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
A Form 8-K was filed in April 2000 reporting a change in the Partnership's
Certifying Accountant.
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 10, 2000 /S/ THOMAS N. THURBER
------------ -----------------------------------------------
Thomas N. Thurber
President and Director
Date: MAY 10, 2000 /S/ G. ANTHONY EPPOLITO
------------ -----------------------------------------------
G. Anthony Eppolito
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, 2000 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-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 30,301
<SECURITIES> 0
<RECEIVABLES> 543,550
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 136,432
<PP&E> 8,055,884
<DEPRECIATION> 2,289,793
<TOTAL-ASSETS> 6,628,706
<CURRENT-LIABILITIES> 65,298
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,012,468
<TOTAL-LIABILITY-AND-EQUITY> 6,628,706
<SALES> 385,844
<TOTAL-REVENUES> 397,049
<CGS> 0
<TOTAL-COSTS> 154,203
<OTHER-EXPENSES> 115,186
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 71,592
<INCOME-TAX> 0
<INCOME-CONTINUING> 71,592
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 71,592
<EPS-BASIC> 2.33
<EPS-DILUTED> 2.33
</TABLE>
