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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
Commission file number 0-15690
RESOURCES PENSION SHARES 5, L.P.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-3353722
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Cambridge Center, 9th Floor, Cambridge, Massachusetts 02142
-----------------------------------------------------------
(Address of principal executive offices)
(617) 234-3000
----------------------------------------------------
(Registrant's telephone number, including area code)
411 West Putnam Avenue, Suite 270, Greenwich, CT 06830
------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check 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
----- -----
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<PAGE>
RESOURCES PENSION SHARES 5, L.P.
FORM 10Q - SEPTEMBER 30, 1999
INDEX
<TABLE>
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
BALANCE SHEETS - September 30, 1999 and December 31, 1998 ................................. 1
STATEMENTS OF OPERATIONS - For the three months ended September 30, 1999
and 1998 and for the nine months ended September 30, 1999 and 1998....................... 2
STATEMENT OF PARTNERS' EQUITY - For the nine months ended
September 30, 1999 ................................................................... 3
STATEMENTS OF CASH FLOWS - For the nine months ended
September 30, 1999 and 1998 .......................................................... 4
NOTES TO FINANCIAL STATEMENTS.............................................................. 5-9
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS ................................................. 10-12
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS..................................................................... 13
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K...................................................... 13
SIGNATURES........................................................................................... 14
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
RESOURCES PENSION SHARES 5, L.P.
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------ ------------
<S> <C> <C>
ASSETS
Investments in mortgage loans $ 12,475,777 $ 12,531,894
Real estate - net 7,476,744 7,581,505
Cash and cash equivalents 4,480,082 3,427,496
Other assets 163,474 133,656
Interest receivable - mortgage loans 46,160 105,751
Interest receivable - other 2,314 6,098
------------ ------------
$ 24,644,551 $ 23,786,400
============ ============
LIABILITIES AND PARTNERS' EQUITY
Liabilities
Accounts payable and accrued expenses $ 148,096 $ 200,278
Other liabilities 441,604 441,604
Due to affiliates 112,248 108,573
------------ ------------
Total liabilities 701,948 750,455
------------ ------------
Commitments and contingencies
Partners' equity
Limited partners' equity (5,690,843
units issued and outstanding) 23,703,187 22,805,596
General partners' equity 239,416 230,349
------------ ------------
Total partners' equity 23,942,603 23,035,945
------------ ------------
$ 24,644,551 $ 23,786,400
============ ============
</TABLE>
1
<PAGE>
RESOURCES PENSION SHARES 5, L.P.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the three months ended For the nine months ended
September 30, September 30,
-------------------------- --------------------------
1999 1998 1999 1998
---------- --------- ---------- -----------
<S> <C> <C> <C> <C>
Revenues
Mortgage loans interest income $ 324,011 $ 319,104 $ 973,589 $10,226,571
Operating income - real estate 256,675 201,411 764,761 752,260
Short term investment interest 52,172 40,143 138,034 435,021
Other income 7 14,479 68,117 68,644
--------- --------- ---------- -----------
632,865 575,137 1,944,501 11,482,496
--------- --------- ---------- -----------
Costs and expenses
Management fees 103,900 98,771 307,126 505,032
Operating expenses - real estate 93,212 99,685 320,574 327,788
Depreciation and amortization expense 57,710 53,592 172,491 168,841
General and administrative expenses 38,471 58,612 168,370 203,318
Property management fees 18,095 12,750 45,833 44,905
Mortgage servicing fees 7,800 7,546 23,449 37,814
--------- --------- ---------- -----------
319,188 330,956 1,037,843 1,287,698
--------- --------- ---------- -----------
313,677 244,181 906,658 10,194,798
Loss on disposition of real estate - - - 28,156
--------- --------- ---------- -----------
Net income $ 313,677 $ 244,181 $ 906,658 $10,166,642
========= ========= ========== ===========
Net income attributable to
Limited partners $ 310,540 $ 241,740 $ 897,591 $10,064,976
General partners 3,137 2,441 9,067 101,666
--------- --------- ---------- -----------
$ 313,677 $ 244,181 $ 906,658 $10,166,642
========= ========= ========== ===========
Net income per unit of limited partnership
interest (5,690,843 units outstanding) $ .06 $ .04 $ .16 $ 1.77
========= ========= ========== ===========
</TABLE>
See notes to financial statements.
2
<PAGE>
RESOURCES PENSION SHARES 5, L.P.
STATEMENT OF PARTNERS' EQUITY
<TABLE>
<CAPTION>
General Limited Total
Partners' Partners' Partners'
Equity Equity Equity
--------- ----------- -----------
<S> <C> <C> <C>
Balance, January 1, 1999 $ 230,349 $22,805,596 $23,035,945
Net income for the nine months ended
September 30, 1999 9,067 897,591 906,658
--------- ----------- -----------
Balance, September 30, 1999 $ 239,416 $23,703,187 $23,942,603
========= =========== ===========
</TABLE>
See notes to financial statements.
3
<PAGE>
RESOURCES PENSION SHARES 5, L.P.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the nine months ended
September 30,
-----------------------------
1999 1998
----------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
Cash flows from operating activities
Net income $ 906,658 $10,166,642
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization expense 172,491 168,841
Amortization of origination and acquisition fees (24,468) (1,068)
Loss on disposition of real estate - 28,156
Changes in assets and liabilities
Other assets (44,819) (65,062)
Interest receivable - mortgage loans 59,591 79,383
Interest receivable - other 3,784 62,930
Accounts payable and accrued expenses (52,182) (896,583)
Due to affiliates 3,675 (215,208)
----------- ------------
Net cash provided by operating activities 1,024,730 9,328,031
----------- ------------
Cash flows from investing activities
Proceeds from disposition of real estate, net - 1,456,844
Mortgage loan repayments received 80,585 12,848,090
Additions to real estate (52,729) (13,483)
----------- ------------
Net cash provided by investing activities 27,856 14,291,451
----------- ------------
Cash flows from financing activities
Distributions to partners - (36,386,903)
----------- ------------
Net increase (decrease) in cash and cash equivalents 1,052,586 (12,767,421)
Cash and cash equivalents, beginning of period 3,427,496 15,725,616
----------- ------------
Cash and cash equivalents, end of period $ 4,480,082 $ 2,958,195
=========== ============
</TABLE>
See notes to financial statements.
4
<PAGE>
RESOURCES PENSION SHARES 5, L.P.
FORM 10Q - SEPTEMBER 30, 1999
1 INTERIM FINANCIAL INFORMATION
The summarized financial information contained herein is unaudited;
however, in the opinion of management all adjustments (consisting of
normal recurring accruals) necessary for a fair presentation of such
financial information have been included. The accompanying financial
statements, footnotes and discussions should be read in conjunction
with the financial statements, related footnotes and discussions
contained in the Resources Pension Shares 5, L.P. (the "Partnership")
annual report on Form 10-K for the year ended December 31, 1998. The
results of operations for the nine months ended September 30, 1999 are
not necessarily indicative of the results to be expected for the full
year.
When used in this quarterly report on Form 10-Q, the words "believes,"
"anticipates," "expects" and similar expressions are intended to
identify forward-looking statements. Statements looking forward in time
are included in this quarterly report on Form 10-Q pursuant to the
"safe harbor" provision on the Private Securities Litigation Reform Act
of 1995. Such statements are subject to certain risks and uncertainties
which could cause actual results to differ materially, including, but
not limited to, those set forth in "management's discussion and
analysis of financial condition and results of operations." Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Partnership
undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances occurring after the date
hereof or to reflect the occurrence of unanticipated events.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investments in mortgage loans
The Partnership accounts for its investments in mortgage loans under
the following methods:
Investment method
Mortgage loans representing transactions in which the Partnership
is considered to have substantially the same risks and potential
rewards as the borrower are accounted for as investments in real
estate rather than as loans. Although the transactions are
structured as loans, due to the terms of the deferred interest
portion of the mortgage loan, it is not readily determinable at
inception that the borrower will continue to maintain a minimum
investment in the property. Under this method of accounting, the
Partnership will recognize as revenue the lesser of the amount of
interest as contractually provided for in the mortgage loan, or
the pro rata share of the actual cash flow from operations of the
underlying property inclusive of depreciation and interest
expense on any senior indebtedness.
Interest method
Under this method of accounting, the Partnership recognizes
revenue as interest income over the term of the mortgage loan so
as to produce a constant periodic rate of return. Interest income
is not recognized as revenue during periods where there are
concerns about the ultimate realization of the interest or the
loan principal.
5
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RESOURCES PENSION SHARES 5, L.P.
FORM 10Q - SEPTEMBER 30, 1999
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Allowance for loan losses
A provision for loan losses is established based upon a periodic review
of each of the mortgage loans in the Partnership's portfolio. In
performing the review, management considers the estimated fair value of
the mortgage loan or collateral as well as other factors, such as the
current occupancy, the amount and status of any senior debt, the
prospects for the property and the economic situation in the region
where the property is located. Because this determination of fair value
is based upon projections of future economic events, the amounts
ultimately realized at disposition may differ materially from the
carrying value as of September 30, 1999. Accordingly, the Partnership
may provide additional losses in subsequent periods and such provisions
could be material.
Write-down for impairment
The Partnership records write-downs for impairment based upon a
periodic review of the real estate in its portfolio. Real estate
property is carried at the lower of depreciated cost or estimated fair
value. In performing this review, management considers the estimated
fair value of the property based upon the undiscounted future cash
flows, as well as other factors, such as the current occupancy, the
prospects for the property and the economic situation in the region
where the property is located. Because this determination of estimated
fair value is based upon projections of future economic events which
are inherently subjective, the amounts ultimately realized at
disposition may differ materially from the carrying value at each
period. Accordingly, the Partnership may record additional write-downs
in subsequent periods and such write-downs could be material.
3 CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES
The Investment General Partner of the Partnership, Resources Pension
Advisory Corp., the Administrative General Partner, Resources Capital
Corp., and the Associate General Partner, Presidio AGP Corp. are
wholly-owned subsidiaries of Presidio Capital Corp. ("Presidio"). The
Administrative General Partner is also a general partner in several
other limited partnerships which are also affiliated with Presidio, and
which are engaged in businesses that are, or may be in the future, in
direct competition with the Partnership. The Investment General
Partner, the Administrative General Partner and Associate General
Partner are collectively referred to as the "General Partners."
On August 28, 1997, an affiliate of NorthStar Capital Partners acquired
all of the Class B shares of Presidio. This acquisition, when
aggregated with previous acquisitions, caused NorthStar Capital
Partners to acquire indirect control of the General Partners. Effective
July 31, 1998, Presidio is indirectly controlled by NorthStar Capital
Investment Corp. ("NorthStar"), a Maryland corporation.
Presidio entered into a management agreement with NorthStar Presidio
Management Company LLC ("NorthStar Presidio"), an affiliate of
NorthStar. Under the terms of the management agreement, NorthStar
Presidio provides the day-to-day management of Presidio and its direct
and indirect subsidiaries and affiliates.
For the nine months ended September 30, 1999 and 1998, reimbursable
expenses due to NorthStar Presidio amounted to $56,926 and $6,000,
respectively.
On October 21, 1999, Presidio entered into a new Services Agreement
with AP-PCC III, L.P. (the "Agent") pursuant to which the Agent was
retained to provide asset management and investor relation services to
the Partnership and other entities affiliated with the Partnership.
6
<PAGE>
RESOURCES PENSION SHARES 5, L.P.
FORM 10Q - SEPTEMBER 30, 1999
3 CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES (continued)
As a result of this agreement, the Agent has the duty to direct the day
to day affairs of the Partnership, including, without limitation,
reviewing and analyzing potential sale, financing or restructuring
proposals regarding the Partnership's assets, preparation of all
Partnership reports, maintaining Partnership records and maintaining
bank accounts of the Partnership. The Agent is not permitted, however,
without the consent of Presidio, or as otherwise required under the
terms of the Partnership's Agreement of Limited Partnership (the
"Partnership Agreement") to, among other things, cause the Partnership
to sell or acquire an asset or file for bankruptcy.
In order to facilitate the provision by the Agent of the asset
management services and the investor relation services, effective
October 25,1999, the officers and directors of the General Partner
resigned and nominees of the Agent were elected as the officers and
directors of the General Partner. The Agent is an affiliate of Winthrop
Financial Associates, a Boston based company that provides asset
management services, investor relation services and property management
services to over 150 limited partnerships which own commercial property
and other assets. The General Partner does not believe that this
transaction will have a material effect on the operations of the
Partnership.
For management of the affairs of the Partnership, the Administrative
General Partner is entitled to receive a management fee equal to 1.25%
per annum of the average month-end net asset value of the Partnership
for the first four years after the initial closing date; 1.5% for the
next six years; and 1.75% thereafter. For the nine months ended
September 30, 1999 and 1998, the Administrative General Partner earned
$307,126 and $505,032, respectively.
For the servicing of mortgage loans made by the Partnership, the
Investment General Partner is entitled to receive a mortgage servicing
fee of 1/4 of 1% per annum of the principal balances loaned. During the
nine months ended September 30, 1999 and 1998, the Investment General
Partner earned $23,449 and $37,814, respectively, for mortgage
servicing fees.
On December 9, 1993, the Partnership has entered into a supervisory
management agreement with Resources Supervisory Management Corp.
("RSMC"), an affiliate of the General Partners, to perform certain
functions relating to supervising the management of the Groton
property. As such, RSMC is entitled to receive as compensation for its
supervisory management services the greater of 6% of annual gross
revenues from the Groton property when leasing services are performed
or 3% of gross revenue when no leasing services are performed. RSMC
entered into an agreement with an unaffiliated local management company
to perform such services on behalf of the Partnership. The terms of
this agreement are substantially the same as the agreement entered into
between the Partnership and RSMC. There was no supervisory management
fee earned by RSMC for the nine months ended September 30, 1999 and
1998. Management fees earned by the unaffiliated local management
company amounted to $45,833 and $44,905 for the nine months ended
September 30, 1999 and 1998, respectively.
The General Partners collectively are allocated 1% of net income, loss
and cash flow distributions of the Partnership. Such amounts allocated
or distributed to the General Partners are apportioned .98% to the
Administrative General Partner, .01% to the Investment General Partner
and .01% to the Associate General Partner.
As of September 30, 1999 affiliates of Presidio have purchased
1,413,256.475 limited partnership units. These units represent 24.8% of
the issued and outstanding limited partnership units.
7
<PAGE>
RESOURCES PENSION SHARES 5, L.P.
FORM 10Q - SEPTEMBER 30, 1999
4 INVESTMENTS IN MORTGAGE LOANS
Information with respect to the Partnership's investments in mortgage
loans is summarized below:
<TABLE>
<CAPTION>
Interest Contractual Carrying
Interest Rate Mortgage Recognized Balance Value
----------------------------- Maturity Amount Sept. 30, Sept. 30, Sept. 30,
Description Current % Accrued % Date Advanced 1999 1999 (2) 1999 (1)
------------------ ------------- -------------- ----------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Shopping Centers
----------------
Lucky Supermarket
Buena Park, CA (4) 8.41-10.00 1.82 - 0 May 2005 $ 2,200,000 $ 166,153 $ 2,498,197 $ 2,229,994
Hotel
-----
Crowne Plaza Hotel (3)
Cincinnati, Ohio 11.00 - October 2000 6,500,000 561,464 6,397,617 6,397,617
Office Building
---------------
Lionmark Corp. Ctr.
Columbus, OH (3) 8.5 - June 2003 4,000,000 245,972 3,848,166 3,848,166
----------- ---------- ----------- -----------
$12,700,000 $ 973,589 $12,743,980 $12,475,777
=========== ========== =========== ===========
</TABLE>
1. The carrying values of the above mortgage loans are inclusive of
acquisition fees, accrued interest recognized and loan origination
fees.
2. The contractual balance represents the original mortgage amount
advanced plus accrued interest calculated in accordance with the loan
agreements, less principal amortization received.
3. These loans are accounted for under the interest method.
4. This loan is accounted for under the investment method.
DVL Loan
On February 28, 1997, the Partnership funded a Negotiable Promissory
Note (the "Note") to DVL, Inc. ("DVL"), in the principal amount of
$2,000,000 at an annual interest rate of 12% with interest payable
monthly that was due to mature on February 27, 2000. The Note was
secured by (among other things) a collateral assignment of DVL's
interest in certain promissory notes payable to DVL.
In July 1997 and April 1998, DVL made payments to the Partnership
totalling approximately $1,500,000 towards the principal balance of the
Note plus interest and a yield maintenance fee as a result of the sale
of two properties underlying the Note. In January 1999, the balance of
the Note was repaid in its entirety.
5 REAL ESTATE
Landover, Maryland
On December 21, 1992, the Investment General Partner, on behalf of the
Partnership, foreclosed on the property securing the Garfinkel's loan.
At the foreclosure sale, the Partnership acquired the property for a
bid of $3,200,000. In addition, in June 1993, the Partnership paid
$84,404 for costs associated with the foreclosure. Such costs have been
capitalized as real estate assets and are being depreciated over the
estimated useful life of the property.
8
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RESOURCES PENSION SHARES 5, L.P.
FORM 10Q - SEPTEMBER 30, 1999
5 REAL ESTATE (continued)
Landover, Maryland (continued)
On January 27, 1992, the Partnership received $450,000 from the former
property owner in exchange for a release of a personal guarantee in
which the former owner was obligated to reimburse the Partnership for
asbestos removal up to a maximum of $500,000. The receipt of these
funds was recorded as a liability on the Partnership's balance sheet.
During June 1992, $6,950 was paid for remedial cleaning in connection
with the asbestos removal and the unexpended asbestos reserve
aggregated $443,050, which is included in other liabilities in the
accompanying balance sheets at September 30, 1999 and December 31,
1998. The Partnership does not presently plan to commence removal of
the asbestos until a purchaser or tenant for the property is
identified.
The Garfinkel's property has been vacant since the foreclosure of the
Partnership.
Groton, Connecticut
The Partnership funded a loan, in the original amount of $8,000,000,
that was collateralized by a shopping center in Groton, Connecticut. On
September 20, 1991, Groton Associates, the borrower, filed a voluntary
petition for reorganization pursuant to the provisions of Chapter 11 of
the United States Bankruptcy Code. The Partnership commenced a
foreclosure action in Connecticut and on December 9, 1993 foreclosed on
the shopping center.
At the foreclosure, the estimated net realizable value of the shopping
center was determined to be $6,500,000 based on the third party
appraisal of the shopping center previously received by the
Partnership. All reserves previously recorded on the loan were written
off after the foreclosure and the remaining balance of $6,500,000 was
transferred to real estate on the Partnership's balance sheet.
The following table is a summary of the Partnership's real estate as
of:
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- -------------
<S> <C> <C>
Land 1,902,000 $ 1,902,000
Building and improvements 6,776,955 6,724,226
------------- -------------
8,678,955 8,626,226
Less accumulated depreciation (1,202,211) (1,044,721)
------------- -------------
$ 7,476,744 $ 7,581,505
============= =============
</TABLE>
9
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and capital resources
As of September 30, 1999, the Partnership has funded an aggregate of
$12,700,000 to the mortgagors in three outstanding mortgage loans. (See
Note 4 to the financial statements.)
On February 28, 1997, the Partnership funded a Negotiable Promissory
Note (the "Note") to DVL, Inc. ("DVL"), in the principal amount of
$2,000,000 at an annual interest rate of 12% with interest payable
monthly.
In July 1997 and April 1998, DVL made payments to the Partnership
totalling approximately $1,500,000 towards the principal balance of the
Note plus interest and a yield maintenance fee as a result of the sale
of two properties underlying the Note. In January 1999, the balance of
the Note was repaid in its entirety.
In March 1997, the Xerox loan matured. On September 30, 1997 the
Partnership received a deed-in-lieu of foreclosure on the property
underlying this loan. At that date, the Xerox loan had a carrying value
of $1,100,000 and the underlying property had an estimated net
realizable value of $1,500,000. Accordingly, the Partnership has
reduced its investments in mortgage loans by the carrying value of the
Xerox loan and recorded an addition to real estate for the estimated
net realizable value of the underlying property. On March 10, 1998, the
Partnership sold this property for net proceeds of approximately
$1,457,000.
On June 3, 1998, the Avon loan was prepaid in its entirety. The
Partnership received $3,694,492 of which $3,638,804 was applied towards
principal and $55,688 to interest.
In June 1998, the Bankruptcy Court approved the settlement of the Bank
of California Wrap Loan in its entirety. At that time, the net carrying
value on the Partnership's books was $8,500,000. The Partnership
received the full contractual amount of $16,955,560, of which
$8,500,000 was applied towards principal and $8,455,560 applied to
interest.
Currently, the foreclosed property which formerly secured the Garfinkel
Loan is vacant. Funds which are necessary to lease up the property and
to remedy deferred maintenance conditions at the Garfinkel's property
and for capital improvements will be supplied from the Partnership's
working capital reserves. The Partnership currently holds working
capital reserves in short term investments, at rates which are lower
than the returns previously earned on the loans that have been prepaid.
If excess working capital is ultimately invested in new loans, these
investments are likely to be at lower rates than previous investments
due to current market conditions.
On June 16, 1998, the Partnership paid a special cash distribution of
$34,489,955 ($6.00 per limited partnership unit), substantially all of
which represented proceeds from mortgage principal payments and
property sales received in 1998 and prior years. At September 30, 1999
the Partnership had working capital reserves of approximately
$3,800,000. Working capital reserves are invested in short-term
instruments and are expected to be sufficient to pay administrative
expenses during the term of the Partnership. If necessary, the
Partnership has the right to establish reserves from disposition
proceeds or from cash flow.
Except as discussed above, management is not aware of any other known
trends, events, commitments or uncertainties that will have a
significant impact on liquidity.
10
<PAGE>
Results of operations
Net income increased for the three month period but decreased for the
nine month period ended September 30, 1999 compared with the same
periods in the prior year. The increase in the three months ended
September 30, 1999 was due to an increase in revenues coupled with a
decrease in costs and expenses. The decrease in the nine months ended
September 30, 1999 was principally attributable to the receipt of the
entire outstanding contractual balances from the Bank of California,
Avon Market Center and DVL loans during the prior year period.
Revenues increased for the three month period but decreased for the
nine month period ended September 30, 1999 compared with the same
periods in the prior year. The increase in the three month period ended
September 30, 1999 was primarily due to an increase in mortgage
interest income on the Partnership's three remaining loans, operating
income from the Groton shopping center and greater investment interest
income partially offset by a decrease in other income. The decrease in
the nine months ended September 30, 1999 was primarily due to a
decrease in mortgage interest income, resulting from loan repayments
received in 1998 from Bank of California, Avon Market Center and DVL
loans. Investment interest income decreased as a result of a decrease
in cash available for investment on which the interest is earned which
resulted from distributions of cash made to partners during the first
six months of 1998.
Costs and expenses decreased for the three and nine month periods ended
September 30, 1999 compared with the same periods in the prior year.
The decrease for the nine months ended September 30, 1999 is primarily
due to a decrease in management fees as a result of a decrease in the
net asset value on which such fees are calculated due to the repayment
of mortgage loans. In addition, operating expenses decreased for both
the three and nine months ended September 30, 1999 as a result of the
disposition of the Xerox property in March 1998. General and
administrative expenses decreased for both the three and nine months
ended September 30, 1999 primarily as a result of a decrease in legal
expenses due to the mortgage loan payoffs.
Inflation
Inflation has not had a material effect on the Partnership's revenues
during the period and is not expected to have a material effect in the
future. However, prolonged periods of low or no inflation could result
in low levels of interest rates which could result in certain of the
Partnership's loans being prepaid prior to maturity and the Partnership
receiving decreased revenues on any reinvestment of such funds.
Year 2000 compliance
The Year 2000 compliance issue concerns the inability of computerized
information systems and programs to accurately calculate, store or use
a date after December 31, 1999, as a result of the year being stored as
a two digit number. The Partnership is dependent upon the General
Partner and its affiliates for management and administrative services.
This could result in system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary
inability to process transactions, send invoices, or engage in similar
normal business activities.
During the third quarter of 1999, the General Partner and its
affiliates completed their assessment of computer systems used in
connection with the management of the Partnership. The General Partner
and its affiliates have completed upgrading those systems where
required. The Partnership has to date not borne, nor is it expected
that the Partnership will bear, any significant costs in connection
with the upgrade of those systems requiring remediation.
11
<PAGE>
To date, the General Partner is not aware of any external agent or
service provider with a Year 2000 issue that would materially impact
the Partnership's results of operations, liquidity or capital
resources. However, the General Partner has no means of ensuring that
external agents and service providers will be Year 2000 compliant. The
General Partner does not believe that the inability of external agents
or service providers to complete their Year 2000 resolution process in
a timely manner will have a material impact on the financial position
or results of operations of the Partnership. However, the effect of
non-compliance by external agents is not readily determinable.
12
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
(a) None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: None.
(b) Reports on Form 8-K: None
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RESOURCES PENSION SHARES 5, L.P.
By: Resources Capital Corp.
Administrative General Partner
By: /s/ Allan Rothschild
-------------------------------------
Allan Rothschild
Duly Authorized Officer
By: /s/ Lawrence Schachter
-------------------------------------
Lawrence Schachter
Principal Financial and Accounting
Officer
Date: November 11, 1999
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary information extracted from the Financial
Statements of the September 30, 1999 Form 10-Q of Resources Pension Shares 5 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 4,480,082
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,692,030
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 24,644,551
<CURRENT-LIABILITIES> 701,948
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 23,942,603
<TOTAL-LIABILITY-AND-EQUITY> 24,644,551
<SALES> 0
<TOTAL-REVENUES> 1,944,501
<CGS> 0
<TOTAL-COSTS> 865,352
<OTHER-EXPENSES> 172,491
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 906,658
<INCOME-TAX> 0
<INCOME-CONTINUING> 906,658
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 906,658
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
