<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _______________ to _______________.
Commission file number 33-8230
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
FLORIDA 59-2703685
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3001 EXECUTIVE DRIVE, SUITE 260, CLEARWATER, FL 34622
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (813) 573-1201
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
NONE
(Title of class)
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
There is no market for the registrant's securities and, therefore,
aggregate market value of the holdings of non-affiliates cannot be
determined.
Number of Units
Title of Each Class At December 31, 1995
UNITS OF LIMITED PARTNERSHIP 22,309
INTEREST: $250.00 PER UNIT
There are no documents incorporated by reference herein. Exhibit
Index is on page 12 of this report.<PAGE>
PART I
ITEM 1. BUSINESS
General
Pioneer Western Properties Income Fund Limited Partnership (the
"Partnership") was formed pursuant to the Uniform Limited
Partnership Law of the State of Florida on August 14, 1986. The
Partnership currently owns three apartment complexes
("Properties")--Creek Ridge Apartments in Knoxville, Tennessee;
Foxwood Apartments in Augusta, Georgia; and Pleasant Terrace
Apartments in Knoxville, Tennessee. The Partnership does not
intend to acquire any additional properties.
The Partnership was formed in connection with the Pioneer Western
Properties Income Fund Limited Partnership, under Registration
Number 33-8230, declared effective by the Securities and Exchange
Commission on December 30, 1986. Commencing December 30, 1986, the
Partnership offered up to 40,000 Units of Limited Partnership
Interests at $250 per Unit, with a minimum purchase price of 12
Units ($3,000) or 8 Units ($2,000) for an Individual Retirement
Account. The Partnership commenced operations on April 7, 1987
when the initial $1,586,250 was released from escrow and 130
investors were admitted as Limited Partners. The Partnership
continued to raise funds from investors through the public offering
of its Units until October 7, 1988 when 22,309 Units had been sold
with an aggregate purchase price of $5,567,250. Investors were
admitted as Limited Partners upon acceptance of their subscriptions
by the Corporate General Partner. Limited Partners are not
required to make any additional capital contributions.
The Corporate General Partner is Pioneer Western Properties
Corporation ("PWPC"). The Individual General Partner was Joseph A.
Barringer until he assigned his interest in the Partnership to PWPC
effective January 13, 1989. The executive offices of the Corporate
General Partner and the Partnership are located at 3001 Executive
Drive, Suite 260, Clearwater, Florida, 34622 and their telephone
number is (813) 573-1201. For further discussion regarding the
sale of the Corporate General Partner, see Item 13, "Certain
Relationships and Related Transactions", on page 11.
Current Operations
The overall average occupancy for the Partnership's three
Properties for 1995 was approximately 93%. Rental increases were
implemented at all of the Partnership's properties in 1995.
Property operating expenses increased during 1995 primarily due to
increased contract labor costs. Significant capital improvements
during 1995 included seal coating and striping the parking lots at
Creek Ridge and Pleasant Terrace Apartments at a cost of $11,900,
roof replacements at Pleasant Terrace at a cost of $2,500 and
construction of a storage building at Foxwood Apartments at a cost
of $1,550. Carpets and appliances were replaced on a routine basis
as necessary at all properties throughout 1995.<PAGE>
Competition and Markets
In operating the Properties, the Partnership has competition from
numerous other apartments in the respective areas. The Creek Ridge
Apartments and the Pleasant Terrace Apartments are located 1.1
miles from each other in the western area of Knoxville, Tennessee,
and compete with approximately 12 apartment complexes in the
surrounding marketplace. As of March 1996, occupancy in the
surveyed apartment complexes averaged 95%. The Foxwood Apartments
in the southwest area of Augusta, Georgia, competes with four
apartment complexes. Occupancy in the competing complexes averaged
76% as of March 1996. This information was summarized from a
report on competition dated March 1996 prepared by on-site staff.
There can be no assurance that the underlying data supporting the
report has not substantially changed since this information was
obtained in March 1996. Refer to Item 2 for occupancy information
on the Properties.
Changes in Tax Laws
The effect of operations of the Partnership on the limited partners
is significantly affected by the federal income tax laws,
particularly the provisions of the Internal Revenue Code of 1986,
as amended. The Tax Reform Act of 1986 made significant changes in
Federal taxation, including changes in individual tax rates,
depreciation, capital gains treatment, limitation on passive losses
and the elimination of investment tax credit.
The federal tax laws are constantly subject to change by Congress
and the interpretations of the Code may be modified or affected by
judicial decisions or by the Treasury Department in its regulations
and rules. Any such changes may have an impact on the Partnership.
Management and Employees
The Partnership has no employees. On-site property management
services during 1995 were provided by Edgemark Management
Corporation (Edgemark), an affiliate of the Corporate General
Partner, PWPC. On-site representatives were employed by Edgemark
and the Partnership reimbursed Edgemark for the direct payroll cost
of these employees. Edgemark employed approximately eight
individuals in connection with the operations of the Partnership's
Properties. Partnership management services are provided by the
Corporate General Partner. PWPC has four employees. Effective
January 1, 1996, the General Partner engaged LEDIC Management
Group, Inc. as the primary property management company for the
Partnership's properties.<PAGE>
Industry Segments and Foreign Operations
The Partnership is engaged in only one line of business in one
industry segment as described above. The Partnership does not have
any foreign operations.
ITEM 2. PROPERTIES
As of December 31, 1995, the Partnership owned three apartment
complexes (referred to herein collectively as the "Partnership
Properties"):
1. Creek Ridge Apartments, Knoxville, Tennessee, is a 95-unit
garden apartment complex that was acquired by the Partnership
on March 31, 1987.
2. Foxwood Apartments, Augusta, Georgia, is a garden apartment
complex containing 104 apartments that was acquired by the
Partnership on October 1, 1987.
3. Pleasant Terrace Apartments, Knoxville, Tennessee, is a
64-unit apartment complex that was acquired by the Partnership
on May 1, 1988.
CREEK RIDGE APARTMENTS, KNOXVILLE, TENNESSEE
General
The Creek Ridge Apartments complex was acquired by the Partnership
on March 31, 1987 and consists of 95 garden apartment units
situated on approximately 9.9 acres in Knox County, Tennessee. The
Creek Ridge property was constructed in 1973. As of March 22,
1996, the Creek Ridge Apartments were approximately 98% occupied.
The following description of the units includes size and current
monthly rental rates as of March 22, 1996.
Advertised
Net Rentable Number Monthly
Unit Type Area (S.F.) of Units Rent
One Bed/One Bath 750 24 $360
Two Bed/One Bath 889 20 430
Two Bed/One Bath w/WDC 889 32 430
Two Bed/One Bath w/WDC
& Balcony 889 16 430
Three Bed/Two Bath 1,100 2 515
Three Bed/One Bath 1,350 1 Mgr.<PAGE>
The Creek Ridge property consists of five two-story buildings. The
development features a classical architectural design with brick
veneer construction. Additional architectural features include
wooden balconies for upper level units and concrete patios for
lower level units. Adequate parking spaces are provided. Monthly
rentals for existing residents range between $340 and $495 and
lease on a 6 or 12 month basis, renewable upon mutual agreement.
The amenities at the complex include laundry facilities, a swimming
pool and a tennis court. Each apartment unit includes a range and
oven, refrigerator, dishwasher, disposal and wall-to-wall
carpeting. Forty-eight percent of the units contain central
heating and air conditioning, while radiant ceiling heat
complemented by through-the-wall air conditioning is utilized in
all other units.
Occupancy and Rental Rates for the Past Five Years
The average occupancy rates for Creek Ridge Apartments for each of
the past five years were as follows: 1995, 95%; 1994, 96%; 1993,
96%; 1992, 97%; and 1991, 96%.
The average effective monthly rental amount per square foot for
each of the past five years was as follows: 1995, $.48; 1994, $.45;
1993, $.43; 1992, $.40; and 1991, $.40.
FOXWOOD APARTMENTS, AUGUSTA, GEORGIA
General
Foxwood Apartments, acquired by the Partnership on October 1, 1987,
consists of 104 garden apartment units situated on approximately
8.55 acres in Richmond County, Georgia. The Foxwood Property was
constructed in 1972 and, as of March 22, 1996, was 83% occupied.
A description of the units, including size and current monthly
rental rates as of March 22, 1996, is as follows:
Advertised
Net Rentable Number Monthly
Unit Type Area (S.F.) of Units Rent
One Bed/One Bath 884 24 $375
Two Bed/One Bath 994 80 425
The Foxwood Apartments consists of 13 two-story buildings each
containing eight garden-type units. There is an additional
building which contains a coin operated laundromat, the resident
manager's office and maintenance storage area. The buildings are
of frame construction with brick exterior. The roofs are a flat
mansard design. Each unit has a sliding glass door which opens
onto a patio or balcony. Monthly rentals of existing tenants range
between $345 and $410 and lease on a 6 or 12 month basis, renewable
by mutual agreement. The amenities include a swimming pool and a
lighted tennis court. Each apartment unit is fully carpeted except
for vinyl flooring in the kitchen and ceramic tile in the bathroom.
The units also include dishwashers, disposals, frost-free
refrigerators, ranges and hoods. Adequate parking spaces are
provided.
Occupancy and Rental Rates for the Past Five Years
The average occupancy rates for Foxwood Apartments for each of the
past five years were as follows: 1995, 89%; 1994, 89%; 1993, 92%;
1992, 94%; and 1991, 92%.
The average effective annual rental amount per square foot for each
of the past five years was as follows: 1995, $.42; 1994, $.42;
1993, $.41; 1992, $.38; and 1991, $.38.
PLEASANT TERRACE APARTMENTS, KNOXVILLE, TENNESSEE
General
On May 1, 1988, the Partnership purchased the Pleasant Terrace
Apartments from the Corporate General Partner for approximately
$1,187,000 in cash, representing the Corporate General Partner's
cost basis of the property. Pleasant Terrace Apartments consists
of 64 rental units situated on approximately 5.62 acres in Knox
County, Tennessee. The Pleasant Terrace property was constructed
in 1973 and, as of March 22, 1996, was approximately 92% occupied.
A description of the units, including size and current monthly
rental rates as of March 22, 1996, is as follows:
Advertised
Net Rentable Number Monthly
Unit Type Area (S.F.) of Units Rent
One Bed/One Bath Garden 575 24 $325
Two Bed/One Bath Garden 750 32 400
Three Bed/One Bath Garden 1,200 1 650
Duplexes 620-740 6 245
House 2,088 1 450
The Pleasant Terrace property consists of six two-story buildings,
three duplexes, containing a total of six rental units, and one
free-standing house. The development features include concrete
patios for lower level units. Adequate parking spaces are
provided. Monthly rentals of existing tenants range between $225
and $650 and lease on a 6 or 12 month basis, renewable upon mutual
agreement. The amenities at the complex include swimming pool,
laundry facilities and cable TV availability. Each apartment unit
includes a range and oven, refrigerator, disposal and wall-to-wall
carpeting.<PAGE>
Occupancy and Rental Rates For the Past Five Years
The average occupancy rates for Pleasant Terrace Apartments for
each of the past five years were as follows: 1995, 96%; 1994,
93%; 1993, 96%; 1992, 97%; and 1991, 96%.
The average effective monthly rental amount per square foot for
each of the past five years was as follows: 1995, $.49; 1994, $.47;
1993, $.43; 1992, $.42; and 1991, $.42.
ITEM 3. LEGAL PROCEEDINGS
In November 1994, the Partnership received an unfavorable ruling
from the Circuit Court for Knox County, Tennessee, Case No.
2-598-90, in the class action brought by former and present tenants
of Creek Ridge Apartments against the Partnership, PWPC, Evans
Realty, Inc. (former property manager) and Joseph Dixon. The
action was filed on July 31, 1990 in Knox County, Tennessee. The
plaintiffs were seeking damages of $6 million for damages they
allege they suffered resulting from a fire which destroyed one of
the Creek Ridge Apartments' buildings on August 11, 1989. The
court awarded $300,000 to the plaintiffs. As of December 31, 1995,
the remaining settlement amount totaled $50,000 and has been
accrued. The Partnership has also accrued an additional $75,000
for separate pending litigation of the same nature. These amounts
will be covered by the Partnership's insurance and, accordingly, an
insurance receivable for these amounts has been recorded at
December 31, 1995.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
fourth quarter of 1995 by means of a proxy solicitation or
otherwise.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
There is presently no public market for the Limited Partnership
interests in the Partnership, and it is not anticipated that any
public market will develop. As of December 31, 1995, there were
561 Limited Partners in the Partnership.<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The following is an unaudited schedule of selected financial data
for the Partnership for the fiscal years ended December 31, 1995,
1994, 1993, 1992 and 1991. The information below should be read in
conjunction with the financial statements and related notes thereto
and Management's Discussion and Analysis of Financial Condition and
Results of Operations included as Item 7 in this Form 10-K.
Operating Results
Years Ended
1995 1994 1993 1992 1991
Revenues,
net $1,100,606 $1,113,346 $1,090,522 $1,022,442 $ 996,745
Net income
(1) 154,309 172,741 162,182 128,047 77,178
Net income per
Limited
Partnership
unit (2) 6.57 7.36 6.91 5.45 3.29
Distributions
per limited
partnership
unit (2) 8.88 7.99 7.10 7.10 8.45
Net cash provided
by operating
activities 343,896 375,760 344,152 260,885 259,953
Financial Condition
Total
assets 5,655,659 6,008,700 5,692,718 5,746,548 5,844,040
Mortgage notes
payable $1,277,164 $1,349,878 $1,416,191 $1,476,668 $1,531,824
(1) A reconciliation of these amounts to the federal taxable
income for the year ended December 31, 1995 is included in
Note 5 of Notes to Financial Statements.
(2) Per unit share data based upon the weighted average of Limited
Partnership units outstanding for the years ended December 31,
1995, 1994, 1993, 1992 and 1991.<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Partnership's objectives are to preserve and protect the
Partnership's invested capital, to provide partially tax-deferred
distributions of cash from operations on a quarterly basis and to
achieve capital appreciation. The Partnership raised a total of
$5,567,250 in 1987 and 1988 which was invested in three Properties
(after deduction of sales commissions, certain fees and a working
capital reserve). The Partnership does not intend to acquire any
additional properties.
Results of Operations
The Partnership's net income decreased to $154,309 for the year
ended December 31, 1995 from $172,741 for the year ended December
31, 1994. This decrease in net income is primarily due to a
decrease in rental income and a smaller increase in rental property
operating expenses. The Partnership owned and operated all three
of its Properties for a full 12 month period in 1995, 1994 and
1993.
Income from operations of the Partnership's Properties before
depreciation, debt service and interest income was $440,485,
$470,193 and $456,757 in 1995, 1994 and 1993, respectively. The
Partnership generated interest and other income of $16,196, $7,336
and $12,487 in 1995, 1994 and 1993, respectively. The Corporate
General Partner continued to administer a refurbishment program
during 1995 in order to keep the Partnership's Properties
competitive within their respective rental markets.
Liquidity and Capital Resources
During 1995, the Partnership spent approximately $73,000 on the
reduction of its debt and approximately $48,000 on capital
improvements. At December 31, 1995, the Partnership had cash and
cash equivalents of approximately $252,000. The Partnership had a
net decrease in cash and cash equivalents of $176,273 since
December 31, 1994, resulting mainly from the purchase of United
States Treasury Notes for approximately $200,000. During 1996, it
is anticipated that the Partnership will spend approximately
$50,000 on capital improvements at the Partnership's Properties.
The Corporate General Partner believes that liquid assets available
are adequate to meet future liquidity and capital expenditure
requirements. Future cash distributions will depend on factors
such as cash generated from operations, refinancing, property
sales, debt repayment and capital improvements. Cash distributions
of $200,001, $180,001 and $159,998 were paid during 1995, 1994 and
1993, respectively, and $50,000 was paid in the first quarter of
fiscal 1996 for fourth quarter 1995 operations.<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is included in Item 14(a) of
this report on Form 10-K. The selected quarterly financial data
and all other schedules are omitted because they are not
applicable.
PART III
ITEM 9. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership is a limited partnership and, therefore, does not
have any officers or directors. All management functions of the
Partnership are performed by the Corporate General Partner. As of
March 22, 1996, the following persons were serving as officers,
directors or key employees of PWPC:
Name Age Title
Craig D. Caldwell 46 Director and Vice President
Rand E. McNeal 43 Director, President and
Chief Executive Officer
Craig D. Caldwell, served as Vice President of Westland Insurance
Brokers, a California corporation and a regional commercial
insurance agency until February 1991. Mr. Caldwell also previously
served as Vice President of Fund Administration for the
Consolidated Capital Companies until August 1983, which was at that
time the nation's largest real estate syndicator on a new capital
raised basis. He was also Assistant Treasurer of Consolidated
Capital Special Trust and Consolidated Capital Income Trust, which
at that time were the two largest publicly traded real estate
investment trusts on a capital raised basis involved in mortgage
lending. Also, Mr. Caldwell was a tax manager at Price Waterhouse,
Certified Public Accountants and while working there for six years,
he specialized in real estate tax matters. Mr. Caldwell has
successfully converted a number of San Francisco apartment
buildings to condominiums and is currently licensed as an insurance
broker, a real estate broker and a securities registered
representative. Mr. Caldwell graduated from UCLA with a bachelor's
degree in economics and a masters degree in business administration
in 1971 and 1972, respectively. In 1976, he also graduated from
USC with a masters degree in business taxation. Mr. Caldwell
presently owns fifty percent of the outstanding stock of Edgemark
Group, Inc., the parent company of PWPC.<PAGE>
Rand E. McNeal, served as Vice President of PWPC from July 1985 until
May 20, 1988 when he was elected President and Chief Executive Officer,
and served as a Director of PWPC from July 1985 until July 1989 and was
reappointed a director in March 1991. Since May 1988, Mr. McNeal has
also served as Vice President of Pioneer Western Corporation and has held
various director and officer positions with affiliates of PWPC. Mr.
McNeal is a Certified Public Accountant, a licensed real estate broker, a
licensed mortgage broker and formerly served as the Chief Financial
Officer of Trusty-Baldasare, a Florida-based real estate developer,
from December 1980 until he joined PWPC in 1985. Mr. McNeal was
employed by Price Waterhouse, Certified Public Accountants, from
1974 to 1979. Mr. McNeal presently owns fifty percent of the
outstanding stock of Edgemark Group, Inc., the parent company of
PWPC.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership is a limited partnership and, therefore, has no
officers or directors. Thus, the Partnership pays no executive
compensation. None of the officers or directors of the Corporate
General Partner received any remuneration from the Partnership in
1995. As the Managing General Partner, the Corporate General
Partner is entitled to receive a share in revenues, to be
compensated for services provided on a competitive basis and to be
reimbursed for certain direct expenses and certain general and
administrative expenses. (See Item 13, "Certain Relationships and
Related Transactions", below.)
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL INTEREST OWNERS
AND MANAGEMENT
No Limited Partner owns 5% or more of the outstanding Units.
Neither the Corporate General Partner nor the former Individual
General Partner directly owns any Limited Partnership interests.
However, the President of the Corporate General Partner owns 13.043
units of Limited Partnership interest as of December 31, 1995,
which represented less than 1% of the units outstanding on such
date. The Corporate General Partner is not aware of any
arrangements other than those disclosed herein which may at a
subsequent date result in a change of control of the Partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As its share of Partnership distributions, the Corporate General
Partner received cash distributions totaling $2,000 and management
fees totaling $10,844 from the Partnership during the fiscal year
ended December 31, 1995. No director or officer of either General
Partner, nor any associate of any of them, was indebted to the
Partnership at any time during the year ended December 31, 1995.
The Corporate General Partner was a wholly-owned subsidiary of
Enstar Financial Services, Inc. On March 19, 1991, Enstar
Financial Services, Inc. sold 100% of the outstanding stock of
Pioneer Western Properties Corporation, the Partnership's Corporate
General Partner, to Edgemark Group, Inc. The Corporate General
Partner retained its existing management.<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 10-K
THE FOLLOWING DOCUMENTS ARE FILED AS A PART OF THIS REPORT:
Page Reference
(a)(1)The Partnership's Financial Statements
Report of Independent Certified Public Accountants F2
on the Financial Statements as of and for the years
ended December 31, 1995, 1994 and 1993
Balance Sheets at December 31, 1995 and 1994 F3
Statements of Income for the years F4
ended December 31, 1995, 1994 and 1993
Statements of Changes in Partners' Capital for F5
the years ended December 31, 1995, 1994 and 1993
Statements of Cash Flows for the years ended F6-F7
December 31, 1995, 1994 and 1993
Notes to Financial Statements F8-F13
(a)(2)Schedules
All schedules and other financial statements have been omitted
because they are not required or because the information is
presented in the financial statements or related notes
(a)(3)The following is a list of the Exhibits required to be filed
by Item 601 of Regulation S-K
3.1 Second Amended and Restated Certificate of Limited
Partnership (incorporated by reference from Form 10-K
filed for the fiscal year ended December 31, 1989)
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Pioneer Western Properties Income Fund Limited Partnership,
a Florida limited partnership (Registrant)
By: Pioneer Western Properties Corporation
("PWPC"), its Corporate General Partner
April 1, 1996 By: Rand E. McNeal_______________________________
Rand E. McNeal, President and C.E.O.
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
April 1, 1996 By: Craig D. Caldwell____________________________
Craig D. Caldwell, Director of PWPC
April 1, 1996 By: Rand E. McNeal_______________________________
Rand E. McNeal, Principal Executive Officer
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED
PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT BY
REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT.
As of the date of the filing of this report on Form 10-K, no annual
report or proxy material has been sent to security holders. No
proxy material is anticipated to be sent to security holders.<PAGE>
PIONEER WESTERN PROPERTIES
INCOME FUND LIMITED PARTNERSHIP
Financial Statements
December 31, 1995<PAGE>
Report of Independent Certified Public Accountants
To the Partners of
Pioneer Western Properties
Income Fund Limited Partnership
In our opinion, the accompanying balance sheets and the related
statements of income, of changes in partners' capital and of cash
flows present fairly, in all material respects, the financial
position of Pioneer Western Properties Income Fund Limited
Partnership at December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the
period ended December 31, 1995, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Partnership's management; our responsibility
is to express an opinion on these financial statements based on our
audits. We conducted our audits of these statements in accordance
with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentaion. We believe that our audits provide a reasonable basis
for the opinion expressed above.
PRICE WATERHOUSE LLP
Tampa, Florida
February 2, 1996<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
BALANCE SHEETS
December 31,
1995 1994
Assets
Investments in real estate:
Land $ 680,000 $ 680,000
Buildings and furnishings, net of
accumulated depreciation of
$1,382,155 and $1,206,358 4,355,153 4,482,884
5,035,153 5,162,884
Cash and cash equivalents 251,812 428,085
Investment securities 199,386 -
Insurance receivable 125,000 375,000
Other assets 44,308 42,731
$5,655,659 $6,008,700
Liabilities and Partners' Capital
Liabilities:
Accounts payable, accrued expenses
and other liabilities $ 88,879 $ 86,374
Accrued litigation reserve 125,000 375,000
Tenant security deposits 35,670 22,810
Mortgages on real estate 1,277,164 1,349,878
Total liabilities 1,526,713 1,834,062
Commitments and contingencies (Note 6)
Partners' Capital:
General partners 22,998 17,283
Limited partners 4,105,948 4,157,355
Total partners' capital 4,128,946 4,174,638
$5,655,659 $6,008,700
The accompanying Notes to Financial Statements are an integral part of these
Financial Statements.<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
STATEMENTS OF INCOME
Year Ended December 31,
1995 1994 1993
Revenues:
Rental income, net of bad debts $1,084,410 $1,106,010 $1,078,035
Interest and other income 16,196 7,336 12,487
1,100,606 1,113,346 1,090,522
Expenses:
Rental property operating expenses 608,613 601,947 585,064
General and administrative
expenses 35,312 33,870 36,214
Depreciation and amortization 175,799 171,764 168,157
Interest expense 126,573 133,024 138,905
946,297 940,605 928,340
Net income $ 154,309 $ 172,741 $ 162,182
Net income allocable to:
General partners $ 7,715 $ 8,637 $ 8,109
Limited partners $ 146,594 $ 164,104 $ 154,073
Net income per limited partnership
unit (based on an average
22,309 limited partnership
units each year) $ 6.57 $ 7.36 $ 6.91
The accompanying Notes to Financial Statements are an integral part of these
Financial Statements.<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
Limited General
Partners Partners Combined
Balance at December 31, 1992 $4,175,777 $ 3,937 $4,179,714
Distributions ($7.10 per average
limited partnership unit) ( 158,398) ( 1,600) ( 159,998)
Net income 154,073 8,109 162,182
Balance at December 31, 1993 $4,171,452 $ 10,446 $4,181,898
Distributions ($7.99 per average
limited partnership unit) ( 178,201) ( 1,800) ( 180,001)
Net income 164,104 8,637 172,741
Balance at December 31, 1994 $4,157,355 $ 17,283 $4,174,638
Distributions ($8.88 per average
limited partnership unit) ( 198,001) ( 2,000) ( 200,001)
Net income 146,594 7,715 154,309
Balance at December 31, 1995 $4,105,948 $ 22,998 $4,128,946
The accompanying Notes to Financial Statements are an integral part of these
Financial Statements.<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
Year Ended December 31,
1995 1994 1993
Cash flow from operating
activities:
Net income $154,309 $172,741 $162,182
Adjustments to reconcile net income
to net cash provided by operating
activities:
Loss on disposal of asset - 991 -
Depreciation and amortization 175,799 171,764 168,157
Decrease (increase) in insurance
receivable 250,000 (375,000) -
(Increase) decrease in other assets ( 1,577) 15,709 9,350
Increase in accounts payable
and accrued expenses 2,505 12,818 8,979
(Decrease)increase in accrued
litigation reserve (250,000) 375,000 -
Increase (decrease) in tenants
security deposits 12,860 1,737 ( 4,516)
Total adjustments 189,587 203,019 181,970
Net cash provided by
operating activities 343,896 375,760 344,152
Cash flows (used in) provided by
investing activities:
Investments in real estate ( 48,068) ( 66,609) ( 74,839)
Purchase of investment securities (199,386) - -
Proceeds from disposal of asset - 701 -
Net cash used in investing
activities (247,454) ( 65,908) ( 74,839)
(continued on next page)
<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS -- continued
Year Ended December 31,
1995 1994 1993
Cash flows used in financing activities:
Principal payments of mortgages ( 72,714) ( 66,313) ( 60,477)
Distributions to partners (200,001) (180,001) (159,998)
Net cash used in financing
activities (272,715) (246,314) (220,475)
Net (decrease) increase in cash
and cash equivalents (176,273) 63,538 48,838
Cash and cash equivalents at
beginning of year 428,085 364,547 315,709
Cash and cash equivalents at
end of year $251,812 $428,085 $364,547
Supplemental disclosures
of cash flow information:
Cash paid during the year for
interest $127,134 $133,535 $139,371
The accompanying Notes to Financial Statements are an integral part of these
Financial Statements.<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
Note 1 - Partnership Organization and Operations
Pioneer Western Properties Income Fund Limited Partnership (the Partnership),
a Florida limited partnership, was formed in August 1986. The purpose of the
Partnership is to purchase and operate existing income producing residential
properties through the year ended December 31, 2036, unless terminated
earlier in accordance with provisions of the partnership agreement. Prior to
January 1989, the General Partners were Pioneer Western Properties
Corporation (PWPC), the Corporate General Partner, and Joseph A. Barringer,
the Individual General Partner. Mr. Barringer withdrew as the Individual
General Partner in January 1989 and assigned his general partner interest to
PWPC. On March 19, 1991, Enstar Financial Services, Inc. sold 100% of the
outstanding stock of Pioneer Western Properties Corporation, the
Partnership's Corporate General Partner, to Edgemark Group, Inc. (formerly
Edgemark, Inc.).
On December 30, 1986, the Securities and Exchange Commission declared the
Partnership's registration statement, which contemplated the sale of $10
million in limited partner interests, to be effective. In April 1987, the
Partnership reached the minimum of 6,000 units sold and commenced its
operations. The offering period ended in October 1988 with 22,309 units sold
and proceeds of $5,567,250.
Effective January 1, 1996, the General Partner engaged LEDIC Management
Group, Inc. as the primary property management company for the Partnership's
properties. LEDIC will receive 4% of monthly gross receipts for its
management services.
Note 2 - Summary of Significant Accounting Policies
The Partnership's accounting records are maintained on an accrual basis of
accounting in accordance with generally accepted accounting principles.
Profits and losses of the Partnership, other than those attributable to
capital items or the disposition of substantially all of the Partnership's
property, are allocated 95% to the limited partners and 5% to the general
partners. Profits and losses of the Partnership attributable to capital
items or the disposition of substantially all of the Partnership's property
are to be distributed as follows: (1) to previously allocated tax loss from
sale; (2) to limited partners in an amount equal to the excess of cash
available for distribution received by them over the taxable income from
operations allocated to them; (3) to the limited partners in an amount equal
to the excess of the 8% cumulative priority return to which they are entitled
over the cash available for distribution received by them; (4)to the general<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
partners in an amount equal to the excess of the cash available for
distribution received by them over the taxable income from operations
allocated to them; (5) 80% to the limited partners and 20% to the general
partners.
Cash available for distribution will be paid 99% to the limited partners and
1% to the general partners until the limited partners have received their 8%
annual priority return, and 95% to the limited partners and 5% to the general
partners, thereafter.
Investments in Real Estate
Apartment buildings and furnishings are stated at cost less accumulated
depreciation. The buildings and improvements are depreciated on a straight
line basis over a forty year period; the furnishings are depreciated on
straight line and 150 percent declining balance methods over a ten year
period; and the property improvements are depreciated on a straight line
basis over a twenty year period.
Cash and Cash Equivalents
The Partnership considers all short term highly liquid instruments purchased
with a maturity of three months or less to be cash equivalents.
Other Assets
The Partnership's other assets are comprised of the following:
December 31,
1995 1994
Accounts receivable $ - $ 5,227
Interest receivable 3,450 -
Rent receivables 15,121 12,654
Escrow deposits 18,801 18,040
Prepaid insurance 6,747 6,810
Deferred loan cost 189 -
$ 44,308 $ 42,731
Uncollectible rent receivables of $57,346 and $35,161 were written off
against rental income in 1995 and 1994, respectively.
Syndication Costs
Syndication and offering costs were charged against limited partners equity
at inception of the Partnership.<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Fair Value of Financial Instruments
During 1995, the Partnership implemented Statement of Financial Accounting
Standard #107, Disclosures About the Fair Value of Financial Instruments.
The carrying value of accounts other than mortgages on real estate
approximate their fair market values due to the short-term maturities of
those instruments. The fair value of the mortgages on real estate were
estimated by discounting the future cash flows using rates currently
available for mortgages of similar terms and maturities. At December 31,
1995, the mortgages on real estate had a carrying value of $1,277,164 and a
fair value of $1,312,061.
Investments
Investments are comprised of United States Treasury Notes yielding 4.63% and
maturing February 1996. The investments are considered to be held-to-maturity
due to their nature and are carried at amortized cost.
Note 3 - Real Estate and Accumulated Depreciation
Gross Amount at Which Carried
at December 31, 1995
Buildings and Related Accumulated
Description Land Personal Property Total Depreciation
Creek Ridge Apartments
Knoxville, Tennessee $ 230,000 $1,929,474 $2,159,474 $ 489,879
Foxwood Apartments
Augusta, Georgia 315,000 2,603,095 2,918,095 613,242
Pleasant Terrace Apartments
Knoxville, Tennessee 135,000 1,204,739 1,339,739 279,034
Total $ 680,000 $5,737,308 $6,417,308 $1,382,155
The aggregate cost of the real estate and related accumulated depreciation
for federal income tax purposes at December 31, 1995 is $6,417,308 and
$1,945,590, respectively.<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE 4 - Mortgages on Real Estate
On October 1, 1987, the Partnership obtained a "first mortgage note" on Creek
Ridge Apartments located in Knoxville, Tennessee. The $850,000 note bears
interest at a rate of 10.125%. Monthly principal and interest payments of
$7,799 are payable through October 1, 1997, and the note requires one final
payment of the entire unpaid principal sum on November 1, 1997. The note is
secured by a deed of trust encumbering the real estate and is guaranteed by
the Corporate General Partner and Joseph A. Barringer (See Note 1). The
balance on the Creek Ridge note was $754,996 and $771,236 at December 31,
1995 and 1994, respectively.
The Partnership purchased the Foxwood Apartments in Augusta, Georgia, subject
to a "first mortgage note" in an amount equal to the unpaid principal balance
on the closing date of $866,403. This fully amortizing note, which is
secured by the property, bears interest at 9.0% per annum and is payable in
monthly installments of $8,855 until final maturity in 2002. The total debt
balance related to Foxwood was $522,168 and $578,642 at December 31, 1995 and
1994, respectively.
Aggregate principal payments due in each of the next five years and
thereafter on mortgages payable are as follows:
1996 79,734
1997 804,600
1998 73,905
1999 80,837
2000 88,420
Thereafter 149,668
$1,277,164
Reconciliation of Mortgages on Real Estate:
1995 1994
Balance at beginning of year $1,349,878 $1,416,191
Payments of principal ( 72,714) ( 66,313)
Balance at end of year $1,277,164 $1,349,878
<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE 5 - Income Taxes
No provision has been made for income taxes as the tax effect of the
Partnership's activities accrues to the partners.
The Partnership's income tax returns have not been examined by tax
authorities and amounts reported may be reviewed at a later date by such
authorities. Under federal and state income tax laws, regulations and
administrative rulings, certain types of transactions may be given varying
interpretations and, accordingly, Partnership amounts reported could be
changed as a result of such review.
The net income and the partners' capital included in the tax return of the
Partnership is computed in accordance with federal income tax statutes, which
do not necessarily conform to generally accepted accounting principles. A
reconciliation of Partnership net income and partners' capital per the
accompanying financial statements to the Partnership net income and partners'
capital included in the Partnership's tax return is set forth below:
Reconciliation of Net Income to the Tax Return
For the Year Ended December 31, 1995
Limited General
Partners Partners Combined
Net income per financial
statements $146,594 $ 7,715 $154,309
Additional depreciation for
tax purposes ( 46,775) ( 2,462) ( 49,237)
Net income per tax return $ 99,819 $ 5,253 $105,072
<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Reconciliation of Partners' Capital to the Tax Return
For the Year Ended December 31, 1995
Limited General
Partners Partners Combined
Partners' capital
per financial statements $4,105,948 $22,998 $4,128,946
Cumulative additional depre-
ciation for tax purposes ( 535,263) ( 28,172) ( 563,435)
Commissions and underwriting
fee on sale of Partnership
interests 546,506 - 546,506
Offering costs 128,770 - 128,770
Partners' capital (deficit)
per tax return $4,245,961 ($ 5,174) $4,240,787
NOTE 6 - Commitments and Contingencies:
In November 1994, the Partnership received an unfavorable ruling related to
litigation surrounding a fire at Creek Ridge Apartments. As of December 31,
1995, the remaining settlement amount totaled $50,000 and has been accrued.
The Partnership has also accrued an additional $75,000 for separate pending
litigation of the same nature. These amounts will be covered by the
Partnership's insurance and, accordingly, an insurance receivable for these
amounts has been recorded at December 31, 1995.
NOTE 7 - Related Party Transactions
The Partnership incurred $10,844 and $11,028 in partnership management fees
for services provided by the Corporate General Partner for the years ended
December 31, 1995 and 1994, respectively. Edgemark Management Corporation,
an affiliate of the Corporate General Partner, earned property and
construction management fees in the amount of $54,221 and $58,186 from the
Partnership during 1995 and 1994, respectively.<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 251812
<SECURITIES> 199386
<RECEIVABLES> 125000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 5737308
<DEPRECIATION> 1382155
<TOTAL-ASSETS> 5655659
<CURRENT-LIABILITIES> 0
<BONDS> 1277164
0
0
<COMMON> 0
<OTHER-SE> 4128946
<TOTAL-LIABILITY-AND-EQUITY> 5655659
<SALES> 0
<TOTAL-REVENUES> 1100606
<CGS> 0
<TOTAL-COSTS> 819724
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 126573
<INCOME-PRETAX> 154309
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 154309
<EPS-PRIMARY> 6.57
<EPS-DILUTED> 6.57
</TABLE>
