<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended JUNE 30, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
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 (IRS Employer Identification #)
incorporation or organization)
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 June 30, 1996
UNITS OF LIMITED PARTNERSHIP 22,309
INTEREST: $250.00 PER UNIT
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PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
INDEX
Page Number
PART I FINANCIAL INFORMATION
Item 1. The Partnership's Financial Statements
Balance Sheets as of June 30, 1996 and 3
December 31, 1995
Statements of Income for the six months 4
ended June 30, 1996 and 1995
Statements of Income for the three months 5
ended June 30, 1996
Statements of Changes in Partners' 6
Capital for the period December 31, 1994
to June 30, 1996
Statements of Cash Flows for the six 7-8
months ended June 30, 1996 and 1995
Notes to Financial Statements 9-11
Item 2. Management's Discussion and Analysis of 12-13
Financial Condition and Results of Operations
PART II OTHER INFORMATION 13
Signatures 14
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PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
BALANCE SHEETS
June 30, December 31,
1996 1995
(unaudited)
Assets
Investments in real estate:
Land $ 680,000 $ 680,000
Buildings and furnishings,
net of accumulated depreciation
of $1,472,005 and $1,382,155 4,281,309 4,355,153
4,961,309 5,035,153
Cash and cash equivalents 159,442 251,812
Investment securities (held-
to-maturity) 164,119 199,386
Insurance receivable 125,000 125,000
Other assets 153,801 44,308
$5,563,671 $5,655,659
Liabilities and Partners' Capital
Liabilities:
Accounts payable and
accrued expenses $ 111,053 $ 88,879
Accrued litigation reserve 125,000 125,000
Tenant security deposits 39,132 35,670
Mortgages on real estate 1,200,000 1,277,164
Total liabilities 1,475,185 1,526,713
Partners' Capital:
General partner 24,975 22,998
Limited partners 4,063,511 4,105,948
Total partners' capital 4,088,486 4,128,946
$5,563,671 $5,655,659
See Notes to Financial Statements.
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PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
STATEMENTS OF INCOME
Six Months Ended June 30,
1996 1995
(unaudited) (unaudited)
Revenues:
Rental income $532,362 $539,671
Interest 10,737 7,360
543,099 547,031
Expenses:
Rental property operating
expenses 283,815 287,483
General and administrative
expenses 21,507 19,029
Depreciation 89,850 83,448
Interest expense 61,011 64,131
456,183 454,091
Income before extraordinary
item 86,916 92,940
Extraordinary item - loss from
early extinguishment of debt (27,376) -
Net income $ 59,540 $ 92,940
Net income allocable to:
General partner $ 2,977 $ 4,647
Limited partners $ 56,563 $ 88,293
Earnings (loss) per limited partnership
unit (based on an average
22,309 limited partnership
units each period):
Income before
extraordinary item $ 3.70 $ 3.96
Extraordinary item $ (1.17) $ -
Net income $ 2.53 $ 3.96
See Notes to Financial Statements.
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PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
STATEMENTS OF INCOME
Three Months Ended June 30,
1996 1995
(unaudited) (unaudited)
Revenues:
Rental income $264,839 $269,343
Interest 3,477 4,409
268,316 273,752
Expenses:
Rental property operating
expenses 143,088 146,813
General and administrative
expenses 11,228 8,932
Depreciation 44,925 41,724
Interest expense 30,396 31,859
229,637 229,328
Income before
extraordinary item 38,679 44,424
Extraordinary item - loss from
early extinguishment of debt (27,376) -
Net income $ 11,303 $ 44,424
Net income allocable to:
General partner $ 565 $ 2,221
Limited partners $ 10,738 $ 42,203
Earnings (loss) per limited partnership
unit (based on an average
22,309 limited partnership
units each period):
Income before
extraordinary item $ 1.65 $ 1.90
Extraordinary item $ (1.17) $ -
Net income $ .48 $ 1.90
See Notes to Financial Statements.
<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE PERIOD FROM DECEMBER 31, 1994 TO June 30, 1996
Limited General
Partners Partner Combined
Balance at December 31, 1994 $4,157,355 $ 17,283 $4,174,638
Distributions ($8.88 per avg
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
Distributions ($2.24 per avg
limited partnership unit) ( 99,000) ( 1,000) ( 100,000)
Net income 56,563 2,977 59,540
Balance at June 30, 1996 $4,063,511 $ 24,975 $4,088,486
See Notes to Financial Statements.
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PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
Six Months Ended June 30,
1996 1995
(unaudited) (unaudited)
Operating activities:
Net income $ 59,540 $ 92,940
Adjustments to reconcile net
income to net cash provided
by operating activities:
Extraordinary item 27,376 -
Depreciation 89,850 83,448
Changes in assets and
liabilities:
Other assets (54,058) (8,044)
Accounts payable and
accrued expenses 22,174 44,298
Tenant security deposits 3,462 5,640
Total adjustments 88,804 125,342
Net cash provided by
operating activities 148,344 218,282
Investing activities:
Capital additions (16,006) (24,165)
Purchase of debt securities (164,119) (197,544)
Maturity of debt securities 199,386 -
Net cash provided by
(used in) investing
activities 19,261 (221,709)
(continued on next page)
<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS -- continued
Six Months Ended June 30,
1996 1995
(unaudited) (unaudited)
Financing activities:
Proceeds from mortgage
refinancing, net of loan fees 1,144,565 -
Premiums on early
extinguishment of debt (27,376) -
Principal payments on mortgages (1,277,164) ( 35,519)
Distributions to partners (100,000) (100,000)
Net cash used in financing
activities (259,975) (135,519)
Net decrease in cash
and cash equivalents (92,370) (138,946)
Cash and cash equivalents:
Beginning of period 251,812 428,085
End of period $ 159,442 $ 289,139
Supplemental disclosures
of cash flow information:
Cash paid during the period for
interest $ 63,286 $ 64,405
See Notes to 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. 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.
The purpose of the Partnership is to purchase and operate
existing income producing multi-family residential properties in
the Southeastern United States through the year ended
December 31, 2036, unless terminated earlier in accordance with
provisions of the partnership agreement. On March 19, 1991,
Enstar Financial Services, Inc. sold 100% of the outstanding
stock of Pioneer Western Properties Corporation (PWPC), the
Partnership's Corporate General Partner, to Edgemark Group, Inc.
The Corporate General Partner retained its existing management
and is headquartered in the Clearwater, Florida area.
Note 2 - Summary of Significant Accounting Policies
Use of Estimates
The process of preparing financial statements in conformity with
generally accepted accounting principles requires the use of
estimates and assumptions regarding certain types of assets,
liabilities, revenues, and expenses. Such estimates primarily
relate to unsettled transactions and events as of the date of the
financial statements. Accordingly, upon settlement, actual
results may differ from estimated amounts.
<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Allocations and Distributions
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 partner. 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 partner 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 partner.
Cash available for distribution will be paid 99% to the limited
partners and 1% to the general partner until the limited partners
have received their 8% annual priority return, and 95% to the
limited partners and 5% to the general partner, 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 method over 40 years; furnishings
are depreciated on straight line and declining balance methods
over 10 years; and property improvements are depreciated on a
straight line method over 20 years.
Cash Equivalents
The Partnership considers all short-term highly liquid
instruments with an original maturity of three months or less
when purchased to be cash equivalents.
Income Taxes
No provision has been made for income taxes since the tax effect
of the Partnership's activities accrues to the partners.
<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
Note 3 - Debt
In April 1996, the Partnership completed a refinancing of the
mortgage debt on Creek Ridge Apartments which had a substantial
principle payment maturing on November 1, 1997. The net proceeds
were as follows (in thousands):
Amount of new debt $1,200
Payoff "old" mortgage
including premiums
and accrued interest (761)
Loan fees and escrow (79)
$ 360
The net proceeds of approximately $360,000 plus other available
funds were used to payoff the mortgage debt on Foxwood
Apartments. The amount of the mortgage debt on Foxwood
Apartments that was extinguished early was approximately $497,000
plus approximately $19,000 in premiums and $3,000 of accrued
interest. The new mortgage debt on Creek Ridge Apartments is
payable in monthly installments of principal and interest through
May 1, 2016 (20 years); is collateralized by real property; and
is subject to prepayment penalties.
Note 4 - Commitments and Contingencies
In November 1994, the Partnership received an unfavorable ruling
related to litigation surrounding a fire at Creek Ridge
Apartments. As of June 30, 1996, 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 June 30, 1996.
<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Analysis of Financial Condition
The following discussion provides general information regarding
the Partnership and operations during the three months ended
June 30, 1996 and 1995.
The Partnership's business is to make investments in existing
income producing multi-family residential properties in the
southeastern United States. 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.
As of June 30, 1996, 89% of the Partnership's total assets were
invested in the Partnership's real estate portfolio which
consisted of Creek Ridge Apartments located in Knoxville,
Tennessee; Foxwood Apartments located in Augusta, Georgia; and
Pleasant Terrace Apartments located in Knoxville, Tennessee.
Results of Operations
The Partnership produced gross rental income of $264,839 during
the three months ended June 30, 1996 compared to gross rental
income of $269,343 during the same period of 1995. Related
operating and administrative expenses were $154,316 and $155,745
for the three months ended June 30, 1996 and 1995, respectively.
Net rental income decreased approximately 2.7% to $110,523 for
the three months ended June 30, 1996 from $113,598 for the same
period in 1995.
Depreciation and amortization increased to $44,925 for the three
months ended June 30, 1996 from $41,724 for the same period in
1995. Interest expense decreased to $30,396 for the three months
ended June 30, 1996 from $31,859 for the same period in 1995 as a
result of amortizing principal loan balances.
The Partnership's properties maintained stable occupancy rates
during the three months ended June 30, 1996 as overall occupancy
averaged approximately 89%.
<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- CONTINUED
Income before extraordinary item and cash flows provided by
operations for the six months ended June 30, 1996 were $86,916
and $148,344, respectively, compared with a net income of $92,940
and operating cash flow of $218,282 during the same period in
1995.
Results for the six months ended June 30, 1996 included an
extraordinary loss in the amount of $27,376 related to a mortgage
debt refinancing and early extinguishment of existing mortgage
debts.
Liquidity and Capital Resources
The refinancing completed in April 1996 provided the Partnership
with approximately 72% of the funds necessary to extinguish early
the other existing mortgage debt. The combined monthly
installments of the old mortgages were $16,654, as compared to
monthly installments of $10,037 under the new mortgage debt.
Excess Partnership capital funds were invested at money market
and United States Treasury Bill rates and are considered adequate
by management to fund the Partnership's activities including
capital improvements scheduled for the Partnership's properties.
PART II OTHER INFORMATION
No other information need be reported.
<PAGE>
PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
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
August 14,1996 By: Rand E. McNeal
Rand E. McNeal, President and CEO
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.
August 14, 1996 By: Craig D. Caldwell
Craig D. Caldwell, Director of PWPC
August 14, 1996 By: Rand E. McNeal
Rand E. McNeal, Principal Executive Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 159,442
<SECURITIES> 164,119
<RECEIVABLES> 125,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 6,433,314
<DEPRECIATION> 1,472,005
<TOTAL-ASSETS> 5,563,671
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,563,671
<SALES> 0
<TOTAL-REVENUES> 543,099
<CGS> 0
<TOTAL-COSTS> 395,172
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 61,011
<INCOME-PRETAX> 86,916
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 27,376
<CHANGES> 0
<NET-INCOME> 59,540
<EPS-PRIMARY> 2.53
<EPS-DILUTED> 2.53
</TABLE>
