<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 SEPTEMBER 30, 1997
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 September 30, 1997
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 September 30, 1997 and 3
December 31, 1996
Statements of Income for the nine months 4
ended September 30, 1997 and 1996
Statements of Income for the three months 5
ended September 30, 1997 and 1996
Statements of Changes in Partners' 6
Capital for the period December 31, 1995
to September 30, 1997
Statements of Cash Flows for the nine 7-8
months ended September 30, 1997 and 1996
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
September 30, December 31,
1997 1996
(unaudited)
Assets
Investments in real estate:
Land $ 680,000 $ 680,000
Buildings and furnishings,
net of accumulated depreciation
of $1,707,410 and $1,561,855 4,100,121 4,221,642
4,780,121 4,901,642
Cash 208,698 170,920
Marketable debt securities 175,000 168,798
Insurance receivable - 170,000
Other assets 111,412 72,288
$5,275,231 $5,483,648
Liabilities and Partners' Capital
Liabilities:
Accounts payable and
accrued expenses $ 84,504 $ 19,990
Accrued litigation reserve - 170,000
Tenant security deposits 36,570 36,751
Mortgage on real estate 1,165,722 1,185,451
Total liabilities 1,286,796 1,412,192
Partners' Capital:
General partner 29,973 28,124
Limited partners 3,958,462 4,043,332
Total partners' capital 3,988,435 4,071,456
$5,275,231 $5,483,648
See Notes to Financial Statements.
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PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
STATEMENTS OF INCOME
Nine Months Ended September 30,
1997 1996
(unaudited) (unaudited)
Revenues:
Rental income $845,333 $789,598
Interest 8,048 13,233
853,381 802,831
Expenses:
Operating 519,525 450,868
General and administrative 50,715 29,371
Depreciation 145,555 134,775
Interest 70,607 82,893
786,402 697,907
Income before extraordinary
item 66,979 104,924
Extraordinary item - loss from
early extinguishment of debt - (27,376)
Net income $ 66,979 $ 77,548
Net income allocable to:
General partner $ 3,349 $ 3,877
Limited partners $ 63,630 $ 73,671
Earnings (loss) per limited partnership
unit (based on an average
22,309 limited partnership
units each period):
Income before
extraordinary item $ 2.85 $ 4.47
Extraordinary item $ - $ (1.17)
Net income $ 2.85 $ 3.30
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 September 30,
1997 1996
(unaudited) (unaudited)
Revenues:
Rental income $275,168 $257,236
Interest 3,380 2,496
278,548 259,732
Expenses:
Operating 159,969 167,053
General and administrative 14,507 7,864
Depreciation 39,145 44,925
Interest 23,403 21,882
237,024 241,724
Net income $ 41,524 $ 18,008
Net income allocable to:
General partner $ 2,076 $ 900
Limited partners $ 39,448 $ 17,108
Earnings per limited partnership
unit (based on an average
22,309 limited partnership
units each period):
Net income $ 1.77 $ .77
See Notes to Financial Statements.
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PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE PERIOD FROM DECEMBER 31, 1995 TO September 30, 1997
Limited General
Partners Partner Combined
Balance at December 31, 1995 $4,105,948 $ 22,998 $4,128,946
Distributions ($8.88 per avg
limited partnership unit) ( 198,001) ( 2,000) ( 200,001)
Net income 135,385 7,126 142,511
Balance at December 31, 1996 4,043,332 28,124 4,071,456
Distributions ($6.66 per avg
limited partnership unit) ( 148,500) ( 1,500) ( 150,000)
Net income 63,630 3,349 66,979
Balance at September 30, 1997 $3,958,462 $ 29,973 $3,988,435
See Notes to Financial Statements.
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PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
Nine Months Ended September 30,
1997 1996
(unaudited) (unaudited)
Operating activities:
Net income $ 66,979 $ 77,548
Adjustments to reconcile net
income to net cash provided
by operating activities:
Extraordinary item - 27,376
Depreciation 145,555 134,775
Amortization of loan costs 3,696 -
Changes in assets and
liabilities:
Other assets (42,820) (45,276)
Accounts payable and
accrued expenses 64,514 39,411
Tenant security deposits (181) (126)
Total adjustments 170,764 156,160
Net cash provided by
operating activities 237,743 233,708
Investing activities:
Capital additions (24,034) (36,828)
Purchase of debt securities (175,000) (166,615)
Maturity of debt securities 168,798 199,386
Net cash used in
investing activities (30,236) (4,057)
Financing activities:
Proceeds from mortgage
refinancing - 1,200,000
Loan fees paid - (55,435)
Premiums on early
extinguishment of debt - (27,376)
Principal payments on mortgages (19,729) (1,285,395)
Distributions to partners (150,000) (150,000)
Net cash used in financing
activities (169,729) (318,206)
(continued on next page)
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PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS -- continued
Nine Months Ended September 30,
1997 1996
(unaudited) (unaudited)
Net increase (decrease) in cash 37,778 (88,555)
Cash:
Beginning of period 170,920 251,812
End of period $ 208,698 $ 163,257
Supplemental disclosures
of cash flow information:
Cash paid during the period for
interest $ 70,421 $ 82,893
In January 1997, the Partnership's insurance carrier
settled with the plaintiffs in their litigation
surrounding a fire loss at one of its properties. The
Partnership had accrued a receivable from its
insurance carrier and a liability to the plaintiffs in
the amount of $170,000 at December 31, 1996.
See Notes to Financial Statements.
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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 - Basis of Presentation
The accompanying financial statements are unaudited and have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to the Quarterly Report on Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
These financial statements should be read in conjunction with the
financial statements and notes thereto included in the Partnership's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996.
These financial statements reflect, in the opinion of management,
all adjustments necessary for a fair presentation of the interim
financial statements. All such adjustments are of a normal and
recurring nature.
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.
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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.
Income Taxes
No provision has been made for income taxes since the tax effect
of the Partnership's activities accrues to the partners.
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PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
Note 3 - 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,
1996, the remaining settlement amount totaled $50,000
and was accrued. The Partnership also accrued an
additional $120,000 for separate pending litigation
of the same nature. These amounts were covered by
the Partnership's insurance and all amounts were
settled subsequent to December 31, 1996.
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 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 September 30, 1997, 91% of the Partnership's
total assets were invested in the Partnership's
real estate portfolio which consisted of Creek
Ridge Apartments and Pleasant Terrace Apartments
located in Knoxville, Tennessee, and Foxwood
Apartments located in Augusta, Georgia.
Results of Operations
Comparison of the Three Months Ended September 30, 1997
to 1996 and Nine Months Ended September 30, 1997 to
1996
The occupancy rates of the properties during the 3 and
9 months ended September 30, 1997 compared to 1996 were
as follows:
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PIONEER WESTERN PROPERTIES INCOME FUND LIMITED PARTNERSHIP
(A Florida Limited Partnership)
3 Months 9 Months
1997 1996 1997 1996
Foxwood 96.2% 83.7% 96.2% 83.9%
Creek Ridge 93.7% 94.7% 93.2% 95.1%
Pleasant Terrace 86.9% 84.9% 88.2% 90.1%
Market rents during the 3 and 9 months ended September
30, 1997 were level with those for the same periods in
1996.
Operating expenses increased during the 3 and 9 months
ended September 30, 1997 compared to 1996 due to: (i)
refurbishing units (principally at Foxwood); (ii)
payroll; and (iii) property tax and insurance costs.
General and administrative expenses have increased
partially due to service fees for SEC filings and other
professional services.
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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
Results for the nine months ended September 30,
1996 included an extraordinary loss in the amount of
$27,376 related to the mortgage debt refinancing and
early extinguishment of existing mortgage debts.
Liquidity and Capital Resources
Excess funds are invested in government securities and
money market accounts. Such funds are considered
adequate by management for the Partnership's
activities including capital improvements.
PART II OTHER INFORMATION
No other information need be reported.
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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
November 17, 1997 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.
November 17, 1997 By: Craig D. Caldwell
Craig D. Caldwell, Director of PWPC
November 17, 1997 By: Rand E. McNeal
Rand E. McNeal, Principal Executive Officer
<PAGE>
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 208,698
<SECURITIES> 175,000
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 6,487,531
<DEPRECIATION> 1,707,410
<TOTAL-ASSETS> 5,275,231
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,275,231
<SALES> 0
<TOTAL-REVENUES> 853,381
<CGS> 0
<TOTAL-COSTS> 715,795
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 70,607
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 66,979
<EPS-PRIMARY> 2.85
<EPS-DILUTED> 2.85
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