United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 1998
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: 33-9921
SENIOR INCOME FUND L.P.
Exact Name of Registrant as Specified in its Charter
Delaware 13-3392077
State or Other Jurisdiction of
Incorporation or Organization I.R.S. Employer Identification No.
3 World Financial Center, 29th Floor,
New York, NY Attn.: Andre Anderson 10285-2900
Address of Principal Executive Offices Zip Code
(212) 526-3237
Registrant's Telephone Number, Including Area Code
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 ____
Consolidated Balance Sheets
At March 31, At December 31,
1998 1997
Assets
Real estate assets held for disposition $ 21,542 $ 21,542
Cash and cash equivalents 5,523,026 5,320,317
Prepaid expenses 172,200 204,867
Total Assets $ 5,716,768 $ 5,546,726
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 248,174 $ 180,192
Deferred rent payable 1,247,913 1,236,564
Due to affiliates 62,000 61,973
Security deposits payable 56,599 56,831
Total Liabilities 1,614,686 1,535,560
Partners' Capital:
General Partner _ _
Limited Partners
(4,827,500 units outstanding) 4,102,082 4,011,166
Total Partners' Capital 4,102,082 4,011,166
Total Liabilities and Partners'Capital $ 5,716,768 $ 5,546,726
Consolidated Statement of Partners' Capital
For the three months ended March 31, 1998
General Limited
Partner Partners Total
Balance at December 31, 1997 $ _ $ 4,011,166 $ 4,011,166
Net income _ 90,916 90,916
Balance at March 31, 1998 $ _ $ 4,102,082 $ 4,102,082
Consolidated Statements of Operations
For the three months ended March 31, 1998 1997
Income
Rental $ 980,106 $ 2,824,863
Interest and other 68,500 56,982
Total Income 1,048,606 2,881,845
Expenses
Payroll 282,302 786,401
General and administrative 197,089 527,741
Rent and utilities 275,356 413,232
Supplies 89,081 272,267
Repairs and maintenance 71,167 126,001
Real estate taxes 38,187 98,391
Travel and entertainment 4,508 4,578
Loss on real estate assets held for disposition _ 48,000
Total Expenses 957,690 2,276,611
Net Income $ 90,916 $ 605,234
Net Income Allocated:
To the General Partner $ _ $ 6,052
To the Limited Partners 90,916 599,182
$ 90,916 $ 605,234
Per limited partnership unit
(4,827,500 outstanding) $.02 $.12
Consolidated Statements of Cash Flows
For the three months ended March 31, 1998 1997
Cash Flows From Operating Activities
Net Income $ 90,916 $ 605,234
Adjustments to reconcile net income to net cash
provided by operating activities:
Loss on real estate assets held for disposition _ 48,000
Increase (decrease) in cash arising from changes in
operating assets and liabilities
Prepaid expenses 32,667 45,227
Accounts payable and accrued expenses 67,982 (622,863)
Deferred rent payable 11,349 11,349
Due to affiliates 27 42,422
Security deposits payable (232) (5,500)
Net cash provided by operating activities 202,709 123,869
Cash Flows From Investing Activities
Additions to real estate _ (48,000)
Net cash used for investing activities _ (48,000)
Cash Flows From Financing Activities
Distributions paid to partners _ (365,720)
Net cash used for investing activities _ (365,720)
Net increase (decrease) in cash and
cash equivalents 202,709 (289,851)
Cash and cash equivalents, beginning of period 5,320,317 4,104,695
Cash and cash equivalents, end of period $5,523,026 $3,814,844
Notes to the Consolidated Financial Statements
The unaudited financial statements should be read in conjunction
with the Partnership's annual 1997 audited financial statements
within Form 10-K.
The unaudited financial statements include all normal and
reoccurring adjustments which are, in the opinion of management,
necessary to present a fair statement of financial position as of
March 31, 1998 and the results of operations and cash flows for
the three months ended March 31, 1998 and 1997 and the statement
of partners' capital for the three months ended March 31, 1998.
Results of operations for the period are not necessarily
indicative of the results to be expected for the full year.
No significant events have occurred subsequent to fiscal year
1997, and no material contingencies exist which would require
disclosure in this interim report per Regulation S-X, Rule 10-01,
Paragraph (a)(5).
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
On June 9, 1997, the Partnership executed an agreement with an
unaffiliated third party, MBK Senior Properties, Ltd. (the
"Buyer"), to sell the Partnership's four Properties (the "Sale")
for $36,300,000, subject to adjustments and prorations for
closing costs, and a credit for the cost to repair earthquake
damage at the Ocean House property. On August 1, 1997, the
Partnership closed the Sale for three of the four Properties _
Prell Gardens, Nohl Ranch and Pacific Inn, for net proceeds of
$30,148,357. The sale of the Partnership's fourth property,
Ocean House, is subject to the satisfaction of certain conditions
of the buyer and approval of certain building repairs by the City
of Santa Monica. Although there have been unexpected delays, it
is anticipated that the sale of Ocean House will occur during
1998. In the meantime, the Partnership will continue to operate
the property and generate rental income from operations.
As a result of the Sale, the Partnership suspended the payment of
quarterly cash distributions beginning with the second quarter 1997
distribution which would have been paid on or about
August 15, 1997. On August 25, 1997, the Partnership paid a cash
distribution in the amount of $5.75 per Unit, representing proceeds
from the sale of Prell Gardens, Nohl Ranch, and Pacific Inn and
cash flow from operations for the second quarter of 1997. Since
inception, limited partners have received cash distributions
totaling $11.235 per $10.00 Unit.
Upon completion of the sale of Ocean House, the General Partner
will distribute the net proceeds from the sale together with the
Partnership's remaining cash reserves (after payment of, or
provision for, the Partnership's liabilities and expenses, and
establishment of a reserve for contingencies, if any) and
dissolve the Partnership in accordance with the Partnership
Agreement. However, the timing and amount of the final
distribution is subject to operations at Ocean House, the timing
of the closing of the Ocean House sale, closing adjustments and
other factors, all of which remain uncertain. While it is
anticipated that the sale of Ocean House will be completed during
1998, there can be no assurance that the sale will be
consummated, or that a sale, if completed, will result in any
particular level of net sales proceeds.
In anticipation of the Sale the Properties were reclassified on the
consolidated balance sheet as of December 31, 1996, as "Real estate
assets held for disposition."
At March 31, 1998, the Partnership had cash and cash equivalents
of $5,523,026 compared to $5,320,317 at December 31, 1997. The
increase is primarily due to the discontinuation of cash
distributions.
Prepaid expenses were $172,200 at March 31, 1998 compared to
$204,867 at December 31, 1997. The decrease is mainly due to the
timing of property insurance payments.
Accounts payable and accrued expenses were $248,174 at
March 31, 1998 compared to $180,192 at December 31, 1997. The
change is primarily due to the timing of pre-paid rents and audit
expenses and, to a lesser extent, increased legal fees associated
with the sale of the last property and the liquidation of the
Partnership.
On November 21, 1996, the Partnership purchased the general
partnership interest of the successor to AFP-II for a purchase
price of $850,000. The Partnership's purchase of the general
partnership interest was funded from cash reserves. As a result
of such purchase, the Property Partnership's assets were
distributed to the Partnership and the Property Partnership was
dissolved. Accordingly, all sale proceeds received upon a sale
of any property belong to the Partnership and no amount is owed
to AFP-II.
Results of Operations
Partnership operations resulted in net income of $90,916 for the
three months ended March 31, 1998, compared to $605,234 for the
three months ended March 31, 1997. The decrease is primarily due
to lower rental income and total expenses as a result of the sale
of three of the Partnership's four properties in 1997, slightly
offset by an increase in interest income.
Rental income for the three months ended March 31, 1998 was
$980,106 compared to $2,824,863 for the corresponding period in
1997. The decrease is due to the sale of three of the Properties
on August 1, 1997. Rental income for the quarter ended March 31,
1998 at Ocean House increased by 5% over the same period last
year primarily as a result of increased rental rates on new
leases.
As a result of the sale of three of the Partnership's Properties
on August 1, 1997, all expense categories decreased from March
31, 1997 to March 31, 1998.
Loss on real estate held for disposition was $0 for the three
months ended March 31, 1998 compared to $48,000 for the same
period in 1997. The 1997 amount represents costs associated with
balcony restoration at Ocean House which were expensed through
the loss provision in compliance with Statement of Financial
Accounting Standards No. 121.
For the three months ended March 31, 1998 and 1997, Ocean House
reported average occupancy of 95% and 96%, respectively.
Part II Other Information
Items 1-5 Not applicable.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits -
(27) Financial Data Schedule
(b) Reports on Form 8-K - No reports on Form 8-K
were filed during the three month period covered by
this report.
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<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-END> Mar-31-1998
<CASH> 5,523,026
<SECURITIES> 000
<RECEIVABLES> 000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 5,695,226
<PP&E> 21,542
<DEPRECIATION> 000
<TOTAL-ASSETS> 5,716,768
<CURRENT-LIABILITIES> 366,773
<BONDS> 000
<COMMON> 000
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<OTHER-SE> 4,102,082
<TOTAL-LIABILITY-AND-EQUITY> 5,716,768
<SALES> 980,106
<TOTAL-REVENUES> 1,048,606
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<TOTAL-COSTS> 760,601
<OTHER-EXPENSES> 197,089
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<INCOME-PRETAX> 90,916
<INCOME-TAX> 000
<INCOME-CONTINUING> 90,916
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> 90,916
<EPS-PRIMARY> .02
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