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 June 30, 1999
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or
Transition Report Pursuant to Section 13 or 15(d)
- --------- of the Securities Exchange Act of 1934
For the Transition period from to
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Commission File Number: 33-9921
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SENIOR INCOME FUND L.P.
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Exact Name of Registrant as Specified in its Charter
Delaware 13-3392077
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State or Other Jurisdiction of I.R.S. Employer Identification No.
Incorporation Organization
3 World Financial Center, 29th Floor, 10285
New York, NY Attn.: Andre Anderson -----
- ------------------------------------- Zip code
Address of Principal Executive Offices
(212) 526-3183
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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
--- ---
<PAGE>
2
SENIOR INCOME FUND L.P.
AND CONSOLIDATED PARTNERSHIP
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
At June 30, At December 31,
1999 1998
(unaudited) (audited)
- -------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash and cash equivalents $1,001,097 $1,060,585
Accounts receivable - other 19 --
Prepaid expenses -- 50,754
- -------------------------------------------------------------------------------
Total Assets $1,001,116 $1,111,339
===============================================================================
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 77,231 $ 92,716
Due to affiliates 33,000 22,000
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Total Liabilities 110,231 114,716
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Partners' Capital:
General Partner -- --
Limited Partners (4,827,500 units outstanding) 890,885 996,623
----------------------------
Total Partners' Capital 890,885 996,623
- -------------------------------------------------------------------------------
Total Liabilities and Partners' Capital $1,001,116 $1,111,339
===============================================================================
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (UNAUDITED)
For the six months ended June 30, 1999
General Limited
Partner Partners Total
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at December 31, 1998 $ -- $ 996,623 $ 996,623
Net Loss -- (105,738) (105,738)
- -------------------------------------------------------------------------------
Balance at June 30, 1999 $ -- $ 890,885 $ 890,885
===============================================================================
</TABLE>
See accompanying notes to the consolidated financial statements.
<PAGE>
3
SENIOR INCOME FUND L.P.
AND CONSOLIDATED PARTNERSHIP
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the three months ended June 30, For the six months ended June 30,
1999 1998 1999 1998
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income
Rental $ -- $1,020,115 $ -- $2,000,221
Interest and other income 12,213 68,488 24,739 136,988
----------------------------------------------------------
Total Income 12,213 1,088,603 24,739 2,137,209
- -----------------------------------------------------------------------------------------
Expenses
Payroll -- 279,750 -- 562,052
Rent and utilities -- 276,940 -- 552,296
General and administrative 48,641 134,992 130,477 332,081
Supplies -- 91,383 -- 180,464
Repairs and maintenance -- 62,805 -- 133,972
Real estate taxes -- 38,187 -- 76,374
Travel and entertainment -- 4,210 -- 8,718
----------------------------------------------------------
Total Expenses 48,641 888,267 130,477 1,845,957
- -----------------------------------------------------------------------------------------
Net Income (Loss) $(36,428) $ 200,336 $(105,738) $ 291,252
=========================================================================================
Net Income (Loss) Allocated:
To the General Partner $ -- $ -- $ -- $ --
To the Limited Partners (36,428) 200,336 (105,738) 291,252
- -----------------------------------------------------------------------------------------
$(36,428) $ 200,336 $(105,738) $ 291,252
=========================================================================================
Per limited partnership unit
(4,827,500 outstanding) $ (.01) $ .04 $ (.02) $ .06
- -----------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to the consolidated financial statements.
<PAGE>
4
SENIOR INCOME FUND L.P.
AND CONSOLIDATED PARTNERSHIP
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the six months ended June 30,
1999 1998
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows From Operating Activities
Net Income (Loss) $ (105,738) $ 291,252
Adjustments to reconcile net income (loss) to net cash
provided by (used for) operating activities:
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Prepaid expenses 50,754 (22,609)
Accounts receivable (19) --
Accounts payable and accrued expenses (15,485) 47,317
Deferred rent payable -- 22,698
Due to affiliates 11,000 (46,973)
Security deposits payable -- 2,018
------------------------
Net cash provided by (used for) operating activities (59,488) 293,703
- -----------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (59,488) 293,703
Cash and cash equivalents, beginning of period 1,060,585 5,320,317
- -----------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $1,001,097 $5,614,020
=========================================================================================
</TABLE>
See accompanying notes to the consolidated financial statements.
<PAGE>
5
SENIOR INCOME FUND L.P.
AND CONSOLIDATED PARTNERSHIP
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The unaudited financial statements should be read in conjunction with the
Partnership's annual 1998 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 June 30, 1999 and the results of
operations for the three and six months ended June 30, 1999 and 1998, cash flows
for the six months ended June 30, 1999 and 1998 and the statement of changes in
partners' capital for the six months ended June 30, 1999. 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 1998, and no
material contingencies exist, which would require disclosure in this interim
report per Regulation S-X, Rule 10-01, Paragraph (a)(5).
<PAGE>
6
SENIOR INCOME FUND L.P.
AND CONSOLIDATED PARTNERSHIP
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 and a gain on the
sale of $11,839,814. The Partnership's fourth property, Ocean House, was sold on
October 13, 1998 to MBK Senior Living Communities, Ltd., formerly known as MBK
Senior Properties, Ltd. The gross selling price of the Property was $5,172,750,
less a credit for cost of repairs due to earthquake damages of $4,174,171,
resulting in a net selling price of $998,579, and a gain on the sale of
$2,072,451, including the assignment of the land lease obligation. The
Partnership remains contingently liable under the terms of the ground lease.
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. With the completion of the sale of
Ocean House, the Partnership made a special distribution of $1.11 per unit, on
November 17, 1998, representing the net sales proceeds and a portion of the
Partnership's cash reserves.
Although the Partnership's leasehold interest in Ocean House was sold, the
General Partner has not obtained a release from the ground lessor of the
Partnership's continuing contingent liability associated with the ground lease.
The General Partner has explored various means by which to release or protect
the Partnership from this contingent liability, and will continue to do so.
However, until this is accomplished, the General Partner expects that the
Partnership will not be terminated, and the remaining cash will continue to be
held in reserve. While the General Partner will attempt to wind up the affairs
of the Partnership and terminate it in 1999, there can be no assurance that the
General Partner will be successful in doing so.
At June 30, 1999, the Partnership had cash and cash equivalents of $1,001,097
compared to $1,060,585 at December 31, 1998. The decrease is primarily due to
the sale of the Partnership's remaining property on October 13, 1998, resulting
in no further cash flow from rental activities.
Accounts payable and accrued expenses were $77,231 at June 30, 1999 compared to
$92,716 at December 31, 1998. The change is primarily due to the timing of
property operating expense payments, management fee payments, partially offset
by an decrease in certain accruals.
Results of Operations
- ---------------------
Partnership operations resulted in net loss of $105,738 for the six months ended
June 30, 1999, compared to $291,252 net income for the six months ended June 30,
1998. The decrease is primarily a result of the sale of the last property on
October 13, 1998.
There was no rental income for the six months ended June 30, 1999, compared to
$2,000,221 for the corresponding period in 1998. The decrease is due to the sale
of the last property on October 13, 1998.
<PAGE>
7
SENIOR INCOME FUND L.P.
AND CONSOLIDATED PARTNERSHIP
Primarily as a result of the sale of Ocean House on October 13, 1998, all
expense categories decreased from the 1998 periods to the 1999 periods.
For the six months ended June 30, 1999 and 1998, Ocean House reported average
occupancy of -0-% and 98%, respectively. The decrease is due to the sale of the
last property on October 13, 1998.
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.
<PAGE>
8
SENIOR INCOME FUND L.P.
AND CONSOLIDATED PARTNERSHIP
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.
SENIOR INCOME FUND L.P.
BY: SENIOR INCOME FUND INC.
General Partner
Date: August 13, 1999 BY: /s/Michael T. Marron
------------------------------------
Name: Michael T. Marron
Title: Director and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Jun-30-1999
<CASH> 1,001,097
<SECURITIES> 000
<RECEIVABLES> 19
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 000
<DEPRECIATION> 000
<TOTAL-ASSETS> 1,001,116
<CURRENT-LIABILITIES> 77,231
<BONDS> 000
000
000
<COMMON> 000
<OTHER-SE> 890,885
<TOTAL-LIABILITY-AND-EQUITY> 1,001,116
<SALES> 000
<TOTAL-REVENUES> 24,739
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 130,477
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> (105,738)
<INCOME-TAX> 000
<INCOME-CONTINUING> (105,738)
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (105,738)
<EPS-BASIC> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>