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, 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 March 31, At December 31,
1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash and cash equivalents $1,036,175 $1,060,585
Prepaid expenses -- 50,754
- --------------------------------------------------------------------------------
Total Assets $1,036,175 $1,111,339
================================================================================
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 86,862 $ 92,716
Due to affiliates 22,000 22,000
-------------------------------
Total Liabilities 108,862 114,716
-------------------------------
Partners' Capital:
General Partner -- --
Limited Partners (4,827,500 units outstanding) 927,313 996,623
-------------------------------
Total Partners' Capital 927,313 996,623
- --------------------------------------------------------------------------------
Total Liabilities and Partners' Capital $1,036,175 $1,111,339
================================================================================
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
For the three months ended March 31, 1999
General Limited
Partner Partners Total
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at December 31, 1998 $ -- $996,623 $996,623
Net Loss -- (69,310) (69,310)
- --------------------------------------------------------------------------------
Balance at March 31, 1999 $ -- $927,313 $927,313
================================================================================
</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
For the three months ended March 31,
1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
Income
Rental $ -- $ 980,106
Interest and other income 12,526 68,500
-------------------------
Total Income 12,526 1,048,606
- --------------------------------------------------------------------------------
Expenses
Payroll -- 282,302
Rent and utilities -- 275,356
General and administrative 81,836 197,089
Supplies -- 89,081
Repairs and maintenance -- 71,167
Real estate taxes -- 38,187
Travel and entertainment -- 4,508
-------------------------
Total Expenses 81,836 957,690
- --------------------------------------------------------------------------------
Net Income (Loss) $ (69,310) $ 90,916
================================================================================
Net Income (Loss) Allocated:
To the General Partner $ -- $ --
To the Limited Partners (69,310) 90,916
- --------------------------------------------------------------------------------
$ (69,310) $ 90,916
================================================================================
Per limited partnership unit
(4,827,500 outstanding) $ (.01) $ .02
- --------------------------------------------------------------------------------
</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
For the three months ended March 31,
1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows From Operating Activities
Net Income (Loss) $ (69,310) $ 90,916
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 32,667
Accounts payable and accrued expenses (5,854) 67,982
Deferred rent payable -- 11,349
Due to affiliates -- 27
Security deposits payable -- (232)
-------------------------
Net cash provided by (used for) operating activities (24,410) 202,709
- --------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (24,410) 202,709
Cash and cash equivalents, beginning of period 1,060,585 5,320,317
- --------------------------------------------------------------------------------
Cash and cash equivalents, end of period $1,036,175 $ 5,523,026
================================================================================
</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 March 31, 1999 and the results of
operations for the three months ended March 31, 1999 and 1998, cash flows for
the three months ended March 31, 1999 and 1998 and the statement of changes in
partners' capital for the three months ended March 31, 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. The remaining
reserves will be used to pay the Partnership's liabilities and expenses through
the liquidation of the Partnership. If any proceeds remain, the Partnership will
make another distribution upon liquidation. The General Partner is in the
process of winding up the Partnership's affairs and expects to dissolve the
Partnership during 1999.
At March 31, 1999, the Partnership had cash and cash equivalents of $1,036,175
compared to $1,060,585 at December 31, 1998. The decrease represents expenses
generated by operating activities, and is down primarily due to the sale of
Ocean House.
Accounts payable and accrued expenses were $86,862 at March 31, 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 increase in certain accruals.
Results of Operations
- ---------------------
Partnership operations resulted in net loss of $69,310 for the three months
ended March 31, 1999, compared to $90,916 net income for the three months ended
March 31, 1998. The decrease is primarily a result of the sale of the
Partnership's four properties in 1997 and 1998, which resulted in a gain on sale
of properties of $13,912,265 in the 1997 and 1998 periods.
There was no rental income for the three months ended March 31, 1999, compared
to $980,106 for the corresponding period in 1998. The decrease is due to the
sale of the last property on October 13, 1998.
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 three months ended March 31, 1999 and 1998, Ocean House reported average
occupancy of -0-% and 95%, respectively.
<PAGE>
7
SENIOR INCOME FUND L.P.
AND CONSOLIDATED PARTNERSHIP
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: May 13, 1999 BY: /s/Michael T. Marron
----------------------------------
Name: Michael T. Marron
Title: Director, President and Chief
Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Mar-31-1999
<CASH> 1,036,175
<SECURITIES> 000
<RECEIVABLES> 000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 000
<DEPRECIATION> 000
<TOTAL-ASSETS> 1,036,175
<CURRENT-LIABILITIES> 86,862
<BONDS> 000
000
000
<COMMON> 000
<OTHER-SE> 927,313
<TOTAL-LIABILITY-AND-EQUITY> 1,036,175
<SALES> 000
<TOTAL-REVENUES> 12,526
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 81,836
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> (69,310)
<INCOME-TAX> 000
<INCOME-CONTINUING> (69,310)
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (69,310)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
