-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OZo6BQ6WQAyVvc1oo5k2x1WBMOevaVRhr05j66gI4qW3N/4RnBxMe1IVA6rqZE8q d/5a8EJk73ipyCDr1SG2vw== 0000890566-00-000787.txt : 20000516 0000890566-00-000787.hdr.sgml : 20000516 ACCESSION NUMBER: 0000890566-00-000787 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIERRA PACIFIC DEVELOPMENT FUND CENTRAL INDEX KEY: 0000351698 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 953643693 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-11068 FILM NUMBER: 633261 BUSINESS ADDRESS: STREET 1: 5850 SAN FELIPE STREET 2: STE 500 CITY: HOUSTON STATE: TX ZIP: 77057 BUSINESS PHONE: 7137066271 MAIL ADDRESS: STREET 1: 5850 SAN FELIPE STREET 2: STE 500 CITY: HOUSTON STATE: TX ZIP: 77057 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter ended March 31, 2000 ---------------------------------------------------- Commission file number 0-11068 ---------------------------------------------------- SIERRA PACIFIC DEVELOPMENT FUND (A LIMITED PARTNERSHIP) State of California 95-3643693 - -------------------------------------- ----------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) 5850 San Felipe, Suite 450 Houston, Texas 77057 - -------------------------------------- ----------------------------------- (Address of principal executive (Zip Code) offices) Registrant's telephone number, including area code: (713) 706-6271 ----------------------------------------------- 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 [ ]. PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The following financial statements are submitted in the next pages: PAGE NUMBER ------ Consolidated Balance Sheets - March 31, 2000 and December 31, 1999 ....... 4 Consolidated Statements of Operations - For the Three Months Ended March 31, 2000 and 1999 ............................................ 5 Consolidated Statements of Changes in Partners' Equity - For the Year Ended December 31, 1999 and for the Three Months Ended March 31, 2000 ........................................................... 6 Consolidated Statements of Cash Flows - For the Three Months Ended March 31, 2000 and 1999 ............................................ 7 Notes to Consolidated Financial Statements................................ 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (a) OVERVIEW The following discussion should be read in conjunction with the Sierra Pacific Development Fund's (the Partnership) Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-Q. The Partnership currently owns a 94.92% interest in the Sierra Creekside Partnership, which operates the Sierra Creekside property (the Property) in San Diego, CA. (b) RESULTS OF OPERATIONS Rental income for the three months ended March 31, 2000 increased by approximately $15,000, or 7%, when compared to the corresponding period in the prior year, primarily due to higher occupancy and rental rates. Occupancy at the Property increased from 96% at March 31, 1999 to 100% at March 31, 2000. 2 Operating expenses for the three months ended March 31, 2000 increased by approximately $28,000, or 22%, in comparison to the same period in 1999. This increase was principally due to higher maintenance and repair costs and utilities. In addition, data processing and accounting and auditing costs rose during the quarter. Interest expense of approximately $73,000 was recorded during the first quarter compared to approximately $39,000 for the same period in the prior year. As stated below, the Partnership refinanced its mortgage loan on the Property in January 2000. An extraordinary loss of approximately $46,000 was recorded in the quarter due to the write-off of deferred loan costs associated with the payoff of the mortgage loan with Home Federal Savings. (c) LIQUIDITY AND CAPITAL RESOURCES In January 2000, the Partnership paid its loan balance of $1,669,000 to Home Federal Savings and entered into a loan agreement with General Electric Capital Corporation (GECC) in the amount of $4,250,000. The lender funded $4,050,000 at closing and held back $200,000 to be drawn upon to help finance future tenant improvements and leasing costs. The Partnership received net proceeds of $2,222,000 as a result of the new loan. The loan is secured by the Property and bears interest at 2.75% above the GECC Composite Commercial Paper Rate. Principal and interest payments are due monthly based on a 30-year amortization. The loan matures January 31, 2005. The majority of the loan proceeds were distributed to the minority owner of the property, Sierra Mira Mesa Partners (SMMP). The Partnership is in an illiquid position at March 31, 2000 with cash of approximately $82,000 and accrued and other liabilities of approximately $132,000. However, a source of cash is available through contributions from SMMP. The Partnership's primary capital requirements are for the construction of new tenant space and debt obligations. It is anticipated that these requirements will be funded from the operations of the Property, the $200,000 tenant improvement/lease commission holdback and contributions from SMMP. Inflation: The Partnership does not expect inflation to be a material factor in its operations in 2000. 3 SIERRA PACIFIC DEVELOPMENT FUND (A LIMITED PARTNERSHIP) CONSOLIDATED BALANCE SHEETS MARCH 31, 2000 AND DECEMBER 31, 1999 - --------------------------------------------------------------------------------
MARCH 31, 2000 DECEMBER 31, 1999 --------------- --------------- (UNAUDITED) ASSETS Cash and cash equivalents .................................................................... $ 82,081 $ 134,154 Receivables: Unbilled rent ............................................................................. 51,068 51,981 Billed rent ............................................................................... 0 8,640 Income-producing property - net of accumulated depreciation and valuation allowance of $3,343,695 and $3,289,481, respectively ............................................................................... 2,497,050 2,557,487 Other assets - net of accumulated amortization of $248,218 and $263,977, respectively...................................................... 315,574 238,197 Excess distributions to minority Partner ..................................................... 2,496,394 128,513 --------------- --------------- Total Assets ................................................................................. $ 5,442,167 $ 3,118,972 =============== =============== LIABILITIES AND PARTNERS' EQUITY Accrued and other liabilities ................................................................ $ 132,001 $ 64,825 Notes payable ................................................................................ 4,047,554 1,673,186 --------------- --------------- Total Liabilities ............................................................................ 4,179,555 1,738,011 --------------- --------------- Partners' equity (deficit): General Partner ............................................................................ (81,954) 0 Limited Partners: 30,000 units authorized, 29,354 issued and outstanding ........................................................................... 1,344,566 1,380,961 --------------- --------------- Total Partners' equity ....................................................................... 1,262,612 1,380,961 --------------- --------------- Total Liabilities and Partners' equity ....................................................... $ 5,442,167 $ 3,118,972 =============== ===============
SEE ACCOMPANYING NOTES 4 SIERRA PACIFIC DEVELOPMENT FUND (A LIMITED PARTNERSHIP) CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999 - --------------------------------------------------------------------------------
2000 1999 --------------- --------------- (UNAUDITED) (UNAUDITED) REVENUES: Rental income .............................................................................. $ 229,440 $ 214,772 --------------- --------------- Total revenues ..................................................................... 229,440 214,772 --------------- --------------- EXPENSES: Operating expenses ......................................................................... 154,180 126,351 Depreciation and amortization .............................................................. 81,042 86,305 Interest ................................................................................... 72,881 38,537 --------------- --------------- Total costs and expenses ........................................................... 308,103 251,193 --------------- --------------- LOSS BEFORE EXTRAORDINARY LOSS ............................................................... (78,663) (36,421) EXTRAORDINARY LOSS FROM WRITE-OFF OF DEFERRED LOAN COSTS ..................................................................... (46,020) 0 --------------- --------------- LOSS BEFORE MINORITY INTEREST'S SHARE OF CONSOLIDATED JOINT VENTURE LOSS ......................................................... (124,683) (36,421) --------------- --------------- MINORITY INTEREST'S SHARE OF CONSOLIDATED JOINT VENTURE LOSS ............................................................ 6,334 2,386 --------------- --------------- NET LOSS ..................................................................................... $ (118,349) $ (34,035) =============== =============== Per limited partnership unit: Loss before extraordinary loss ............................................................. (2.44) (1.16) Extraordinary loss ......................................................................... (1.55) 0 --------------- --------------- Net loss per limited partnership unit ........................................................ $ (3.99) $ (1.16) =============== ===============
SEE ACCOMPANYING NOTES 5 SIERRA PACIFIC DEVELOPMENT FUND (A LIMITED PARTNERSHIP) CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY FOR THE YEAR ENDED DECEMBER 31, 1999 AND FOR THE THREE MONTHS ENDED MARCH 31, 2000 - --------------------------------------------------------------------------------
LIMITED PARTNERS TOTAL ---------------------------------- GENERAL PARTNERS' PER UNIT TOTAL PARTNER EQUITY --------------- --------------- --------------- --------------- Proceeds from sale of partnership units ................................... $ 500.00 $ 14,677,000 $ 14,677,000 Underwriting commissions and other organization expenses ..................... (60.29) (1,769,862) (1,769,862) Cumulative net income (loss) (to December 31, 1999) .............................. (225.92) (6,631,704) $ 14,600 (6,617,104) Cumulative distributions (to December 31, 1999) .............................. (166.75) (4,894,473) (14,600) (4,909,073) --------------- --------------- --------------- --------------- Partners' equity - January 1, 2000 (audited) .......... 47.04 1,380,961 0 1,380,961 Cumulative adjustment of net loss allocation .......... 2.26 80,771 (80,771) 0 Net loss (unaudited) .................................. (3.99) (117,166) (1,183) (118,349) --------------- --------------- --------------- --------------- Partners' equity (deficit) - March 31, 2000 (unaudited) $ 45.31 $ 1,344,566 $ (81,954) $ 1,262,612 =============== =============== =============== ===============
SEE ACCOMPANYING NOTES 6 SIERRA PACIFIC DEVELOPMENT FUND (A LIMITED PARTNERSHIP) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999 - --------------------------------------------------------------------------------
2000 1999 --------------- --------------- (UNAUDITED) (UNAUDITED) CASH FLOWS FROM OPERATING ACTIVITIES: Net loss ................................................................................... $ (118,349) $ (34,035) Adjustments to reconcile net loss to cash (used in) provided by operating activities: Depreciation and amortization ............................................................ 81,042 86,305 Extraordinary loss from write-off of deferred loan costs ............................................................................. 46,020 0 Minority interest's share of consolidated joint venture loss ..................................................................... (6,334) (2,386) Decrease (increase) in receivables ....................................................... 9,553 (2,724) Increase in other assets ................................................................. (31,566) (11,329) Increase in accrued and other liabilities ................................................ 67,176 54,690 --------------- --------------- Net cash (used in) provided by operating activities ...................................... 47,542 90,521 --------------- --------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from note payable secured by property ........................................... 4,050,000 0 Principal payments on notes payable ...................................................... (1,675,632) (11,391) Payments on deferred loan costs .......................................................... (112,436) 0 Distributions to minority partner ........................................................ (2,361,547) 0 Loan to affiliate ........................................................................ 0 (78,000) --------------- --------------- Net cash used in financing activities .................................................... (99,615) (89,391) --------------- --------------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ...................................................................... (52,073) 1,130 CASH AND CASH EQUIVALENTS Beginning of period ...................................................................... 134,154 83,408 --------------- --------------- CASH AND CASH EQUIVALENTS End of period ............................................................................ $ 82,081 $ 84,538 =============== =============== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interest .................................................. $ 55,108 $ 38,622 =============== ===============
SEE ACCOMPANYING NOTES 7 SIERRA PACIFIC DEVELOPMENT FUND (A LIMITED PARTNERSHIP) --------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - -------------------------------------------------------------------------------- 1. ORGANIZATION In February 1994, Sierra Pacific Development Fund (the Partnership) created a general partnership (Sierra Creekside Partners) with Sierra Mira Mesa Partners (SMMP) to facilitate cash contributions by SMMP for the continued development and operation of the Sierra Creekside property (the Property). The Partnership Agreement of Sierra Creekside Partners (the Agreement) was amended effective January 1, 1995 to consider both contributions and distributions when calculating each partners' percentage interest at January 1 of each year. Accordingly, on January 1, 2000, the Partnership's interest in Sierra Creekside Partners was increased from 93.45% to 94.92% to reflect 1999 contributions and distributions. 2. BASIS OF FINANCIAL STATEMENTS The accompanying unaudited consolidated condensed financial statements include the accounts of the Partnership and Sierra Creekside Partners at March 31, 2000. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Partnership's management, these unaudited financial statements reflect all adjustments which are necessary for a fair presentation of its financial position at March 31, 2000 and results of operations and cash flows for the periods presented. All adjustments included in these statements are of a normal and recurring nature. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Annual Report of the Partnership for the year ended December 31, 1999. 3. RELATED PARTY TRANSACTIONS Included in the financial statements for the three months ended March 31, 2000 and 1999 are affiliate transactions as follows: MARCH 31 ----------------------- 2000 1999 ---------- ---------- Management fees $ 10,987 $ 9,324 Administrative fees 10,632 8,936 8 Sierra Pacific Development Fund Notes to Consolidated Financial Statements (Unaudited) Page two 4. PARTNERS' EQUITY Equity and net loss per limited partnership unit is determined by dividing the limited partners' share of the Partnership's equity and net loss by the number of limited partnership units outstanding, 29,354. Partners' equity accounts have been adjusted to reflect an allocation of cumulative net loss to the partners in accordance with the agreement of limited partnership. This agreement provides that 99% of operating income, gains, losses, deductions and credits of the Partnership shall be allocated among the limited partners and 1% be allocated to the general partner. Prior year balances have not been adjusted because management does not believe that the effects of these adjustments are significant to the prior year partners' equity balances. 9 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits The following Exhibits are filed herewith pursuant to Rule 601 of Regulation S-K. Exhibit Number Description of Exhibit - ----------- ----------------------------- 27 Financial Data Schedule (b) Reports on Form 8-K A Form 8-K was filed in April 2000 reporting a change in the Partnership's Certifying Accountant. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report be signed on its behalf by the undersigned thereunto duly authorized. SIERRA PACIFIC DEVELOPMENT FUND a Limited Partnership S-P PROPERTIES, INC. General Partner Date: MAY 10, 2000 /S/ THOMAS N. THURBER ------------ ----------------------------------------------- Thomas N. Thurber President and Director Date: MAY 10, 2000 /S/ G. ANTHONY EPPOLITO ------------ ----------------------------------------------- G. Anthony Eppolito Chief Accountant 10 EX-27 2
5 THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SIERRA PACIFIC DEVELOPMENT FUND MARCH 31, 2000 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-2000 MAR-31-2000 82,081 0 51,068 0 0 82,081 5,840,745 3,343,695 5,442,167 132,001 4,047,554 0 0 0 1,262,612 5,442,167 229,440 229,440 0 154,180 81,042 0 72,881 (118,349) 0 (72,329) 0 (46,020) 0 (118,349) (4.03) (4.03)
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