-----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, KzOAaE2kOkVTQ1QhYK9BqMrpVkola3jkgQIyR/1p2E9qNVXTLn/KckKsX3SW30qi 6++lGplxgt4FPjXrwZmtwQ== /in/edgar/work/0000890566-00-001592/0000890566-00-001592.txt : 20001115 0000890566-00-001592.hdr.sgml : 20001115 ACCESSION NUMBER: 0000890566-00-001592 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIERRA PACIFIC PENSION INVESTORS 84 CENTRAL INDEX KEY: 0000747729 STANDARD INDUSTRIAL CLASSIFICATION: [6512 ] IRS NUMBER: 330043952 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-14269 FILM NUMBER: 763743 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 0001.txt 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 September 30, 2000 ---------------------------------------------------- Commission file number 0-14269 ---------------------------------------------------- SIERRA PACIFIC PENSION INVESTORS `84 (A LIMITED PARTNERSHIP) State of California 33-0043952 - -------------------------------------- ----------------------------------- (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 Balance Sheets - September 30, 2000 and December 31, 1999 4 Statements of Operations - For the Nine Months and Three Months Ended September 30, 2000 and 1999 5 Statements of Changes in Partners' Equity - For the Year Ended December 31, 1999 and for the Nine Months Ended September 30, 2000 6 Statements of Cash Flows - For the Nine Months Ended September 30, 2000 and 1999 7 Notes to 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 Pension Investors `84's (the Partnership) Financial Statements and Notes thereto appearing elsewhere in this Form 10-Q. The Partnership currently owns one property, Sierra Valencia (the Property). In addition, the Partnership holds a 69.83% interest in Sierra Mira Mesa Partners (SMMP), which is maintained on the equity method of accounting. (b) RESULTS OF OPERATIONS Rental income for the nine months ended September 30, 2000 decreased by approximately $36,000, or 8%, when compared to the corresponding period in 1999, principally due to occupancy fluctuations. Occupancy fluctuated between 87% and 97% during the nine months ended September 30, 2000. The Property was 100% occupied for the majority of 1999. Occupancy at September 30, 2000 was 97%. The decrease in rental income was partially offset by additional billings in the third quarter related to second quarter rents. Rental income for the three months ended September 30, 2000 increased by approximately $11,000, or 7%, primarily due to these billings. 2 Interest income for the nine months ended September 30, 2000, decreased by approximately $31,000, or 20%, in comparison to the same period in the prior year. This decrease was primarily due to a $943,000 principal payment received on the Partnership's trust deed note receivable in May 1999. Interest income for the quarter ended September 30, 2000 increased by approximately $2,000 or 6%, due to higher note balances between the two periods. Operating expenses increased by approximately $27,000, or 8%, for the nine months ended September 30, 2000, principally due to the write-off of rents deemed uncollectible to bad debt expense. In addition, accounting and auditing costs rose during the period. The increase in operating expenses was partially offset by a decrease in administrative costs. Operating expenses for the quarter ended September 30, 2000 increased by approximately $39,000, or 37%, primarily due to the increase in bad debt expense and higher accounting and auditing costs. Depreciation and amortization expenses for the nine months and three months ended September 30, 2000 decreased by approximately $97,000, or 47%, and by approximately $33,000, or 47%, respectively, when compared to the corresponding period in the prior year, principally due to fully depreciated capitalized tenant improvements. The Partnership's share of unconsolidated joint venture income increased by approximately $64,000, or 26%, for the nine months ended September 30, 2000, in comparison to the same period in 1999. This increase in income generated by SMMP was in large part attributable to its share of Sorrento II Partners' (SIIP) income. SIIP, which SMMP accounts for as an unconsolidated joint venture investment on the equity method, recorded an increase in income due to, among other factors, higher common area maintenance fees recovery revenue and a decrease in ground lease expense during the nine months ended September 30, 2000. (c) LIQUIDITY AND CAPITAL The Partnership received a $943,000 principal payment on its trust deed note receivable in May 1999. These funds were principally used to satisfy the liquidity requirements of SMMP. As of September 30, 2000, the Partnership is in an illiquid position. Total cash and billed receivables amount to approximately $75,000 compared to approximately $150,000 of accrued and other liabilities. The Partnership anticipates cash required to meet debt obligations, operating expenses and costs for the construction of new tenant space will be funded from the operations of the Property and distributions from SMMP. Inflation: The Partnership does not expect inflation to be a material factor in its operations in 2000. 3 SIERRA PACIFIC PENSION INVESTORS '84 (A LIMITED PARTNERSHIP) BALANCE SHEETS SEPTEMBER 30, 2000 AND DECEMBER 31, 1999 - --------------------------------------------------------------------------------
SEPTEMBER 30, 2000 DECEMBER 31, 1999 (UNAUDITED) -------------------- -------------------- ASSETS Cash and cash equivalents ........................................................... $ 37,860 $ 31,562 Receivables: Note receivable, net of deferred gain of $132,471 ................................ 1,459,139 1,459,139 Unbilled rent .................................................................... 50,332 44,708 Billed rent ...................................................................... 36,962 2,762 Interest ......................................................................... 119,371 0 Income-producing property - net of accumulated depreciation and valuation allowance of $2,859,142 and $2,864,363, respectively ...................................................................... 1,146,740 1,174,239 Investment in unconsolidated joint venture .......................................... 7,153,053 7,303,940 Other assets - net of accumulated amortization of $182,655 and $172,144, respectively ............................................ 1,086,949 791,968 -------------------- -------------------- Total Assets ........................................................................ $ 11,090,406 $ 10,808,318 ==================== ==================== LIABILITIES AND PARTNERS' EQUITY Accrued and other liabilities ....................................................... $ 149,767 $ 122,891 Notes payable ....................................................................... 1,354,190 1,398,368 -------------------- -------------------- Total Liabilities ................................................................... 1,503,957 1,521,259 -------------------- -------------------- Partners' equity (deficit): General Partner ................................................................... (183,362) 0 Limited Partners: 80,000 units authorized, 77,000 issued and outstanding ................................................... 9,769,811 9,287,059 -------------------- -------------------- Total Partners' equity .............................................................. 9,586,449 9,287,059 -------------------- -------------------- Total Liabilities and Partners' equity .............................................. $ 11,090,406 $ 10,808,318 ==================== ====================
SEE ACCOMPANYING NOTES 4 SIERRA PACIFIC PENSION INVESTORS '84 (A LIMITED PARTNERSHIP) STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 AND FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 - --------------------------------------------------------------------------------
NINE MONTHS ENDED THREE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ---------------------------------- ---------------------------------- 2000 1999 2000 1999 (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) --------------- --------------- --------------- --------------- REVENUES: Rental income ........................................ $ 439,178 $ 475,117 $ 166,636 $ 155,246 Interest income ...................................... 119,379 149,902 39,793 37,503 --------------- --------------- --------------- --------------- Total revenues .............................. 558,557 625,019 206,429 192,749 --------------- --------------- --------------- --------------- EXPENSES: Operating expenses ................................... 358,641 331,820 144,967 106,040 Depreciation and amortization ........................ 110,324 206,907 36,367 68,874 Interest expense ..................................... 96,723 103,506 32,041 34,232 --------------- --------------- --------------- --------------- Total costs and expenses .................... 565,688 642,233 213,375 209,146 --------------- --------------- --------------- --------------- (LOSS) INCOME BEFORE GAIN FROM PROPERTY DISPOSITION ................................. (7,131) (17,214) (6,946) (16,397) GAIN FROM PROPERTY DISPOSITION ......................... 0 83,315 0 0 --------------- --------------- --------------- --------------- (LOSS) INCOME BEFORE PARTNERSHIP'S SHARE OF JOINT VENTURE INCOME ........................ (7,131) 66,101 (6,946) (16,397) PARTNERSHIP'S SHARE OF UNCONSOLIDATED JOINT VENTURE INCOME ................................. 306,521 242,939 73,317 62,722 --------------- --------------- --------------- --------------- NET INCOME ............................................. $ 299,390 $ 309,040 $ 66,371 $ 46,325 =============== =============== =============== =============== Net income per limited partnership unit ................ $ 3.85 $ 4.01 $ 0.85 $ 0.60 =============== =============== =============== ===============
SEE ACCOMPANYING NOTES 5 SIERRA PACIFIC PENSION INVESTORS '84 (A LIMITED PARTNERSHIP) STATEMENTS OF CHANGES IN PARTNERS' EQUITY FOR THE YEAR ENDED DECEMBER 31, 1999 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 - --------------------------------------------------------------------------------
LIMITED PARTNERS TOTAL ---------------------------- GENERAL PARTNERS' PER UNIT TOTAL PARTNER EQUITY ------------ ------------ ------------ ------------ Proceeds from sale of partnership units ................................................ $ 250.00 $ 19,418,250 $ 19,418,250 Underwriting commissions and other organization expenses .................................. (37.34) (2,894,014) (2,894,014) Repurchase of 665 partnership units ................................ (0.03) (151,621) (151,621) Cumulative net (loss) income (to December 31, 1998) ........................................... (75.23) (5,792,901) $ 133,334 (5,659,567) Cumulative distributions (to December 31, 1998) ........................................... (21.43) (1,650,006) (133,334) (1,783,340) ------------ ------------ ------------ ------------ Partners' equity - January 1, 1999 ................................. 115.97 8,929,708 0 8,929,708 Net income ......................................................... 4.64 357,351 357,351 ------------ ------------ ------------ ------------ Partners' equity - January 1, 2000 (audited) ....................... 120.61 9,287,059 0 9,287,059 Transfer among general partner and limited partners ................ 2.42 186,356 (186,356) 0 Net income (unaudited) ............................................. 3.85 296,396 2,994 299,390 ------------ ------------ ------------ ------------ Partners' equity (deficit) - September 30, 2000 (unaudited) ........ $ 126.88 $ 9,769,811 $ (183,362) $ 9,586,449 ============ ============ ============ ============
SEE ACCOMPANYING NOTES 6 SIERRA PACIFIC PENSION INVESTORS '84 (A LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 - --------------------------------------------------------------------------------
2000 1999 (UNAUDITED) (UNAUDITED) --------------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income ............................................................................... $ 299,390 $ 309,040 Adjustments to reconcile net income to cash used in operating activities: Depreciation and amortization .......................................................... 110,324 206,907 Partnership's share of unconsolidated joint venture income ....................................................................... (306,521) (242,939) Gain from property disposition ......................................................... 0 (83,315) Increase in rent receivable ............................................................ (39,824) (3,896) Increase in interest receivable ........................................................ (119,371) (54,110) Increase in other assets ............................................................... (333,886) (363,189) Increase (decrease) in accrued and other liabilites .................................... 26,876 (17,688) --------------- --------------- Net cash used in operating activities .................................................. (363,012) (249,190) --------------- --------------- CASH FLOWS FROM INVESTING ACTIVITIES: Payments for property additions ........................................................ (40,905) (115,726) Payments received on note receivable ................................................... 0 943,413 --------------- --------------- Net cash (used in) provided by investing activities .................................... (40,905) 827,687 --------------- --------------- CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on notes payable .................................................... (44,178) (63,928) Capital contributions to unconsolidated joint venture .................................. (43,000) 0 Distributions from unconsolidated joint venture ........................................ 497,393 0 Loan to affiliate ...................................................................... 0 (466,283) --------------- --------------- Net cash provided by (used in) financing activities .................................... 410,215 (530,211) --------------- --------------- NET INCREASE IN CASH AND CASH EQUIVALENTS .................................................. 6,298 48,286 CASH AND CASH EQUIVALENTS - Beginning of period Beginning of period .................................................................... 31,562 10,122 --------------- --------------- CASH AND CASH EQUIVALENTS - End of period End of period .......................................................................... $ 37,860 $ 58,408 =============== =============== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for real estate taxes ...................................... $ 56,324 $ 50,396 =============== =============== Cash paid during the period for interest ............................................... $ 97,329 $ 104,214 =============== ===============
SEE ACCOMPANYING NOTES 7 SIERRA PACIFIC PENSION INVESTORS `84 (A LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS (Unaudited) ------------------------------------------------------------------------ 1. BASIS OF FINANCIAL STATEMENTS In the opinion of Sierra Pacific Pension Investors `84's (the Partnership) management, these unaudited financial statements reflect all adjustments which are necessary for a fair presentation of its financial position at September 30, 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. 2. RELATED PARTY TRANSACTIONS Included in the financial statements for the nine months ended September 30, 2000 and 1999 are affiliate transactions as follows: SEPTEMBER 30 ----------------------- 2000 1999 ---------- ---------- Management fees $ 12,478 $ 13,127 Administrative fees 56,360 70,433 Construction fees 0 2,131 3. INVESTMENT IN UNCONSOLIDATED JOINT VENTURE Sierra Mira Mesa Partners (SMMP) was formed in 1985 between the Partnership and Sierra Pacific Development Fund II (SPDFII), an affiliate, to develop and operate the real property known as Sierra Mira Mesa, an office building, located in San Diego, California. The Partnership's initial ownership interest in SMMP was 49%; the remaining 51% was owned by SPDFII. Effective December 31, 1996, the general partners amended the partnership agreement to allow for adjustments in the sharing ratio each year based upon the relative net contributions and distributions since inception of each general partner. At September 30, 2000 the Partnership's interest in SMMP was 69.83%; the remaining 30.17% interest is owned by SPDFII. The consolidated financial statements of SMMP include the accounts of SMMP and Sorrento I Partners, a majority owned California general partnership. Summarized income statement information for SMMP for the nine months ended September 30, 2000 and 1999 is as follows: 8 Sierra Pacific Pension Investors '84 Notes to Financial Statements (Unaudited) Page two SEPTEMBER 30 ------------------------ 2000 1999 ----------- ----------- Rental income $ 1,608,103 $1,581,014 Total revenues 1,794,537 1,748,607 Operating expenses 692,164 546,496 Share of unconsolidated joint venture income (loss) 116,068 (50,092) Net income 425,648 358,835 As of September 30, 2000, SMMP holds a 43.92% interest in Sorrento II Partners (SIIP), a California general partnership with Sierra Pacific Institutional Properties V formed in 1993, a 5.08% interest in Sierra Creekside Partners (SCP), a California general partnership with Sierra Pacific Development Fund formed in 1994, and a 33.36% interest in Sierra Vista Partners (SVP), a California general partnership with Sierra Pacific Development Fund III formed in 1994. Summarized income statement information for these Partnerships, which are accounted for by SMMP under the equity method, for the nine months ended September 30, 2000 and 1999 is as follows: SCP SVP SIIP -------------------- ---------------- ---------------------- SEPTEMBER 30 SEPTEMBER 30 SEPTEMBER 30 -------------------- ---------------- ---------------------- 2000 1999 2000 1999 2000 1999 --------- -------- ------- ------ ----------- ---------- Rental income $744,330 $682,407 $ 0 $ 0 $ 1,013,425 $ 831,944 Total revenues 744,330 682,407 0 11,907 1,024,630 831,944 Operating expenses 404,520 376,008 13,735 14,577 351,062 338,169 Extraordinary loss (46,020) 0 0 0 0 0 Net (loss) income (206,327) (66,373) (13,735) (2,670) 298,569 (127,792) 4. PARTNERS' EQUITY Equity and net income per limited partnership unit is determined by dividing the limited partners' share of the Partnership's equity and net income by the number of limited partnership units outstanding, 77,000. During the quarter ended March 31, 2000, an amount was transferred between the partners' equity accounts such that 99% of cumulative operating income, gains, losses, deductions and credits of the Partnership is allocated among the limited partners and 1% was allocated to the general partner. Management does not believe that the effect of this transfer is significant. 9 Sierra Pacific Pension Investors '84 Notes to Financial Statements (Unaudited) Page three 5. PENDING TRANSACTION CGS Real Estate Company, Inc. (CGS), an affiliate of the general partner, is continuing the development of a plan which will combine the Parnership's property with the properties of other real estate parnerships managed by CGS and its affiliates. These limited partnerships own office properties, industrial properties, shopping centers, and residential apartment properties. It is expected that the acquirer would qualify as a real estate investment trust. Limited partners would receive shares of common stock in the acquirer, which would be listed on a national securities exchange. The transaction is subject to the approval of the limited partners of the Partnership and portions of the other partnerships. CGS's management filed a Registration Statement on Form S-4 August 14, 2000 relating to the solicitation of consents with the Securities and Exchange Commission. The Partnership has advanced more than its proportionate share of the costs relating to the transaction. To the extent that expenses advanced by the Partnership exceed its proportionate share, the Partnership will receive a credit for any excess portion in determining the shares to be issued to the limited partners in the Partnership. If the transaction is not consummated or if the Partnership does not participate, the general partner of the Partnership will reimburse the Partnership for expenses incurred in connection with the transaction. At September 30, 2000, these advances totaled approximately $835,000 and are included in the "other assets" section of the balance sheet. 6. RECENT ACCOUNTING PRONOUNCEMENT In December 1999, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin No. 101 (SAB 101), Revenue Recognition in Financial Statements, which summarizes certain of the SEC staff's views on applying generally accepted accounting principles to revenue recognition in financial statements. The Partnership will adopt the accounting provisions of SAB 101 in the fourth quarter of 2000. Management believes that the implementation of SAB 101 will not have a significant effect on the Partnership's financial condition or results of operations. 10 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 to be signed on its behalf by the undersigned thereunto duly authorized. SIERRA PACIFIC PENSION INVESTORS `84 a Limited Partnership S-P PROPERTIES, INC. General Partner Date: NOVEMBER 14, 2000 /s/ THOMAS N. THURBER ----------------------------------------------- Thomas N. Thurber President and Director Date: NOVEMBER 14, 2000 /s/ G. ANTHONY EPPOLITO ----------------------------------------------- G. Anthony Eppolito Chief Accountant 11 EX-27 2 0002.txt
5 THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SIERRA PACIFIC PENSION INVESTORS '84 SEPTEMBER 30, 2000 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-2000 SEP-30-2000 37,860 0 206,665 0 0 194,193 4,005,882 2,859,142 11,090,406 149,767 1,354,190 0 0 0 9,586,449 11,090,406 439,178 558,557 0 358,641 110,324 0 96,723 299,390 0 299,390 0 0 0 299,390 3.85 3.85
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