-----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, IA8TPIkDDB7/Z7dQrX0A1J+iKV0VJstjUQmsMkGC0iOKY61M6kfb6e7jEKJaC2Uw FEGns6oDBPuaMR9w2oRZiA== 0000890566-99-001398.txt : 19991109 0000890566-99-001398.hdr.sgml : 19991109 ACCESSION NUMBER: 0000890566-99-001398 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIERRA PACIFIC INSTITUTIONAL PROPERTIES V CENTRAL INDEX KEY: 0000780052 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330122424 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-15702 FILM NUMBER: 99743475 BUSINESS ADDRESS: STREET 1: 5850 SAN FELIPE STE 500 CITY: HOUSTON STATE: TX ZIP: 77057 BUSINESS PHONE: 7139776171 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 September 30, 1999 ---------------------------------------------------- Commission file number 0-15702 ---------------------------------------------------- SIERRA PACIFIC INSTITUTIONAL PROPERTIES V (A LIMITED PARTNERSHIP) State of California 33-0122424 - -------------------------------------- ----------------------------------- (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 ---- Consolidated Balance Sheets - September 30, 1999 and December 31, 1998 5 Consolidated Statements of Operations - For the Nine Months Ended September 30, 1999 and For the Three Months Ended September 30, 1999 and 1998 6 Consolidated Statement of Changes in Partners' Equity - from October 8, 1985 (Inception of the Partnership) to December 31, 1998 and For the Nine Months Ended September 30, 1999 7 Consolidated Statements of Cash Flows - For the Nine Months Ended September 30, 1999 and 1998 8 Notes to Consolidated Financial Statements 9 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 Partnership's Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-Q. The Partnership currently owns a 64.90% interest in the Sorrento II Partnership, which operates the Sorrento II property in San Diego, California. (b) RESULTS OF OPERATIONS Revenues for the nine months and three months ended September 30, 1999 increased by $277,000 and $74,000, respectively, when compared to the corresponding periods in the prior year. This increase was principally due to an increase in occupancy. The Partnership leased 29,150 square feet of the Property to one tenant in 1998. This space was vacant during the first seven months of 1998. The Property was 100% occupied at September 30, 1999. 2 Operating expenses for the nine months ended September 30, 1999 increased by $46,000, or 16%, in comparison to the same period in 1998. This increase was principally due to higher management fees and other operating expenses resulting from the increased occupancy of the property. Operating expenses for the three months ended September 30, 1999 increased by $4,000, or 4%, primarily due to the increase in management fees and as a result of higher maintenance and repair costs. This increase was partially offset due to a decrease in administrative costs incurred during the quarter. (c) LIQUIDITY AND CAPITAL RESOURCES The Partnership's primarily capital requirements will be for the construction of new tenant space. It is anticipated that these requirements will be funded from the operations of the property. A secondary source of cash is available through advances from the minority owner of the property, Sierra Mira Mesa Partners ("SMMP"). SMMP has adequate resources to make any necessary advances during the foreseeable future. In August and October 1999, the Partnership prepaid its ground lease $300,000 and $525,000, respectively. These funds were advanced to the Partnership by SMMP. Effective with the October 1999 rent, amounts becoming payable under the terms of the lease will be applied against the prepaid balance until such time the balance is extinguished plus interest at the annual rate of ten percent per annum. The prepaid balance at September 30, 1999 was $875,000. The Partnership is in a liquid position at September 30, 1999 with cash of $126,000 and current liabilities of $88,000. (d) YEAR 2000 COMPLIANCE The Year 2000 Compliance issue is the result of computer programs being written using two digits rather than four to define the applicable year. Any of the Partnership's computer programs that have time-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing disruptions of operations, including, among other things, a temporary inability to process transactions, send invoices, or engage in similar normal business activities. As a result, many companies' software and computer systems may need to be upgraded or replaced in order to comply with Year 2000 requirements. The Partnership employs a property management company to manage, operate and lease the property. The management company believes it will be ready for the Year 2000 date change by the end of 1999. The impact of Year 2000 non-compliance by other third parties cannot accurately be gauged. The total cost to the Partnership of activities associated with Year 2000 Compliance is not anticipated to be material to its financial position or results of operations in any given year. In January 1999, the Partnership began utilizing a new software program to maintain books and records. The new software program is Year 2000 compliant. 3 The total amount of potential risk that would be reasonably likely to result from Year 2000 failures cannot presently be estimated. In the event the Partnership does not properly identify Year 2000 issues in a timely manner, there can be no assurance that Year 2000 issues will not materially affect the Partnership's results. The Partnership's contingency plan should systems fail due to the Year 2000 date change is to temporarily convert to a manual system. The Partnership believes it could temporarily operate on a manual system without adversely impacting operations. The preceding Year 2000 discussion contains various forward-looking statements which represent the Partnership's beliefs or expectations regarding future events. All forward-looking statements involve a number of risks and uncertainties that could cause the actual results to differ materially from projected results. 4 SIERRA PACIFIC INSTITUTIONAL PROPERTIES V (A LIMITED PARTNERSHIP) CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 1999 AND DECEMBER 31, 1998 - --------------------------------------------------------------------------------
SEPTEMBER 30, 1999 DECEMBER 31, 1998 -------------------- -------------------- ASSETS Cash and cash equivalents ........................ $ 125,661 $ 3,203 Receivables: Unbilled rent .................................. 462,461 486,238 Due from affiliate ............................... 18,995 18,995 Prepaid ground lease ............................. 875,000 683,000 Income-producing property - net of accumulated depreciation of $2,144,852 and $2,760,889, respectively ................... 5,627,192 5,570,726 Other assets ..................................... 323,090 385,079 -------------------- -------------------- Total Assets ..................................... $ 7,432,399 $ 7,147,241 ==================== ==================== LIABILITIES AND PARTNERS' EQUITY Accrued and other liabilities .................... $ 87,941 $ 252,764 Due to affiliate ................................. 567,420 0 Ground lease payable ............................. 196,216 185,863 -------------------- -------------------- Total Liabilities ................................ 851,577 438,627 -------------------- -------------------- Ground lessor's equity in income- producing property ............................. 3,000,000 3,000,000 -------------------- -------------------- Minority interest in consolidated joint venture ................................. 1,666,234 1,711,089 -------------------- -------------------- Partners' equity: General Partner ................................ 0 0 Limited Partners: 140,000 units authorized, 30,777 issued and outstanding .................................. 1,914,588 1,997,525 -------------------- -------------------- Total Partners' equity ........................... 1,914,588 1,997,525 -------------------- -------------------- Total Liabilities and Partners' equity ........... $ 7,432,399 $ 7,147,241 ==================== ====================
UNAUDITED SEE ACCOMPANYING NOTES 5 SIERRA PACIFIC INSTITUTIONAL PROPERTIES V (A LIMITED PARTNERSHIP) CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 AND FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 - --------------------------------------------------------------------------------
NINE MONTHS ENDED THREE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ---------------------- ---------------------- 1999 1998 1999 1998 --------- --------- --------- --------- REVENUES: Rental income ............................ $ 831,944 $ 554,735 $ 277,167 $ 203,351 --------- --------- --------- --------- Total revenues ......... 831,944 554,735 277,167 203,351 --------- --------- --------- --------- EXPENSES: Operating expenses ..................... 338,169 292,399 94,602 90,919 Ground lease ........................... 293,606 280,353 106,704 93,451 Depreciation and amortization .......... 327,961 332,678 111,353 116,737 --------- --------- --------- --------- Total costs and expenses 959,736 905,430 312,659 301,107 --------- --------- --------- --------- LOSS BEFORE MINORITY INTEREST'S SHARE OF CONSOLIDATED JOINT VENTURE LOSS ....... (127,792) (350,695) (35,492) (97,756) --------- --------- --------- --------- MINORITY INTEREST'S SHARE OF CONSOLIDATED JOINT VENTURE LOSS .......... 44,855 117,658 12,458 32,797 --------- --------- --------- --------- NET LOSS ................................... $ (82,937) $(233,037) $ (23,034) $ (64,959) ========= ========= ========= ========= Net loss per limited partnership unit ...... $ (2.69) $ (7.57) $ (0.75) $ (2.11) ========= ========= ========= =========
UNAUDITED SEE ACCOMPANYING NOTES 6 SIERRA PACIFIC INSTITUTIONAL PROPERTIES V (A LIMITED PARTNERSHIP) CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY FROM OCTOBER 8, 1985 (INCEPTION OF PARTNERSHIP) TO DECEMBER 31, 1998 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 - --------------------------------------------------------------------------------
LIMITED PARTNERS TOTAL -------------------------- GENERAL PARTNERS' PER UNIT TOTAL PARTNER EQUITY ----------- ----------- ----------- ----------- Proceeds from sale of partnership units ................. $ 250.00 $ 7,694,250 $ 7,694,250 Underwriting commissions and other organization expenses ... (37.21) (1,145,333) (1,145,333) Cumulative net income (loss) (to December 31, 1998) ............ (145.20) (4,468,631) $ 9,193 (4,459,438) Cumulative distributions (to December 31, 1998) ............ (2.69) (82,761) (9,193) (91,954) ----------- ----------- ----------- ----------- Partners' equity - January 1, 1999 .. 64.90 1,997,525 0 1,997,525 Net loss ............................ (2.69) (82,937) (82,937) ----------- ----------- ----------- ----------- Partners' equity - September 30, 1999 $ 62.21 $ 1,914,588 $ 0 $ 1,914,588 =========== =========== =========== ===========
UNAUDITED SEE ACCOMPANYING NOTES 7 SIERRA PACIFIC INSTITUTIONAL PROPERTIES V (A LIMITED PARTNERSHIP) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 - --------------------------------------------------------------------------------
1999 1998 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss ............................................. $ (82,937) $(233,037) Adjustments to reconcile net loss to cash (used in) provided by operating activities: Depreciation and amortization ...................... 327,961 332,678 Minority interest's share of consolidated joint venture loss ............................... (44,855) (117,658) Decrease in rent receivable ........................ 23,777 15,646 Increase in other assets ........................... (190,219) (64,348) (Decrease) increase in accrued and other liabilities (154,470) 234,810 --------- --------- Net cash (used in) provided by operating activities (120,743) 168,091 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Payments for property additions .................... (324,219) (250,195) --------- --------- Net cash used in investing activities .............. (324,219) (250,195) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Loan from affiliate ................................ 567,420 66,500 --------- --------- Net cash provided by financing activities .......... 567,420 66,500 --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ............................... 122,458 (15,604) CASH AND CASH EQUIVALENTS - Beginning of period ................................ 3,203 23,479 --------- --------- CASH AND CASH EQUIVALENTS - End of period ...................................... $ 125,661 $ 7,875 ========= =========
UNAUDITED SEE ACCOMPANYING NOTES 8 SIERRA PACIFIC INSTITUTIONAL PROPERTIES V (A LIMITED PARTNERSHIP) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------------------------------------ 1. ORGANIZATION In October 1993, the Partnership created a general partnership (Sorrento II Partners) with Sierra Mira Mesa Partners ("SMMP") to facilitate cash contributions by SMMP for the continued development and operation of the Sorrento II property. The Partnership Agreement of Sorrento II 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 as called for by the Agreement. Accordingly, on January 1, 1999, the Partnership's interest in Sorrento II Partners was decreased from 66.45% to 64.90% to reflect 1998 contributions and distributions. 2. BASIS OF FINANCIAL STATEMENTS The accompanying unaudited consolidated condensed financial statements include the accounts of the Partnership and Sorrento II Partners, a majority owned joint venture at September 30, 1999. 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 September 30, 1999 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, 1998. 3. RELATED PARTY TRANSACTIONS In 1997, the Sorrento II land was purchased from Lincoln National Life Insurance Company by CGS Real Estate Company, Inc. ("CGS"), an affiliate of the General Partner. All rights, title and interest in the ground lease were transferred and assigned to CGS. In 1997, the Partnership prepaid $900,000 of the ground lease to CGS. In August and October 1999, the Partnership made additional prepayments of $300,000 and $525,000, respectively. Effective with the October 1999 rent, amounts becoming payable under the terms of the lease will be applied against the prepaid balance until such time the balance is extinguished plus interest at the annual rate of ten percent per annum. The prepaid balance at September 30, 1999 was $875,000. UNAUDITED 9 Sierra Pacific Institutional Properties V Notes to Consolidated Financial Statements Page Two Included in the financial statements for the nine months ended September 30, 1999 and 1998 are affiliate transactions as follows: SEPTEMBER 30 -------------------- 1999 1998 -------- -------- Management fees $ 51,343 $ 34,223 Administrative fees 66,172 54,377 Leasing fees 0 55,878 Ground lease payments 475,253 144,000 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, 30,077. UNAUDITED 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 None. 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 INSTITUTIONAL PROPERTIES V a Limited Partnership S-P PROPERTIES, INC. General Partner Date: OCTOBER 22, 1999 /s/ THOMAS N. THURBER ---------------- ---------------------------------- Thomas N. Thurber President and Director Date: OCTOBER 22, 1999 /S/ G. ANTHONY EPPOLITO ---------------- ---------------------------------- G. Anthony Eppolito Cheif Accounting Officer 11 EX-27 2
5 THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SIERRA PACIFIC INSTITUTIONAL PROPERTIES V SEPTEMBER 30, 1999 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1999 SEP-30-1999 125,661 0 462,461 0 0 144,656 7,772,044 2,144,852 7,432,399 655,361 3,000,000 0 0 0 1,914,588 7,432,399 831,944 831,944 0 631,775 327,961 0 0 (82,937) 0 (82,937) 0 0 0 (82,937) (2.69) (2.69)
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