-----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, C/f6ikQByRhrisrKZW8pm0tI/FWLQkF3HxakgGXrS1gRfg9tUgUjC/tZPUhyCnga xZDl/ckgeQPR3ML24eeGww== 0000927016-99-003670.txt : 19991115 0000927016-99-003670.hdr.sgml : 19991115 ACCESSION NUMBER: 0000927016-99-003670 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COPLEY PENSION PROPERTIES VI CENTRAL INDEX KEY: 0000824209 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 042988542 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-17807 FILM NUMBER: 99747082 BUSINESS ADDRESS: STREET 1: 255 FRANKLIN STREET CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6175781200 MAIL ADDRESS: STREET 1: 399 BOYLSTON STREET CITY: BOSTON STATE: MA ZIP: 02116 FORMER COMPANY: FORMER CONFORMED NAME: NEW ENGLAND PENSION PROPERTIES VI DATE OF NAME CHANGE: 19880113 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ---------------------------------------- For Quarter Ended September 30, 1999 Commission File Number 0-17807 COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) Massachusetts 04-2988542 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 225 Franklin Street, 25th Fl. Boston, Massachusetts 02110 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 261-9000 ---------------------------------------------------------------------- Former name, former address and former fiscal year if changed since last report 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 twelve (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 COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 1999 PART I FINANCIAL INFORMATION COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP BALANCE SHEETS
September 30, 1999 December 31, 1998 (Unaudited) (Audited) ------------------ ----------------- ASSETS Real estate investments: Joint venture $1,609,889 $1,649,433 Property, net 4,173,560 4,242,783 ---------- ---------- 5,783,449 5,892,216 Cash and cash equivalents 2,610,631 2,605,486 ---------- ---------- $8,394,080 $8,497,702 ========== ========== LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 103,983 $ 115,195 Accrued management fee 13,891 17,595 Deferred disposition fees 1,369,577 1,369,577 ---------- ---------- Total liabilities 1,487,451 1,502,367 ---------- ---------- Partners' capital: Limited partners ($228.20 per unit; 160,000 units authorized, 48,788 units issued and outstanding) 6,893,683 6,981,503 General partners 12,946 13,832 ---------- ---------- Total partners' capital 6,906,629 6,995,335 ---------- ---------- $8,394,080 $8,497,702 ========== ==========
(See accompanying notes to unaudited financial statements) COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended September 30, 1999 September 30, 1999 September 30, 1998 September 30, 1998 ------------------ ------------------ ------------------ ------------------ Investment Activity Property rentals $ 205,093 $ 577,108 $ 191,744 $ 543,794 Property operating expenses (52,316) (151,449) (48,674) (156,814) Depreciation and amortization (48,537) (96,589) (32,333) (105,570) ----------- ----------- ----------- ----------- 104,240 329,070 110,737 281,410 Joint venture earnings 45,031 144,666 61,894 841,887 ----------- ----------- ----------- ----------- Total real estate operations 149,271 473,736 172,631 1,123,297 Gain on sale of investment - - 7,278,745 7,278,745 ----------- ----------- ----------- ----------- Total real estate activity 149,271 473,736 7,451,376 8,402,042 Interest on cash equivalents and short-term investments 31,506 104,969 91,285 182,882 ----------- ----------- ----------- ----------- Total investment activity 180,777 578,705 7,542,661 8,584,924 ----------- ----------- ----------- ----------- Portfolio Expenses Management fee 13,891 44,499 59,121 159,719 General and administrative 42,570 135,526 36,737 142,461 ----------- ----------- ----------- ----------- 56,461 180,025 95,858 302,180 ----------- ----------- ----------- ----------- Net income $ 124,316 $ 398,680 $ 7,446,803 $ 8,282,744 =========== =========== =========== ===========
COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP Net income per limited partnership unit $ 2.52 $ 8.09 $ 151.11 $ 168.07 ========= ========= ========= ========= Cash distributions per limited partnership unit $ 3.14 $ 9.89 $ 432.33 $ 453.53 ========= ========= ========= ========= Number of limited partnership units outstanding during the period 48,788 48,788 48,788 48,788 ========= ========= ========= =========
(See accompanying notes to unaudited financial statements) COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP STATEMENTS OF PARTNERS' CAPITAL (DEFICIT) (Unaudited)
Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended September 30, 1999 September 30, 1999 September 30, 1998 September 30, 1998 ---------------------- ---------------------- ------------------------ ------------------------ General Limited General Limited General Limited General Limited Partners Partners Partners Partners Partners Partners Partners Partners --------- ----------- --------- ----------- --------- ------------- --------- ------------- Balance at beginning of period $ 13,250 $6,923,804 $ 13,832 $6,981,503 $(50,589) $ 21,684,637 $(48,500) $ 21,891,360 Cash distributions (1,547) (153,194) (4,873) (482,513) (5,086) (21,092,516) (15,534) (22,126,821) Net income 1,243 123,073 3,987 394,693 74,468 7,372,335 82,827 8,199,917 -------- ---------- -------- ---------- -------- ------------ -------- ------------ Balance at end of period $ 12,946 $6,893,683 $ 12,946 $6,893,683 $ 18,793 $ 7,964,456 $ 18,793 $ 7,964,456 ======== ========== ======== ========== ======== ============ ======== ============
(See accompanying notes to unaudited financial statements) COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP SUMMARIZED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September 30, 1999 1998 ----------------- --------------- Net cash provided by operating activities $ 492,531 $ 1,611,373 ---------- ------------ Cash flows from investing activities: Net proceeds from sale of investments - 19,947,381 Deferred disposition fees - 651,900 Decrease in short-term investments, net - 1,405,619 ---------- ------------ Net cash provided by investing activities - 22,004,900 ---------- ------------ Cash flows from financing activity: Distributions to partners (487,386) (22,142,355) ---------- ------------ Net increase in cash and cash equivalents 5,145 1,473,918 Cash and cash equivalents: Beginning of period 2,605,486 2,105,728 ---------- ------------ End of period $2,610,631 $ 3,579,646 ========== ============
(See accompanying notes to unaudited financial statements) COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS (Unaudited) In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly the Partnership's financial position as of September 30, 1999 and December 31, 1998 and its operations, its cash flows and partners' capital (deficit) for the three and nine months ended September 30, 1999 and 1998. These adjustments are of a normal recurring nature. See notes to financial statements included in the Partnership's 1998 Annual Report on Form 10-K for additional information relating to the Partnership's financial statements. Note 1 - Organization and Business - ---------------------------------- Copley Pension Properties VI; A Real Estate Limited Partnership (the "Partnership") is a Massachusetts limited partnership organized for the purpose of investing primarily in newly constructed and existing income producing real properties. It primarily serves as an investment for qualified pension and profit sharing plans and other organizations intended to be exempt from federal income tax. The Partnership commenced operations in July 1988, and acquired the two real estate investments it currently owns prior to the end of 1991. It intends to dispose of its investments within eight to twelve years of their acquisition, and then liquidate; however, the managing general partner could extend the investment period if it is considered to be in the best interest of the limited partners. The Partnership has engaged AEW Real Estate Advisors, Inc. (the "Advisor") to provide asset management services. Note 2 - Investments in Joint Ventures - -------------------------------------- Summarized Financial Information The following summarized financial information is presented in the aggregate for the Partnership's remaining joint venture (one at both September 30, 1999 and December 31, 1998 and three at September 30, 1998): Assets and Liabilities ------------------------
September 30, 1999 December 31, 1998 ------------------ ----------------- Assets Real property, at cost less accumulated depreciation of $884,841 and $832,160, respectively $ 2,368,543 $ 2,421,223 Other 9,459 30,891 ------------ ------------ 2,378,002 2,452,114 Liabilities 36,024 88,618 ------------ ------------ Net assets $ 2,341,978 $ 2,363,496 ============ ============
COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP Results of Operations ---------------------
Nine Months Ended September 30, 1999 1998 ----------------- ------------- Revenue: Rental income $ 357,827 $2,417,165 Other income - 10,824 ---------- ---------- 357,827 2,427,989 ---------- ---------- Expenses: Operating expenses 95,266 856,840 Depreciation and amortization 52,680 412,802 ---------- ---------- 147,946 1,269,642 ---------- ---------- Net income $ 209,881 $1,158,347 ========== ==========
The White Phonic and Waterford Apartments joint ventures sold their real properties in July and August 1998, respectively. The 1998 amounts above include results of operations of those joint ventures through those respective dates. Liabilities and expenses exclude amounts owed and attributable to the Partnership and its affiliates on behalf of financing arrangements with the joint venture. COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP Note 3 - Property - ----------------- The following is a summary of the Partnership's last remaining wholly-owned property:
September 30, 1999 December 31, 1998 ------------------ ----------------- Land $ 2,770,056 $ 2,770,056 Buildings, improvements and other capitalized costs 4,908,078 4,903,218 Investment valuation allowance (1,500,000) (1,500,000) Accumulated depreciation and amortization (2,145,288) (2,048,698) Net operating assets 140,714 118,207 ----------- ----------- $ 4,173,560 $ 4,242,783 =========== ===========
Note 4 - Subsequent Event - ------------------------- Distributions of cash from operations relating to the quarter ended September 30, 1999 were made on October 28, 1999 in the aggregate amount of $140,450 ($2.85 per limited partnership unit). In addition, a capital distribution of $229,791 ($4.71 per limited partnership unit) from original working capital was also made at this time. COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP Management's Discussion and Analysis of Financial Condition and - --------------------------------------------------------------- Results of Operations - --------------------- Liquidity and Capital Resources The Partnership completed its offering of units of limited partnership interest on December 31, 1988. A total of 48,788 units were sold. The Partnership received proceeds of $43,472,858, net of selling commissions and other offering costs, which have been used for investment in real estate and for the payment of related acquisition costs, or retained as working capital reserves. The Partnership made seven real estate investments; one investment was sold in each of 1990, 1994 and 1997 and two investments were sold in 1998. Through September 30, 1999, capital of $37,654,578 ($771.80 per limited partnership unit) has been returned to the limited partners; $36,194,353 as a result of sales and $1,460,225, as a result of a discretionary reduction of original working capital previously held in reserves. At September 30, 1999, the Partnership had $2,610,631 in cash and cash equivalents, of which $140,450 was used for operating cash distributions and $229,791 for capital distributions to partners on October 28, 1999; the remainder is being retained as working capital reserves. The source of future liquidity and cash distributions to partners will primarily be cash generated by the Partnership's invested cash and cash equivalents and real estate investments, and proceeds from the sale of such investments. Based on an adjusted capital contribution of $228.20 per limited partnership unit, distributions of cash from operations relating to the first and second quarters of 1999 were made at the annualized rate of 5.5%, while operating distributions related to the third quarter of 1999 were made at the annualized rate of 5.0%. Distributions of cash from operations relating to the first and second quarters of 1998 were made at the annualized rate of 6.25% on an adjusted capital contribution of $660.29, while operating distributions related to the third quarter of 1998 were also made at the annualized rate of 6.25%, but were based on the weighted average capital contribution of $471.81. The initial decrease in the distribution rates between 1998 and 1999 was due to the 1998 sales of the White Phonic and Waterford Apartments properties and the consequent reduction in cash flow. The subsequent decrease in the distribution rate between the second and third quarter of 1999 was due to a decrease in cash flow from the Wilmington property as a result of delinquent rent payments from a significant tenant. The carrying value of real estate investments in the financial statements is at depreciated cost, or if the investment's carrying value is determined not to be recoverable through expected undiscounted future cash flows, the carrying value is reduced to estimated fair market value. The fair market value of such investments is further reduced by the estimated cost of sale for properties held for sale. Carrying value may be greater or less than current appraised value. At September 30, 1999, the aggregate appraised value of the real estate investments exceeded their carrying value by approximately $2,230,000. The current appraised value of real estate investments has been estimated by the managing general partner and is generally based on a correlation of traditional appraisal approaches performed by the Advisor and independent appraisers. Because of the subjectivity inherent in the valuation process, the estimated current appraised value may differ significantly from that which could be realized if the real estate were actually offered for sale in the marketplace. COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP Year 2000 Readiness Disclosure - ------------------------------ The Year 2000 Issue is a result of computer programs being written using two digits rather than four to define the applicable year. Computer programs that have date-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 or engage in normal business operations. The Partnership relies on AEW Capital Management L.P. ("AEW Capital Management"), the parent of AEW Real Estate Advisors, Inc., to generate financial information and to provide other services, which are dependent on the use of computers. The Partnership has obtained assurances from AEW Capital Management that: . AEW Capital Management has developed a Year 2000 Plan (the "Plan") consisting of five phases: inventory, assessment, testing, remediation/repair and certification. . As of September 30, 1998, AEW Capital Management had completed the inventory and assessment phases of this Plan and had commenced the testing and remediation/repair of internal systems. . AEW Capital Management concluded the internal testing, remediation/repair and certifications of its Plan in June 1999. . AEW Capital Management successfully participated in industry-wide testing in August 1999. . AEW Capital Management believes it is ready for Year 2000. AEW Capital Management has advised the Partnership that being ready means that AEW Capital Management has tested its internal mission critical systems and software applications, and based upon testing conducted, AEW Capital Management believes that such systems and applications are prepared to process dates correctly through the Year 2000. Based upon these assurances, the Partnership has determined that it is not necessary for it to develop a Year 2000 contingency plan. The Partnership also relies on joint venture partners and/or property managers to supply financial and other data with respect to its real properties. The Partnership is in the process of surveying these third party providers and assessing their compliance with Year 2000 requirements. To date, the Partnership is not aware of any problems that would materially impact its results of operations, liquidity or capital resources. However, the Partnership has not yet obtained written assurances that these providers would be Year 2000 compliant. The inability of one of these providers to complete its Year 2000 resolution process could materially impact the Partnership. In addition, the Partnership is also subject to external forces that might generally affect industry and commerce, such as utility or transportation company Year 2000 compliance failures and related service interruptions. Given the nature of its operations, the Partnership will not incur any costs associated with Year 2000 compliance. All such costs are borne by AEW Capital Management and the property managers. COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP Results of Operations Operating Factors The Wilmington property was 100% leased at September 30, 1999 and September 30, 1998. The Prentiss Copystar property was 100% leased through September 30, 1999 as it had been at September 30, 1998. However, due to the sole tenant's lease expiration and vacancy on this date, the property was unoccupied at September 30, 1999. Investment Results For the three and nine months ended September 30, 1999, operating results from real estate operations were $149,271 and $473,736, respectively, compared to $172,631 and $1,123,297 for the comparable periods in 1998. The decreases of $23,360 and $649,561 for the comparative three and nine month periods are primarily due to a decrease in joint venture earnings as a result of the sale of White Phonic on July 14, 1998 and the sale of Waterford Apartments on August 7, 1998. The nine month decrease is partially offset by an increase in operating performance at Wilmington Industrial due to an increase in market rates and lower professional fees. Interest on cash equivalents and short-term investments for the three and nine months ended September 30, 1999 was $31,506 and $104,969, respectively, compared to $91,285 and $182,882 for the same periods in 1998. The decreases of approximately $60,000, or 65%, and $78,000, or 43%, for the comparative three and nine month periods are primarily due to lower average investment balances in 1999, as a result of the sales of the White Phonic and Waterford Apartments properties in July and August 1998, respectively. Operating cash flow decreased $1,118,842 between the nine months ended September 30, 1998 and September 30, 1999, which is consistent with the decrease in operating activity discussed above. Portfolio Expenses The Partnership management fee is 9% of distributable cash flow from operations after any increase or decrease in working capital reserves as determined by the managing general partner. General and administrative expenses primarily consist of real estate appraisal, printing, legal, accounting and investor servicing fees. For the three and nine months ended September 30, 1999, management fees were $13,891 and $44,499, respectively, compared to $59,121 and $159,719 for the comparable periods in 1998. The decreases in management fees for the respective three and nine month periods are due to lower operational distributions as a result of the sales of White Phonic and Waterford Apartments in 1998 and due to 1998 management fees incurred as a result of a special distribution from operating reserves. General and administrative expenses for the three and nine months ended September 30, 1999 were $42,570 and $135,526, respectively, compared to $36,737 and $142,461 for the same periods in 1998. The increase of approximately $6,000 for the comparable three month periods is primarily due to 1998 actual out of pocket expenses paid in 1999 being higher than the estimated accrual and an increase in appraisal fees. The decrease of approximately $7,000 for the comparable nine month periods is primarily due to a decrease in legal and printing fees. This decrease is partially offset by an increase in state taxes. COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 1999 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K a. Exhibits: (27) Financial Data Schedule b. Reports on Form 8-K: No Current Reports on Form 8-K were filed during the quarter ended September 30, 1999. 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. COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP (Registrant) November 11, 1999 /s/ Alison Husid Cutler ------------------------------- Alison Husid Cutler President, Chief Executive Officer And Director of Managing General Partner, Sixth Copley Corp. November 11, 1999 /s/ Karin J. Lagerlund -------------------------------- Karin J. Lagerlund Principal Financial and Accounting Officer of Managing General Partner, Sixth Copley Corp. EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1999 SEP-30-1999 2,610,631 0 0 0 0 2,610,631 5,783,449 0 8,394,080 117,874 1,369,577 0 0 0 6,906,629 8,394,080 721,774 826,743 151,449 151,449 276,614 0 0 398,680 0 398,680 0 0 0 398,680 8.09 8.09
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