-----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, SYTwUB2Y8Fgghut9FoKxHCFGs73+zjco5nv2D9qhif2D4kNcVnpbnUhtOpisOD4x /10sHX8plY0+669D6I5GCQ== 0000927016-98-004009.txt : 19981116 0000927016-98-004009.hdr.sgml : 19981116 ACCESSION NUMBER: 0000927016-98-004009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW ENGLAND LIFE PENSION PROPERTIES CENTRAL INDEX KEY: 0000711417 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 042774875 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-11884 FILM NUMBER: 98747194 BUSINESS ADDRESS: STREET 1: 225 FRANKLIN ST CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6172619000 MAIL ADDRESS: STREET 1: 399 BOYLSTON ST STREET 2: 399 BOYLSTON ST CITY: BOSTON STATE: MA ZIP: 02116 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, 1998 Commission File Number 0-11884 NEW ENGLAND LIFE PENSION PROPERTIES; A REAL ESTATE LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) Massachusetts 04-2774875 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 225 Franklin Street, 25th Fl. 02110 Boston, Massachusetts (Zip Code) (Address of principal executive offices) 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 [_] NEW ENGLAND LIFE PENSION PROPERTIES; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 1998 PART I FINANCIAL INFORMATION ---------------------- NEW ENGLAND LIFE PENSION PROPERTIES; A REAL ESTATE LIMITED PARTNERSHIP BALANCE SHEETS (Unaudited)
September 30, 1998 December 31, 1997 ------------------ ----------------- ASSETS Real estate investments: Property, held for disposition $ - $ 5,161,213 --------------- --------------- - 5,161,213 Cash and cash equivalents 8,877,170 1,309,837 Short-term investments - 1,543,736 Interest, rent and other receivables 5,316 10,447 --------------- --------------- $ 8,882,486 $ 8,025,233 =============== =============== LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 18,291 $ 44,957 Accrued management fee - 17,705 Deferred disposition fees 964,480 868,855 --------------- --------------- Total liabilities 982,771 931,517 --------------- --------------- Partners' capital: Limited partners ($115.37 per unit; 30,000 units authorized, issued and outstanding) 7,825,643 7,027,704 General partner 74,072 66,012 --------------- --------------- Total partners' capital 7,899,715 7,093,716 --------------- --------------- $ 8,882,486 $ 8,025,233 =============== ===============
(See accompanying notes to unaudited financial statements) NEW ENGLAND LIFE PENSION PROPERTIES; A REAL ESTATE LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended September 30, 1998 September 30, 1998 September 30, 1997 September 30, 1997 ------------------ ------------------ ------------------ ------------------ INVESTMENT ACTIVITY Property rentals $ - $ 153,809 $ 227,370 $ 742,326 Property operating expenses - (68,653) (94,996) (233,408) Depreciation and amortization - - (62,252) (188,288) ------------------ ------------------ ------------------ ------------------ - 85,156 70,122 320,630 Ground rentals and interest on mortgage loans - - 429,127 429,127 ------------------ ------------------ ------------------ ------------------ Total real estate operations - 85,156 499,249 749,757 Gain on sale of investment - 655,710 1,120,783 1,120,783 ------------------ ------------------ ------------------ ------------------ Total real estate activity - 740,866 1,620,032 1,870,540 Interest on cash equivalents and short term investments 120,844 299,546 53,281 123,956 ------------------ ------------------ ------------------ ------------------ Total investment activity 120,844 1,040,412 1,673,313 1,994,496 ------------------ ------------------ ------------------ ------------------ Portfolio Expenses Management fee - - 32,368 32,368 General and administrative 12,035 55,322 20,920 77,900 ------------------ ------------------ ------------------ ------------------ 12,035 55,322 53,288 110,268 ------------------ ------------------ ------------------ ------------------ Net Income $ 108,809 $ 985,090 $ 1,620,025 $ 1,884,228 ================== ================== ================== ================== Net income per limited partnership unit $ 3.59 $ 32.51 $ 53.46 $ 62.18 ================== ================== ================== ================== Cash distributions per limited partnership unit $ - $ 5.91 $ - $ - ================== ================== ================== ================== Number of limited partnership units outstanding during the period 30,000 30,000 30,000 30,000 ================== ================== ================== ==================
(See accompanying notes to unaudited financial statements) NEW ENGLAND LIFE PENSION PROPERTIES; A REAL ESTATE LIMITED PARTNERSHIP STATEMENTS OF PARTNERS' CAPITAL (Unaudited)
Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended September 30, 1998 September 30, 1998 September 30, 1997 September 30, 1997 ------------------ ------------------ ------------------ ------------------ General Limited General Limited General Limited General Limited Partner Partners Partner Partners Partner Partners Partner Partners ------- -------- ------- -------- ------- -------- ------- -------- Balance at beginning of period $ 72,984 $7,717,922 $ 66,012 $7,027,704 $ 47,726 $12,556,272 $ 45,084 $12,294,711 Cash distributions - - (1,791) (177,300) - - - - Net income 1,088 107,721 9,851 975,239 16,200 1,603,825 18,842 1,865,386 ---------- ---------- ---------- ---------- ---------- ----------- ---------- ----------- Balance at end of period $ 74,072 $7,825,643 $ 74,072 $7,825,643 $ 63,926 $14,160,097 $ 63,926 $14,160,097 ---------- ---------- ---------- ---------- ---------- ----------- ---------- -----------
(See accompanying notes to unaudited financial statements) NEW ENGLAND LIFE PENSION PROPERTIES; A REAL ESTATE LIMITED PARTNERSHIP SUMMARIZED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September 30, ------------------------------- 1998 1997 ---- ---- Net cash provided by operating activities $ 312,003 $ 848,316 ---------- ---------- Cash flows from investing activities: Net proceeds from sale of investment 5,795,060 6,798,318 Deferred disposition fee 95,625 214,312 Capital expenditures on owned property - (254,476) (Increase) decrease in short-term investments, net 1,543,736 (986,283) ---------- ---------- Net cash provided by investing activities 7,434,421 5,771,871 ---------- ---------- Cash flows from financing activity: Distributions to partners (179,091) - ---------- ---------- Net increase in cash and cash equivalents 7,567,333 6,620,187 Cash and cash equivalents: Beginning of period 1,309,837 2,300,885 ---------- ---------- End of period $8,877,170 $8,921,072 ========== ==========
(See accompanying notes to unaudited financial statements) NEW ENGLAND LIFE PENSION PROPERTIES; 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, 1998 and December 31, 1997 and the results of its operations, its cash flows and partners' capital for the three and nine months ended September 30, 1998 and 1997. These adjustments are of a normal recurring nature. See notes to financial statements included in the Partnership's 1997 Annual Report on Form 10-K for additional information relating to the Partnership's financial statements. NOTE 1 - ORGANIZATION AND BUSINESS - ---------------------------------- New England Life Pension Properties; 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. The Partnership primarily serves as an investment for qualified pension and profit sharing plans and other entities intended to be exempt from Federal income tax. The Partnership commenced operations in June, 1983 and acquired six real estate investments prior to the end of 1985. The Partnership sold its remaining investment in March 1998 and therefore intends to liquidate and dissolve in 1999. NOTE 2 - INVESTMENTS IN PROPERTY - --------------------------------- On March 4, 1998, the Rivers Corporate Park property, located in Columbia, Maryland, was sold to an unaffiliated third party. The selling price was determined by arm's length negotiations between the Partnership and the buyer. The gross sales price was $6,375,000. The Partnership received net proceeds of $5,890,685 after closing costs and recognized a gain of $655,710 ($21.64 per limited partnership unit). A disposition fee of $95,625 was accrued but not paid to AEW Real Estate Advisors, Inc. (the "Advisor"). NEW ENGLAND LIFE PENSION PROPERTIES; 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 in June, 1983. A total of 30,000 units were sold. The Partnership received proceeds of $27,253,251, net of selling commissions and other offering costs, which were invested in real estate and the payment of related acquisition costs, or retained as working capital reserves. The Partnership made six real estate investments, all of which have been sold: one in each of 1985, 1991, 1994, 1996, 1997 and 1998. As a result of these sales and similar transactions, capital of $26,538,900 ($884.63 per limited partnership) has been returned to the limited partners. On March 4, 1998, the Rivers Corporate Park property was sold to an unaffiliated third party. The Partnership received net proceeds of $5,890,685 after closing costs and recognized a gain of $655,710 ($21.64 per limited partnership unit). A disposition fee of $95,625 was accrued but not paid to the Advisor. At September 30, 1998, the Partnership had $8,877,170 in cash and cash equivalents, which is primarily being retained as working capital reserves. Due to the sale of the Partnership's last investment, discussed above, the general partner has elected not to make any further distributions until all Partnership expenses have been paid or reconciled. The Partnership intends to liquidate and dissolve in early 1999. Distributions for the first two quarters of 1997 had also been suspended due to the bankruptcy of the sole tenant at Rivers Corporate Park. Operating distributions were resumed for the third quarter of 1997 at an annualized rate of 12% on the adjusted capital contribution, due to increased cash flow from Rivers Corporate Park and Willows Shopping Center. 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 expects to conclude the internal testing, remediation/repair and certifications of its Plan no later than December 31, 1998. NEW ENGLAND LIFE PENSION PROPERTIES; A REAL ESTATE LIMITED PARTNERSHIP 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 Partnership currently does not have a contingency plan in the event of a particular provider or system not being Year 2000 compliant. Such a plan will be developed if it becomes clear that a provider (including AEW Capital Management) is not going to achieve its scheduled compliance objectives. 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. Results of Operations - --------------------- Operating Factors The Willows Shopping Center was sold on September 18, 1997 and the Partnership recognized a gain of $1,117,467. At the time of sale, the Willows Shopping Center was 94% leased. As discussed above, the Rivers Corporate Park was sold on March 4, 1998, and the Partnership recognized a gain of $655,710. At the time of sale, this property was 29% leased. Investment Results Real estate operations for the comparable nine month periods ended September 30, 1998 and 1997 were $85,156 and $749,757, respectively. This decrease of $664,601 is due to both the sale of the Willows Shopping Center in September 1997 and the sale of Rivers Corporate Park in March 1998. There are no comparative operating results for the three month periods ended September 30, 1998 and 1997, also due to the two sales mentioned above. Interest on cash equivalents and short-term investments for the three and nine month periods ended September 30, 1998 was $120,844 and $299,546 compared to $53,281 and $123,956 for the same periods in 1997. The increases in both periods are due primarily to higher invested balances caused by the receipt of proceeds from the Rivers Corporate Park sale in early March 1998. Operating cash flow decreased $536,313 between the first nine months of 1997 and 1998. This decrease is primarily due to the sales of the Willows Shopping Center in September 1997 and Rivers Corporate Park in March 1998. Portfolio Expenses The Partnership management fee is 9% of distributable cash flow from operations after any increase or decrease in working capital reserves as NEW ENGLAND LIFE PENSION PROPERTIES; A REAL ESTATE LIMITED PARTNERSHIP determined by the general partner. General and administrative expenses primarily consist of real estate appraisal, printing, legal, accounting and investor servicing fees. There were no management fees incurred during the three and nine month periods of 1998 due to the suspension of cash distributions as a result of the sale of the last Partnership asset in early March 1998. General and administrative expenses for the three and nine months ended September 30, 1998 were $12,035 and $55,322, respectively, compared to $20,920 and $77,900 for the same periods in 1997. The decreases for both comparative periods are due to lower overall expenses as a result of sales of all remaining Partnership assets. NEW ENGLAND LIFE PENSION PROPERTIES; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 1998 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 quarter ended September 30, 1998. 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. NEW ENGLAND LIFE PENSION PROPERTIES; A REAL ESTATE LIMITED PARTNERSHIP (Registrant) November 13, 1998 /s/ J. Christopher Meyer III ------------------------------- J. Christopher Meyer III President, Chief Executive Officer and Director of General Partner, Copley Properties Company, Inc. November 13, 1998 /s/ Karin J. Lagerlund -------------------------------- Karin J. Lagerlund Principal Financial and Accounting Officer of General Partner, Copley Properties Company, Inc. EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1998 SEP-30-1998 8,877,170 0 5,316 0 0 8,882,486 0 0 8,882,486 18,291 964,480 0 0 0 7,899,715 8,882,486 153,809 1,109,065 68,653 68,653 55,322 0 0 985,090 0 985,090 0 0 0 985,090 32.51 32.51
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