-----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, OZPeDLE7dF2EG99R/Y+frud/A3hkTFUutsiJtCcICh73cGJLYe93UxWic1WPewfx peRBgfq3Eq/Y4BIT5MmSkw== 0000757221-96-000003.txt : 19960816 0000757221-96-000003.hdr.sgml : 19960816 ACCESSION NUMBER: 0000757221-96-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW ENGLAND LIFE PENSION PROPERTIES III CENTRAL INDEX KEY: 0000757221 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 042847256 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14052 FILM NUMBER: 96611945 BUSINESS ADDRESS: STREET 1: 399 BOYLSTON ST 13TH FLR CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 6175781200 10-Q 1 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 June 30, 1996 Commission File Number 0-14052 NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) Massachusetts 04-2847256 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 399 Boylston Street, 13th Fl. Boston, Massachusetts 02116 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 578-1200 - ----------------------------------------------------------------------- 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 III; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED JUNE 30, 1996 PART I FINANCIAL INFORMATION ---------------------- BALANCE SHEET (Unaudited)
June 30, 1996 December 31, 1995 ------------------ ----------------- ASSETS Real estate investments: Joint ventures $ 17,865,238 $ 18,116,002 Property, net 1,288,995 1,243,499 ------------ ------------ 19,154,233 19,359,501 Cash and cash equivalents 2,466,744 1,399,905 Short-term investments 1,009,451 2,111,608 ------------ ------------ $ 22,630,428 $ 22,871,014 ============ ============ LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 54,733 $ 88,184 Accrued management fee 46,338 42,101 ------------ ------------ Total liabilities 101,071 130,285 ------------ ------------ Partners' capital (deficit): Limited partners ($493.14 per unit; 75,000 units authorized, 68,414 units issued and outstanding) 22,574,789 22,784,048 General partners (45,432) (43,319) ------------ ------------ Total partners' capital 22,529,357 22,740,729 ------------ ------------ $ 22,630,428 $ 22,871,014 ============ ============ (See accompanying notes to financial statements)
STATEMENT OF OPERATIONS (Unaudited)
Quarter Ended Six Months Ended Quarter Ended Six Months Ended June 30, 1996 June 30, 1996 June 30, 1995 June 30, 1995 -------------- ---------------- ------------- ---------------- INVESTMENT ACTIVITY Property rentals $ 45,232 $ 90,608 $ 44,368 $ 92,714 Property operating expenses (33,673) (66,114) (18,350) (51,101) Depreciation and amortization (28,571) (37,033) (9,143) (18,940) ------------ ------------- ------------- ------------- (17,012) (12,539) 16,875 22,673 Joint venture earnings 431,805 819,552 363,912 795,707 Amortization (2,366) (4,732) (2,366) (4,732) ------------ ------------- ------------- ------------- Total real estate operations 412,427 802,281 378,421 813,648 Interest on cash equivalents and short-term investments 43,959 87,503 51,757 100,840 ------------ ------------- ------------- ------------- Total investment activity 456,386 889,784 430,178 914,488 ------------ ------------- ------------- ------------- Portfolio Expenses General and administrative 62,311 114,261 61,313 129,000 Management fee 46,339 92,677 42,101 84,202 ------------ ------------- ------------- ------------- 108,650 206,938 103,414 213,202 ------------ ------------- ------------- ------------- Net Income $ 347,736 $ 682,846 $ 326,764 $ 701,286 ============ ============= ============= ============= Net income per limited partnership unit $ 5.03 $ 9.88 $ 4.73 $ 10.15 ============ ============= ============= ============= Cash distributions per limited partnership unit $ 6.78 $ 12.94 $ 6.16 $ 12.32 ============ ============= ============= ============= Number of limited partnership units outstanding during the period 68,414 68,414 68,414 68,414 ============= ============= ============= ============= (See accompanying notes to financial statements)
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited)
Quarter Ended Six Months Ended Quarter Ended Six Months Ended June 30, 1996 June 30, 1996 June 30, 1995 June 30, 1995 ------------------- ------------------- ----------------------- -------------------- General Limited General Limited General Limited General Limited Partners Partners Partners Partners Partners Partners Partners Partners --------- --------- --------- --------- --------- --------- --------- --------- Balance at beginning of period $(44,225) $22,694,377 $ (43,319) $ 22,784,048 $ (39,678) $ 23,144,587 $ (39,166) $23,195,240 Cash distributions (4,684) (463,847) (8,941) (885,277) (4,257) (421,430) (8,514) (842,860) Net income 3,477 344,259 6,828 676,018 3,268 323,496 7,013 694,273 -------- ---------- --------- ----------- ---------- ----------- --------- ---------- Balance at end of period $(45,432) $22,574,789 $ (45,432) $ 22,574,789 $ (40,667) $ 23,046,653 $ (40,667) $23,046,653 ======== =========== ========= ============ ========== =========== ========= =========== (See accompanying notes to financial statements)
SUMMARIZED STATEMENT OF CASH FLOWS (Unaudited)
Six Months Ended June 30, ------------------------- 1996 1995 --------- -------- Net cash provided by operating activities $ 894,465 $1,087,890 ----------- ---------- Cash flows from investing activities: Capital expenditures on owned property (9,404) (54,826) Decrease (increase) in short-term investments, net 1,075,996 (678,282) ---------- ---------- Net cash provided by (used in) investing activities 1,066,592 (733,108) ---------- ---------- Cash flows from financing activity: Distributions to partners (894,218) (851,374) ---------- ---------- Net increase (decrease) in cash and cash equivalents 1,066,839 (496,592) Cash and cash equivalents: Beginning of period 1,399,905 2,423,836 ---------- ---------- End of period $2,466,744 $1,927,244 ========== ========== (See accompanying notes to financial statements)
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 June 30, 1996 and December 31, 1995 and the results of its operations, its cash flows and changes in partners' capital (deficit) for the interim periods ended June 30, 1996 and 1995. These adjustments are of a normal recurring nature. See notes to financial statements included in the Partnership's 1995 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 III; 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 entities intended to be exempt from federal income tax. The Partnership commenced operations in July, 1985 and acquired several investments through 1988. The Partnership intends to dispose of its investments within twelve years of their acquisition, and then liquidate; however, the managing general partner could extend the investment period if it is in the best interest of the limited partners. NOTE 2 - REAL ESTATE JOINT VENTURES - ----------------------------------- The following summarized financial information is presented in the aggregate for the joint ventures:
Assets and Liabilities ---------------------- June 30, 1996 December 31, 1995 -------------- ----------------- Assets Real property, at cost less accumulated depreciation of $4,543,137 and $4,273,114, respectively $ 15,490,411 $ 15,753,539 Other assets 603,914 660,423 ------------- ------------- 16,094,325 16,413,962 Liabilities 152,093 280,372 ------------- ------------- Net Assets $ 15,942,232 $ 16,133,590 ============ ============
Results of Operations Six Months Ended June 30, -------------------------------- 1996 1995 ---- ---- Revenue Rental income $ 1,601,362 $ 1,549,707 Other 1,600 3,901 ------------ ------------ 1,602,962 1,553,608 ------------ ------------ Expenses Operating expenses 513,388 480,460 Depreciation and amortization 270,022 277,441 ------------ ------------ 783,410 757,901 ------------ ------------ Net income $ 819,552 $ 795,707 ============ ============
Liabilities and expenses exclude amounts owed and attributable to the Partnership on behalf of its various financing arrangements with the joint ventures. NOTE 3 - PROPERTY - ----------------- The following is a summary of the Partnership's investment in property:
June 30, 1996 December 31, 1995 -------------- ----------------- Land $ 347,772 $ 347,772 Buildings and improvements 1,030,522 1,021,118 Accumulated depreciation and amortization (87,689) (58,041) Net operating liabilities (1,610) (67,350) ------------ ------------ $ 1,288,995 $ 1,243,499 ============ ============ The buildings are being depreciated over a 25 year period.
NOTE 4 - SUBSEQUENT EVENT - ------------------------- Distributions of cash from operations relating to the quarter ended June 30, 1996 were made on July 25, 1996 in the aggregate amount of $468,532 ($6.78 per limited partnership unit). 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 December, 1985. A total of 68,414 units were sold. The Partnership received proceeds of $61,950,285, net of selling commissions and other offering costs, which were invested in real estate, used to pay related acquisition costs, or retained as working capital reserves. The Partnership made nine real estate investments, six of which were sold prior to 1994. As a result of the sales, capital of $34,676,320 has been returned to the limited partners through June 30, 1996. At June 30, 1996, the Partnership had $3,476,195 in cash, cash equivalents and short-term investments, of which $468,532 was distributed to partners on July 25, 1996; the remainder is being retained as working capital reserves. The source of future liquidity and cash distributions to partners will be cash generated by the Partnership's investments and proceeds from the sale of investments. Distributions of cash from operations for the first two quarters of 1996 and 1995 were made at the annualized rate of 5.5% and 5%, respectively, on the adjusted capital contribution. The increase in the distribution rate during 1996 results from the attainment of appropriate cash reserve levels and the stabilization of property operations. 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 June 30, 1996, the appraised value of each real estate investment exceeded its related carrying value; the aggregate excess was approximately $5,600,000. The current appraised value of real estate investments has been estimated by the managing general partner and is generally based on a combination of traditional appraisal approaches performed by the Partnership's 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. Results of Operations - --------------------- Form of Real Estate Investments North Cabot Industrial Park is a wholly-owned property. Bayberry Apartments and 270 Technology Center are structured as joint ventures with real estate management/development firms. Operating Factors Occupancy at North Cabot Industrial Park increased from 72% to 87% during the second quarter of 1996, as two new leases were signed during the quarter. (Occupancy was 66% at June 30, 1995 and had increased to 94% at December 31, 1995.) The rental market has been improving and the Partnership's objective is to stabilize the tenancy by offering renovated, turn-key space. Occupancy at Bayberry Apartments remained at 95% as of June 30, 1996. (Occupancy was 93% at June 30, 1995.) Market conditions remain competitive; however, supply and demand remain in equilibrium. Occupancy at 270 Technology Park remained at 98% during the second quarter of 1996. (Occupancy was also 98% at June 30, 1995.) However, a tenant occupying 12% of the building intends to vacate in July. Investment Activity Interest on cash equivalents and short-term investments decreased $13,000, or 13% between the first six months of 1996 and 1995 primarily due to lower short-term interest rates. Real estate operating results were $802,281 for the first six months of 1996 as compared to $813,648 for the comparable period of 1995. This decrease was due to lower operating results from North Cabot, where expenses increased due to tenant turnover, partially offset by an increase in operating income at 270 Technology Park. Operating cash flow decreased $193,425 or 18% between the first two quarters of 1995 and 1996. The decrease in cash flow primarily resulted from the timing of cash distributions from Bayberry, together with an increase in working capital items. 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. The Partnership management fee increased between the first six months of 1995 and 1996 due to an increase in distributable cash flow. General and administrative expenses decreased by $14,739 or 11% between the respective periods. The 1995 amount includes the final payment of professional fees associated with the ownership restructuring of the North Cabot Industrial Park investment. NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED JUNE 30, 1996 PART II OTHER INFORMATION ------------------- Item 6. Exhibits and Reports on Form 8-K a. Exhibits: None. b. Reports on Form 8-K: No Current Reports on Form 8-K were filed during the quarter ended June 30, 1996. 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 III; A REAL ESTATE LIMITED PARTNERSHIP (Registrant) August 13, 1996 /s/ Peter P. Twining ------------------------------- Peter P. Twining Managing Director and General Counsel of Managing General Partner, Copley Properties Company III, Inc. August 13, 1996 /s/ Daniel C. Mackowiak -------------------------------- Daniel C. Mackowiak Principal Financial and Accounting Officer of Managing General Partner, Copley Properties Company III, Inc. EX-27 2
5 6-MOS DEC-31-1996 JUN-30-1996 2466744 1009451 0 0 0 3476195 19154233 87689 22630428 101071 0 0 0 0 22529357 22630428 910160 997663 66114 66114 248703 0 0 682846 0 682846 0 0 0 682846 9.88 9.88
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