-----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, IWWBm87NbZa9kZ6Z5vMg8EX0q2ur/wfws9sJQi2TKJeepSfvcYOBbevkBR2RhVQv BefI+7j5+D8F4kwz7u4I3A== 0000927016-01-503577.txt : 20020410 0000927016-01-503577.hdr.sgml : 20020410 ACCESSION NUMBER: 0000927016-01-503577 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011109 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: 1779252 BUSINESS ADDRESS: STREET 1: 225 FRANKLIN STREET 25TH FLOOR CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6172619000 MAIL ADDRESS: STREET 1: 225 FRANKLIN STREET STREET 2: 25TH FLOOR CITY: BOSTON STATE: MA ZIP: 02110 10-Q 1 d10q.txt 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, 2001 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) World Trade Center East, 16th Floor Two Seaport Lane Boston, Massachusetts 02210 (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 NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 2001 PART I FINANCIAL INFORMATION ---------------------- 2 NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP STATEMENTS OF NET ASSETS IN LIQUIDATION September 30, 2001 December 31, 2000 (Unaudited) (Audited) ------------------ ----------------- ASSETS Other assets $ -- $ 50,000 Cash and cash equivalents 652,889 691,321 --------------- ------------- $ 652,889 $ 741,321 =============== ============= LIABILITIES AND NET ASSETS IN LIQUIDATION Accounts payable $ 5,424 $ 88,935 Accrued expenses for liquidation 159,513 193,000 --------------- ------------- Total liabilities 164,937 281,935 --------------- ------------- Net Assets in liquidation: Limited partners ($88.60 per unit; 75,000 units authorized, 68,414 units issued and outstanding) 477,035 448,755 General partners 10,917 10,631 --------------- ------------- Total partners' capital 487,952 459,386 --------------- ------------- $ 652,889 $ 741,321 =============== ============= (See accompanying notes to unaudited financial statements) 3 NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP STATEMENTS OF CHANGES OF NET ASSETS IN LIQUIDATION (Unaudited) Three Months Ended Nine Months Ended September 30, 2001 September 30, 2001 ------------------ ------------------ Net assets in liquidation at beginning of period $ 482,696 $ 459,386 ----------- ----------- Increase during period: Operating activities Interest income 5,256 28,566 ----------- ----------- Net change in net assets in liquidation 5,256 28,566 ----------- ----------- Net assets in liquidation at end of period $ 487,952 $ 487,952 =========== =========== (See accompanying notes to unaudited financial statements) 4 NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Nine Months Ended September 30, 2000 September 30, 2000 ------------------ ------------------ INVESTMENT ACTIVITY Property rentals $ 239,089 $ 689,160 Property operating expenses (81,976) (130,604) Depreciation and amortization -- (112,074) --------------- -------------- Total real estate activity 157,113 446,482 Interest on cash equivalents 5,267 13,801 --------------- -------------- Total investment activity 162,380 460,283 --------------- -------------- PORTFOLIO EXPENSES General and administrative 55,232 158,687 Management fee -- 26,655 --------------- -------------- 55,232 185,342 --------------- -------------- Net Income $ 107,148 $ 274,941 =============== ============== Net income per limited partnership unit $ 1.55 $ 3.98 =============== ============== Cash distributions per limited partnership unit $ 1.95 $ 5.88 =============== ============== Number of limited partnership units outstanding during the period 68,414 68,414 =============== ============== (See accompanying notes to unaudited financial statements) 5 NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP SUMMARIZED STATEMENT OF CASH FLOWS (Unaudited) Nine Months Ended September 30, 2000 ------------------ Net cash provided by operating activities $ 471,675 --------- Cash flows from financing activity: Investment in property (85,753) --------- Net cash used in investing activities (85,753) --------- Cash flows from financing activity: Distributions to partners (406,337) --------- Net decrease in cash and cash equivalents (20,415) Cash and cash equivalents: Beginning of period 324,989 --------- End of period $ 304,574 ========= (See accompanying notes to unaudited financial statements) 6 NEW ENGLAND LIFE PENSION PROPERTIES III; 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, 2001 and December 31, 2000 and the changes of net assets in liquidation and the results of its operations for the three and nine month periods ended September 30, 2001 and 2000, respectively, and its cash flows for the nine months ended September 30, 2000. These adjustments are of a normal recurring nature. See notes to financial statements included in the Partnership's 2000 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. 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 July 1985 and had disposed of all of its investments as of December 31, 2000. On December 31, 2000, the Partnership adopted a plan of liquidation and intends to dissolve in 2001. In connection with its adoption of a plan of liquidation on December 31, 2000, the Partnership also adopted the liquidation basis of accounting which, among other things, requires that assets and liabilities be stated at their estimated net realizable value and that estimated costs of liquidating the Partnership be provided to the extent that they are reasonably determinable. NOTE 2 - PROPERTY - ----------------- Effective January 1, 1998, the management and control of the business and affairs of the 270 Technology Park joint venture, including the sale of the property, was vested solely in the Partnership through its 98% general partner interest in the joint venture. Accordingly, as of January 1, 1998, the investment was accounted for as a wholly-owned property. The remaining 2% general partner interest was owned by NELPP III/MORF III Associates Limited Partnership, an entity in which the Partnership owns a 50% interest. The carrying value of the joint venture investment on January 1, 1998 ($6,162,959) was allocated to land, building and improvements, and other net operating assets. The building was being depreciated over 30 years, beginning January 1, 1998. 7 NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP On October 31, 2000, the Partnership sold its partnership interests and all related property rights to its 50% partner in NELPP III/MORF III Associates Limited Partnership for a gross sales prices of $6,732,467. The Partnership received net proceeds of $6,800,575, which included a reimbursement of approximately $90,000 for leasing commissions previously paid by the Partnership, which, per the purchase and sale agreement, were the responsibility of the buyer. The Partnership recognized a gain of $1,110,277 ($16.07 per limited partnership unit). On November 29, 2000, the Partnership made a capital distribution of $6,499,330 ($95.00 per limited partnership unit) from the proceeds of the sale. NOTE 3 - ACCRUED EXPENSES FOR LIQUIDATION - ----------------------------------------- Accrued expenses for liquidation as of September 30, 2001 include estimates of costs to be incurred in carrying out the dissolution and liquidation of the Partnership. These costs include estimates of legal fees, accounting fees, tax preparation and filing fees and other professional services. During the three and nine month periods ended September 30, 2001, the Partnership incurred $1,229 and $33,487, respectively, of such expenses. The actual costs could vary from the related provisions due to the uncertainty related to the length of time required to complete the liquidation and dissolution of the Partnership. The accrued expenses do not take into consideration the possible litigation arising from the customary representations and warranties made as part of each sale. Such costs are unknown and are not estimable at this time. 8 NEW ENGLAND LIFE PENSION PROPERTIES III; 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 December 1985 and 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. As of December 31, 2000, the Partnership had sold all of its real estate investments: six of which were sold prior to 1994 and one of which was sold in each of 1998, 1999 and 2000. As a result of the sales and similar transactions, capital of $62,352,590 ($911.40 per limited partnership unit) has been returned to the limited partners through September 30, 2001. At September 30, 2001, the Partnership had $652,889 in cash and cash equivalents, which is being retained primarily as a reserve in connection with the liquidation of the Partnership. The Partnership intends to liquidate and dissolve in 2001. Distributions of cash from operations for the first and second quarters of 2000 were made at the annualized rate of 4.25% on the adjusted capital contribution of $183.60 per limited partnership unit. Due to the sale of the last remaining asset in October 2000, distributions were suspended effective the third quarter of 2000 to enable the Partnership to meet its fund level obligations for the remainder of its lifecycle. Results of Operations - --------------------- Operating Factors On October 31, 2000 the Partnership sold its partnership interests and all related property rights in the entity owning 270 Technology Park and recognized a gain of $1,110,277. At the time of the sale, the buildings were 83% leased. Investment Results There are no comparative real estate operating results for the three and nine month periods ended September 30, 2001 and 2000, due to the sale of the Partnership's last remaining property in October 2000, as discussed above. Portfolio Expenses General and administrative expenses primarily consist of state taxes, real estate appraisal, legal, accounting, printing and servicing agent fees. General and administrative expenses for the three and nine month periods ended September 30, 2000 were $55,232 and $158,687, respectively. 9 NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP 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. There was no management fee incurred during the first three quarters of 2001 due to the discontinuance of operating cash distributions as a result of the sale of the Partnership's last remaining property in 2000 as discussed above. Costs to dissolve and liquidate the Partnership include legal fees, accounting fees, tax preparation fees, filing fees and other professional services. During the three and nine month periods ended September 30, 2001, the Partnership incurred $1,229 and $33,487, respectively, of such expenses. 10 NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 2001 PART II OTHER INFORMATION ----------------- Item 6. Reports on Form 8-K Reports on Form 8-K: No reports on Form 8-K were filed during the quarter ended September 30, 2001. 11 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) November 9, 2001 /s/ Alison L. Husid -------------------------------- Alison L. Husid President, Chief Executive Officer and Director of Managing General Partner, Copley Properties Company III, Inc. November 9, 2001 /s/ Jonathan Martin -------------------------------- Jonathan Martin Principal Financial and Accounting Officer of Managing General Partner, Copley Properties Company III, Inc. 12 -----END PRIVACY-ENHANCED MESSAGE-----