-----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, VB4N9Jbgnw45ncoe6QaO+o7da0lZUur06MVrDZkzwWtBLoe/NczxtjVf28hf0MbB 9A1AtPyO2aNXShd/pcbN1w== 0000927016-97-001457.txt : 19970515 0000927016-97-001457.hdr.sgml : 19970515 ACCESSION NUMBER: 0000927016-97-001457 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 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: 97605155 BUSINESS ADDRESS: STREET 1: 399 BOYLSTON ST 13TH FLR CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 6175781200 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 March 31, 1997 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) 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 NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED MARCH 31, 1997 PART I FINANCIAL INFORMATION --------------------- BALANCE SHEET (Unaudited)
March 31, 1997 December 31, 1996 -------------- ----------------- ASSETS Real estate investments: Joint ventures $17,759,249 $17,762,647 Property, net 1,227,330 1,265,968 ----------- ----------- 18,986,579 19,028,615 Cash and cash equivalents 1,423,240 1,260,892 Short-term investments 942,075 1,169,666 ----------- ----------- $21,351,894 $21,459,173 =========== =========== LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 72,838 $ 74,172 Accrued management fee 45,655 45,792 ----------- ----------- Total liabilities 118,493 119,964 ----------- ----------- Partners' capital (deficit): Limited partners ($485.54 per unit; 75,000 units authorized, 68,414 units issued and outstanding) 21,286,594 21,391,344 General partners (53,193) (52,135) ----------- ----------- Total partners' capital 21,233,401 21,339,209 ----------- ----------- $21,351,894 $21,459,173 =========== ===========
(See accompanying notes to financial statements) STATEMENT OF OPERATIONS (Unaudited)
Quarter Ended March 31, ------------------------- 1997 1996 ------------ ----------- Investment Activity Property rentals $ 62,785 $ 45,376 Property operating expenses (17,298) (32,441) Depreciation and amortization (33,425) (8,462) -------- -------- 12,062 4,473 Joint venture earnings 421,261 387,747 Amortization (2,366) (2,366) -------- -------- Total real estate operations 430,957 389,854 Interest on cash equivalents and short-term investments 26,251 43,544 -------- -------- Total investment activity 457,208 433,398 -------- -------- Portfolio Expenses General and administrative 54,357 51,950 Management fee 45,655 46,338 -------- -------- 100,012 98,288 -------- -------- Net Income $357,196 $335,110 ======== ======== Net income per limited partnership unit $ 5.17 $ 4.85 ======== ======== Cash distributions per limited partnership unit $ 6.70 $ 6.16 ======== ======== Number of limited partnership units outstanding during the period 68,414 68,414 ======== ========
(See accompanying notes to financial statements) STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited)
Quarter Ended March 31, --------------------------------- 1997 1996 -------- ------- General Limited General Limited Partners Partners Partners Partners -------- -------- -------- -------- Balance at beginning of period $(52,135) $21,391,344 $(43,319) $22,784,048 Cash distributions (4,630) (458,374) (4,257) (421,430) Net income 3,572 353,624 3,351 331,759 -------- ----------- -------- ----------- Balance at end of period $(53,193) $21,286,594 $(44,225) $22,694,377 ======== =========== ======== ===========
(See accompanying notes to financial statements) SUMMARIZED STATEMENT OF CASH FLOWS (Unaudited)
Quarter Ended March 31, ----------------------- 1997 1996 ------- ------- Net cash provided by operating activities $ 407,915 $ 384,305 ---------- ---------- Cash flows from investing activities: Capital expenditures on owned property - (901) Decrease in short-term investments, net 217,437 762,916 ---------- ---------- Net cash provided by investing activities 217,437 762,015 ---------- ---------- Cash flows from financing activity: Distributions to partners (463,004) (425,687) ---------- ---------- Net increase in cash and cash equivalents 162,348 720,633 Cash and cash equivalents: Beginning of period 1,260,892 1,399,905 ---------- ---------- End of period $1,423,240 $2,120,538 ========== ==========
(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 March 31, 1997 and December 31, 1996 and the results of its operations, its cash flows and changes in partners' capital (deficit) for the interim periods ended March 31, 1997 and 1996. These adjustments are of a normal recurring nature. See notes to financial statements included in the Partnership's 1996 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 the three investments it currently owns prior to the end of 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 two joint ventures:
Assets and Liabilities ---------------------- March 31, 1997 December 31, 1996 -------------- ----------------- Assets Real property, at cost less accumulated depreciation of $4,938,809 and $4,812,441 $15,204,834 $15,325,895 Other assets 776,320 659,368 ----------- ----------- 15,981,154 15,985,263 Liabilities 112,813 115,892 ----------- ----------- Net Assets $15,868,341 $15,869,371 =========== ===========
Results of Operations
Quarter ended March 31, -------------------------- 1997 1996 ---- ---- Revenue Rental income $789,405 $771,631 Other 647 480 -------- -------- 790,052 772,111 -------- -------- Expenses Operating expenses 242,422 249,353 Depreciation and amortization 126,369 135,011 -------- -------- 368,791 384,364 -------- -------- Net income $421,261 $387,747 ======== ========
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 one wholly- owned property:
March 31, 1997 December 31, 1996 -------------- ----------------- Land $ 347,772 $ 347,772 Buildings and improvements 1,031,512 1,031,512 Accumulated depreciation and amortization (168,190) (138,503) Net operating assets (liabilities) 16,236 25,187 ---------- ---------- $1,227,330 $1,265,968 ========== ==========
NOTE 4 - SUBSEQUENT EVENT - ------------------------- Distributions of cash from operations relating to the quarter ended March 31, 1997 were made on April 24, 1997 in the aggregate amount of $461,622 ($6.68 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 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. The Partnership made nine real estate investments, six of which were sold prior to 1994. As a result of the sales, capital of $35,196,266 has been returned to the limited partners through March 31, 1997. At March 31, 1997, the Partnership had $2,365,315 in cash, cash equivalents and short-term investments, of which $461,622 was used for operating cash distributions to partners on April 24, 1997; the remainder is being retained as working capital reserves. On October 24, 1996, the Partnership made a capital distribution of $519,946 ($7.60 per limited partnership unit) representing undistributed proceeds from the sales of various properties prior to 1994. The adjusted capital contribution after this distribution was $485.54 per unit. Also on October 24, 1996, the Partnership made a special operating cash distribution of $364,186 ($5.27 per limited partnership unit) attributable to a discretionary reduction of previously accumulated cash reserves. The source of future liquidity and cash distributions to partners will primarily be cash generated by the Partnership's investments and proceeds from the sale of investments. Distributions of cash from operations for the first quarter of 1997 and 1996 were made at the annualized rate of 5.5% on the adjusted capital contribution. The carrying value of real estate investments in the financial statements at March 31, 1997 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 March 31, 1997, the appraised value of each real estate investment exceeded its related carrying value; the aggregate excess was approximately $6,100,000. The current appraised value of real estate investments has been determined 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 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 remained at 100% during the first quarter of 1997. (Occupancy was 72% at March 31, 1996.) Occupancy at Bayberry Apartments increased slightly to 90% during the first quarter. (Occupancy was 89% at December 31, 1996 and 95% at March 31, 1996.) Occupancy at 270 Technology Park improved from 98% to 99% during the first quarter of 1997; however, a tenant representing 18% of the space vacated upon expiration of their lease on March 31, 1997. (Occupancy was 98% at March 31, 1996.) Investment Results Interest on cash equivalents and short-term investments decreased by approximately $17,000, or 40%, between the first three months of 1996 and 1997, primarily due to lower invested balances as a result of additional distributions from reserves in October 1996. Real estate operating results were $430,957 for the first three months of 1997 as compared to $389,854 for the comparable period of 1996. The improvement was primarily due to an increase in rental revenue at 270 Technology Park. At North Cabot, higher revenue attributable to the increase in occupancy was partially offset by increased amortization expense, commencing in mid-1996, related to certain tenant improvements. The increase in cash flow from operations approximated the improvement in net income between the two three-month periods, as decreases in working capital were offset by the timing of cash distributions from Bayberry. Portfolio Expenses General and administrative expenses primarily consist of real estate appraisal, legal, accounting, printing and servicing agent fees. These expenses increased by approximately $2,000 or 5%, between the first three months of 1996 and 1997 primarily due to an increase in legal fees, partially offset by decreased investor servicing fees. 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. Management fees decreased slightly between the two three-month periods consistent with the decrease in distributable cash flow. NEW ENGLAND LIFE PENSION PROPERTIES III; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED MARCH 31, 1997 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 March 31, 1997. 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) May 14, 1997 /s/ James J. Finnegan ------------------------------- James J. Finnegan Managing Director and General Counsel of Managing General Partner, Copley Properties Company III, Inc. May 14, 1997 /s/ Daniel C. Mackowiak -------------------------------- Daniel C. Mackowiak Principal Financial and Accounting Officer of Managing General Partner, Copley Properties Company III, Inc. EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1997 MAR-31-1997 1,423,240 942,075 0 0 0 2,365,315 18,986,579 168,190 21,351,,894 118,493 0 0 0 0 21,233,401 21,351,894 484,046 510,297 17,298 17,298 135,803 0 0 357,196 0 357,196 0 0 0 357,196 5.17 5.17
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