-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, DNyrKCvOxNqQzdtQO7BxdOVRqWpG3H+pZiVTaPKfQ0NqHyJtg/5+PclbisyNykIJ LCw1goryMrQjwL4NVl1yfQ== 0000779742-95-000002.txt : 19950814 0000779742-95-000002.hdr.sgml : 19950814 ACCESSION NUMBER: 0000779742-95-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW ENGLAND LIFE PENSION PROPERTIES IV CENTRAL INDEX KEY: 0000779742 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 042893298 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15429 FILM NUMBER: 95561540 BUSINESS ADDRESS: STREET 1: 399 BOYLSTON ST 13TH FL 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, 1995 Commission File Number 0-15429 NEW ENGLAND LIFE PENSION PROPERTIES IV; A REAL ESTATE LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) Massachusetts 04-2893298 (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 IV; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED JUNE 30, 1995 PART I FINANCIAL INFORMATION NEW ENGLAND LIFE PENSION PROPERTIES IV; A REAL ESTATE LIMITED PARTNERSHIP BALANCE SHEET (Unaudited) JUNE 30, 1995 DECEMBER 31, 1994 ASSETS Real estate investments: Real estate joint ventures $ 41,012,776 $ 53,837,786 Property, net 12,218,756 - ----------- --------------- 53,231,532 53,837,786 Cash and cash equivalents 6,725,800 12,370,267 Short-term investments 586,494 922,981 Other receivables - 13,976 ----------- --------------- $ 60,543,826 $ 67,145,010 =========== =============== Liabilities and Partners' Capital Accounts payable $ 76,460 $ 127,950 Accrued management fee 163,449 65,340 Deferred management and disposition fees 2,682,934 2,797,930 ----------- --------------- Total liabilities 2,922,843 2,991,220 ----------- --------------- Commitments to fund real estate investments Partners' capital (deficit): Limited partners ($863 and $918 per unit, respectively; 120,000 units authorized, 94,997 units issued and outstanding) 57,769,418 64,289,145 General partners (148,435) (135,355) ----------- --------------- Total partners' capital 57,620,983 64,153,790 ----------- --------------- $ 60,543,826 $ 67,145,010 =========== =============== (See accompanying notes to financial statements) NEW ENGLAND LIFE PENSION PROPERTIES IV; A REAL ESTATE LIMITED PARTNERSHIP STATEMENT OF OPERATIONS (Unaudited)
QUARTER ENDED SIX MONTHS ENDED QUARTER ENDED SIX MONTHS ENDED JUNE 30, 1995 JUNE 30, 1995 JUNE 30, 1994 JUNE 30, 1994 INVESTMENT ACTIVITY Property rentals $ 621,520 $ 1,178,860 $ - $ - Property operations expense (166,147) (292,467) - - Depreciation and amortization (97,291) (250,208) - - ---------- ------------- ---------- ------------ 358,082 636,185 - - Joint venture earnings 753,011 1,688,294 894,951 1,783,085 Amortization (4,844) (9,689) (6,632) (13,265) ---------- ------------- ---------- ------------ Total real estate operations 1,106,249 2,314,790 888,319 1,769,820 Interest on cash equivalents and short-term investments 104,775 236,602 86,106 155,796 ---------- ------------- ---------- ------------ Total investment activity 1,211,024 2,551,392 974,425 1,925,616 ---------- ------------- ---------- ------------ Portfolio Expenses Management fee 122,898 324,755 119,766 228,714 General and administrative 87,059 172,291 93,964 157,185 ---------- ------------- ---------- ------------ 209,957 497,046 213,730 385,899 ---------- ------------- ---------- ------------ Net income $ 1,001,067 $ 2,054,346 $ 760,695 $ 1,539,717 ========== ============= ========== ============ Net income per limited partnership unit $ 10.43 $ 21.41 $ 7.93 $ 16.05 ========== ============= ========== ============ Cash distributions per limited partnership unit $ 21.27 $ 90.04 $ 11.48 $ 21.95 ========== ============= ========== ============ Number of limited partnership units outstanding during the period 94,997 94,997 94,997 94,997 ========== ============= ========== ============ (See accompanying notes to financial statements)
NEW ENGLAND LIFE PENSION PROPERTIES IV; A REAL ESTATE LIMITED PARTNERSHIP SUMMARIZED STATEMENT OF CASH FLOWS (Unaudited) SIX MONTHS ENDED JUNE 30, 1995 1994 NET CASH PROVIDED BY OPERATING ACTIVITIES $ 2,667,029 $3,182,890 ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Investment in joint ventures - (552,562) Investment in property (52,406) - Decrease in short-term investments, net 328,063 3,910,370 ---------- ---------- Net cash provided by investing activities 275,657 3,357,808 ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Distributions to partners (8,587,153) (2,106,246) ---------- ---------- Net increase (decrease) in cash and cash equivalents (5,644,467) 4,434,452 Cash and cash equivalents: Beginning of period 12,370,267 2,146,673 ---------- ---------- End of period $ 6,725,800 $6,581,125 ========== ========== Non-cash transaction: Effective January 1, 1995, the Partnership's joint venture investment in Palms Business Center was converted to a wholly-owned property. The carrying value of this investment at conversion was $12,519,961. (See accompanying notes to financial statements) NEW ENGLAND LIFE PENSION PROPERTIES IV; A REAL ESTATE LIMITED PARTNERSHIP STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited)
Quarter Ended Six Months Ended Quarter Ended Six Months Ended June 30, 1995 June 30, 1995 June 30, 1994 June 30, 1994 General Limited General Limited General Limited General Limited Partners Partners Partners Partners Partners Partners Partners Partners Bal. at beginning of period $(138,036) $ 58,798,948 $(135,355) $ 64,289,145 $(129,750) $64,834,086 $(127,594) $65,057,473 Cash distributions (20,410) (2,020,586) (33,623) (8,553,530) (11,116) (1,090,565) (21,062) (2,085,184) Net income 10,011 991,056 20,543 2,033,803 7,607 753,088 15,397 1,524,320 ---------- ----------- --------- ----------- --------- ----------- --------- ----------- Balance at end of period$(148,435) $ 57,769,418 $(148,435) $57,769,418 $(133,259) $64,496,609 $(133,259) $64,496,609 ========= =========== ========= =========== ========= =========== ========= =========== (See accompanying notes to financial statements)
NEW ENGLAND LIFE PENSION PROPERTIES IV; 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 June 30, 1995 and December 31, 1994 and the results of its operations and its cash flows for the interim periods ended June 30, 1995 and 1994. These adjustments are of a normal recurring nature. See notes to financial statements included in the Partnership's 1994 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 IV; 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 May, 1986 and acquired the six real estate investments it currently owns prior to the end of 1987. It intends to dispose of the investments within eight to twelve years of their acquisition, and then liquidate. NOTE 2 - REAL ESTATE JOINT VENTURES In the second quarter of 1995, the Palms Business Center investment was converted to a wholly-owned property effective January 1, 1995. Accordingly, amounts previously reported as joint venture earnings in the first quarter of 1995 have been reclassified in the Statement of Operations. This reclassification had no effect on the Partnership's operating results. The following summarized financial information is presented in the aggregate for the Partnership's joint ventures: ASSETS AND LIABILITIES JUNE 30, 1995 DECEMBER 31, 1994 Assets Real property, at cost less accumulated depreciation of $10,491,517 and $12,483,694, respectively $41,559,417 $52,351,990 Other 1,300,804 1,881,118 ----------- ----------- 42,860,221 54,233,108 Liabilities (453,100) (644,808) ----------- ----------- Net assets $42,407,121 $53,588,300 =========== =========== RESULTS OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1995 1994 Revenue Rental income $3,871,198 $4,228,337 Other income 72,941 271,460 ---------- ---------- 3,944,139 4,499,797 ---------- ---------- Expenses Operating expenses 1,201,327 1,415,780 Depreciation and amortization 874,597 1,281,446 ---------- ---------- 2,075,924 2,697,226 ---------- ---------- Net income $1,868,215 $1,802,571 ========== ========== Liabilities and expenses exclude amounts owed and attributable to the Partnership and (with respect to one joint venture) its affiliates on behalf of its various financing arrangements with the joint ventures. The Partnership's Rancho Cucamonga investment was sold on December 30, 1994. The above 1994 amounts include the results of operations for this investment. A capital distribution of $55 per limited partnership unit was made in January 1995 from the proceeds of this sale. NOTE 3 - PROPERTY Effective January 1, 1995, the Palms Business Center joint venture was restructured and the venture partner's ownership interest assigned to the Partnership. Accordingly, as of this date, the investment is being accounted for as a wholly-owned property. The carrying value of the joint venture investment at conversion was allocated to land, building and improvements, amount payable to developer and other net operating liabilities. The former venture partner will receive 40% of the excess cash flow above a specified level until its cash investment of $360,000 is repaid in full. The following is a summary of the Partnership's investment at June 30, 1995: Land $ 3,072,333 Buildings, improvements and other capitalized costs 9,781,461 Accumulated depreciation and amortization (250,208) Payable to developer (280,000) Net operating liabilities (104,830) ----------- $12,218,756 =========== The buildings and improvements are being depreciated over 25 years, beginning January 1, 1995. NOTE 4 - SUBSEQUENT EVENT Distributions of cash from operations relating to the quarter ended June 30, 1995 were made on July 27, 1995 in the aggregate amount of $1,242,638 ($12.95 per limited partnership unit). NEW ENGLAND LIFE PENSION PROPERTIES IV; 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, 1986. A total of 94,997 units were sold. The Partnership received proceeds of $85,677,259, net of selling commissions and other offering costs, which have been invested in real estate, used to pay related acquisition costs or retained as working capital reserves. The Partnership made nine real estate investments. Three investments have been sold; one in 1988 and one each in 1993 and 1994. On December 30, 1994, the Partnership's Rancho Cucamonga joint venture sold its property and the Partnership received net sale proceeds of $5,261,275. On January 26, 1995, the Partnership made a capital distribution of $55 per limited partnership unit ($5,224,835) from the proceeds of the sale. The adjusted capital contribution after this distribution is $863 per unit. At June 30, 1995, the Partnership had $7,312,294 in cash, cash equivalents and short-term investments, of which $1,242,638 was used for cash distributions to partners on July 27, 1995; the remainder will primarily be used to complete the funding of investment commitments and for working capital reserves. The source of future liquidity and cash distributions to partners will be cash generated by the Partnership's real estate and short-term investments. Distributions of cash from operations for the second quarter of 1995 were at the annualized rate of 6% on the adjusted capital contribution noted above. Distributions of cash from operations relating to the first quarter of 1995 were made at the annualized rate of 6% on a weighted average adjusted capital contribution; in addition, a special distribution totaling $776,289 ($8.09 per limited partnership unit) was made which is attributable to a discretionary reduction of cash reserves which had been previously accumulated through operating activities. Since the total quarterly distribution exceeded the annualized rate of 8%, previously deferred management fees to the advisor became currently payable in the amount of $175,000 or 50% of the excess distribution. The managing general partner will continue to evaluate reserve levels in the context of the Partnership's investment objectives. Distributions of cash from operations relating to the first and second quarters of 1994 were at the annualized rates of 5% and 5.5% on an adjusted capital contribution of $918 per unit. The carrying value of real estate investments in the financial statements is at cost or is reduced to its lower net realizable value if the investment's carrying value is determined not to be recoverable through expected undiscounted future cash flows. Carrying value may be greater or less than current appraised value. At June 30, 1995, certain appraised values exceeded the related carrying values by an aggregate of $8,300,000 and certain appraised values were less than their related carrying values by an aggregate of $1,900,000. 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 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 The investments currently in the portfolio are structured as joint ventures with real estate development/management firms. The Rancho Cucamonga investment, which property was sold in December 1994, was also structured as a joint venture. Effective January 1, 1995, the Palms Business Center joint venture was restructured and converted to a wholly-owned property. OPERATING FACTORS Overall occupancy at the Columbia Gateway Corporate Park remained at 92% during the first six months of 1995 (occupancy was 82% one year prior). Occupancy at Reflections ended the second quarter of 1995 at 95%, consistent with one year ago. Although the Fort Myers apartment market remains competitive, rental rates have improved. Occupancy at Metro Business Center at June 30, 1995 was 98%, consistent with the previous quarter, but down slightly from 100% one year ago. Rental rates have begun to increase as the Phoenix market appears to have stabilized. However, this property faces leasing exposure during 1995 as 18% of the leases are due to expire. Leasing at Decatur TownCenter II decreased slightly from 100% to 98% during the second quarter of 1995 (occupancy was 98% one year prior). Occupancy at Palms Business Center increased to 99% at June 30, 1995 (up from 97% and 98% one quarter and one year prior, respectively). The overall health of the Las Vegas market has improved and there appears to be some upward movement in rental rates. Discussions were concluded with the venture partner to restructure this joint venture during the second quarter of 1995, and effective January 1, 1995, the venture partner's ownership interest was assigned to the Partnership, thereby giving sole control of the property to the Partnership. Leasing at 270 Technology Center was 70% at June 30, 1994 and increased to 100% during the third quarter of 1994 where it has remained through the second quarter of 1995. However, during 1995 approximately 14% of the leases at this property are due to expire. INVESTMENT ACTIVITY Interest on cash equivalents and short-term investments increased during the first six months of 1995 as compared to the same period of 1994 as a result of larger invested balances, as well as an increase in interest rates. Invested balances were higher due to the temporary investment of proceeds from the Rancho Cucamonga sale. Exclusive of the operating results from Rancho Cucamonga, real estate operating activity for the first six months of 1995 and 1994 was $2,314,790 and $1,616,720, respectively. This 43% increase was due to improved operating results at all of the Partnership's investments. Improvement was most notable at Columbia Gateway Corporate Park, at which results increased by approximately $338,000 due to improvements in occupancy. Improved occupancy also resulted in a $60,000 increase in results from 270 Technology Center. Net operating income at Metro Business Center and Palms Business Center improved by $84,000 and $124,000, respectively, primarily due to increases in rental rates. Net operating income also increased at Decatur TownCenter II by $56,000, due to the receipt of a loan termination fee of $205,000 during the first quarter of 1995, partially offset by a decrease in other rental revenue and an increase in operating expenses. Notwithstanding the improved real estate operating results and $234,173 in cash flow from Rancho Cucamonga in 1994, operating cash flow from investments currently owned for the first six months of 1995 decreased $281,688 or 10% as compared to the comparable period in 1994. This decrease was primarily due to Columbia Gateway Corporate Park and 270 Technology Park retaining working capital reserves at the joint venture level during the first six months of 1995. These decreases were partially offset by an increase in operating cash flow from Metro Business Center due to the timing of distributions. Operating cash flow from the remainder of the Partnership's investments was consistent with the change in operating results. 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 management fee increased between the six months ended June 30, 1994 and 1995 due to an increase in distributable cash flow from operations. The increase is primarily attributable to the discretionary reduction in cash reserves noted previously. General and administrative expenses increased approximately $15,000 between these respective periods primarily due to increased professional fees. NEW ENGLAND LIFE PENSION PROPERTIES IV; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED JUNE 30, 1995 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K a. Exhibits: NONE. b. Reports on Form 8-K: No reports on Form 8-K were filed during the quarter ended June 30, 1995. 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 IV; A REAL ESTATE LIMITED PARTNERSHIP (Registrant) August 11, 1995 Peter P. Twining Managing Director and General Counsel of Managing General Partner, Fourth Copley Corp. August 11, 1995 Marie A. Welch Investment Officer and Chief Accounting Officer of Managing General Partner, Fourth Copley Corp. EX-27 2
5 6-MOS DEC-31-1995 JUN-30-1995 6725800 586494 0 0 0 7312294 53231532 0 60543826 2922843 0 0 0 0 57620983 60543826 0 3103756 0 0 1049410 0 0 2054346 0 2054346 0 0 0 2054346 21.41 21.41
-----END PRIVACY-ENHANCED MESSAGE-----