-----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, Mqd+KxsCDyqEvYSALm8ehyFT2mt2gqUhCOIBwHFp+ahaPDuZaTaL5PyQdMFthxja P7X8a9gyR01avYhIy8iYQw== 0000927016-01-001521.txt : 20010328 0000927016-01-001521.hdr.sgml : 20010328 ACCESSION NUMBER: 0000927016-01-001521 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010327 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-K SEC ACT: SEC FILE NUMBER: 000-15429 FILM NUMBER: 1580718 BUSINESS ADDRESS: STREET 1: 225 FRANKLIN ST 25TH FL CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6172619000 10-K 1 0001.txt FORM 10-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------- FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 Commission File No. 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 incorporation or organization) Identification No.) World Trade Center East Two Seaport Lane, 16th Floor Boston, Massachusetts 02210 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 261-9000 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Units of Limited Partnership Interest (Title of Class) 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 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 |_| Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. |X| No voting stock is held by non-affiliates of the Registrant. DOCUMENTS INCORPORATED BY REFERENCE None PART I Item 1. Business. New England Life Pension Properties IV; A Real Estate Limited Partnership (the "Partnership") was organized under the Uniform Limited Partnership Act of the Commonwealth of Massachusetts on October 16, 1985, to invest primarily in newly constructed and existing income-producing real properties. The Partnership was initially capitalized with contributions of $2,000 in the aggregate from Fourth Copley Corp. (the "Managing General Partner") and CCOP Associates Limited Partnership (the "Associate General Partner") (collectively, the "General Partners") and $10,000 from Copley Real Estate Advisors, Inc. (the "Initial Limited Partner"). The Partnership filed a Registration Statement on Form S-11 (the "Registration Statement") with the Securities and Exchange Commission on November 12, 1985, with respect to a public offering of 60,000 units of limited partnership interest at a purchase price of $1,000 per unit (the "Units") with an option to sell up to an additional 60,000 Units (an aggregate of $120,000,000). The Registration Statement was declared effective on January 3, 1986. The first sale of Units occurred on May 29, 1986, at which time the Initial Limited Partner withdrew its contribution from the Partnership. Investors were admitted to the Partnership thereafter at monthly closings; the offering terminated and the last group of subscription agreements was accepted by the Partnership on December 31, 1986. As of January 31, 1987, a total of 94,997 Units had been sold, a total of 17,207 investors had been admitted as limited partners (the "Limited Partners") and a total of $94,348,550 had been contributed to the capital of the Partnership. The remaining 25,003 Units were de-registered on February 23, 1987. As of December 31, 2000, the Partnership had disposed of all its real estate investments. The Partnership plans to liquidate and dissolve in 2001. The Partnership sold its last remaining real estate asset in 2000, as described below. In December 1988, the Partnership sold another one of its investments and received sale proceeds of $10,577,476 which were substantially reinvested. Seven other investments have been sold. One investment in Atlanta, Georgia was sold on August 6, 1993, resulting in sale proceeds of $7,917,000. Capital was distributed to the Limited Partners in October 1993, in the amount of $82 per Unit. A second investment in Rancho Cucamonga, California was sold on December 30, 1994, resulting in sale proceeds of $5,261,275. On January 26, 1995, capital of $5,224,835 ($55 per Unit) was distributed to the Limited Partners. A third investment located in Decatur, Georgia was sold on October 10, 1996, resulting in sale proceeds of $9,333,325. On October 24, 1996, capital of $9,214,709 ($97 per unit) was distributed to the Limited Partners. A fourth investment located in Las Vegas, Nevada was sold on October 24, 1997, resulting in sale proceeds of $22,983,007. On November 25, 1997, the Partnership made a capital distribution of $22,989,274 ($242 per Limited Partnership Unit) from the proceeds of the sale and prior sales proceeds previously held in reserves. A fifth investment located in Phoenix, Arizona was sold on September 23, 1998, resulting in net sale proceeds of $9,680,132. On October 29, 1998, the Partnership made a capital distribution of $9,689,694 ($102 per Limited Partnership Unit) from the proceeds of the sale and prior sales proceeds previously held in reserves. A sixth investment located in Fort Myers, Florida was sold on September 23, 1999, resulting in net proceeds of $12,773,052. On October 28, 1999, the Partnership made a capital distribution of $12,522,505 ($131.82 per Limited Partnership Unit) from the proceeds of the sale. A seventh investment located in Columbia, Maryland was sold on December 20, 1999 resulting in net proceeds of $13,423,827. On January 27, 2000 the Partnership made a capital distribution of $13,204,583 ($139.00 per Limited Partnership Unit) from the proceeds of the sale. An eighth investment located in Frederick, Maryland was sold on October 31, 2000, resulting in net proceeds of $5,202,429. On November 28, 2000, the Partnership made a capital distribution of $4,439,844 ($52.00 per Limited Partnership Unit) from the proceeds of the sale. The Partnership has no employees. Services are performed for the Partnership by the Managing General Partner and affiliates of the Managing General Partner. 2 Office/Research and Development Buildings in Frederick, Maryland ("270 Technology Center"). On December 22, 1987, the Partnership acquired a 50% interest in a joint venture formed with MORF Associates VI Limited Partnership. As of December 31, 1998, the Partnership had contributed $4,857,000 to the capital of the joint venture out of a maximum commitment of $5,150,000. The joint venture agreement entitled the Partnership to receive a preferred return on its invested capital at the rate of 10% per annum. Such preferred return was payable currently through September 30, 1988; thereafter, and until the termination of the joint venture's operations, to the extent that sufficient cash flow was not available therefor, the preferred return would accrue and bear interest at the rate of 10% per annum, compounded monthly. The joint venture agreement entitled the Partnership to receive 50% of the net proceeds of sales and financings after return of its equity and preferred return. As of July 3, 1990, the joint venture sold approximately 3.9 acres of land to an unrelated third party. In return, the joint venture received approximately $500,000 and a parcel of land consisting of approximately .4 acres. The joint venture owned approximately 8 acres of land in the 270 Technology Center in Frederick, Maryland, together with two one-story research and development/office buildings, containing approximately 73,360 square feet of space, located thereon. On October 31, 2000, the Partnership sold its 50% interest in the 270 Technology Park joint venture to its joint venture partner for a gross sales price of $5,941,783. The Partnership received its share of the net proceeds in the amount of $5,202,429. On November 28, 2000, the Partnership made a capital distribution of $4,939,844 ($52.00 per Limited Partnership Unit) from the proceeds of the sale. At the time of sale, the buildings were 100% leased. Item 2. Properties. The Partnership has disposed of all its real property investments. Item 3. Legal Proceedings The Partnership is not a party to, nor are any of its properties subject to, any material pending legal proceedings. Item 4. Submission of Matters to a Vote of Security Holders. No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this Annual Report on Form 10-K. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters. There is no active market for the Units. Trading in the Units is sporadic and occurs solely through private transactions. As of December 31, 2000, there were 15,948 holders of Units. 3 The Partnership's Amended and Restated Agreement of Limited Partnership dated May 29, 1986, as amended to date (the "Partnership Agreement"), requires that any Distributable Cash (as defined therein) be distributed quarterly to the Partners in specified proportions and priorities. There are no restrictions on the Partnership's present or future ability to make distributions of Distributable Cash. For the year ended December 31, 2000, cash distributions paid in 2000 or distributed after year end with respect to 2000 to the Limited Partners as a group totaled $6,228,953, including $4,939,844 ($52 per Limited Partnership Unit) from the proceeds of a property sale and $664,979 ($7.00 per Limited Partnership Unit) from capital previously held in reserves. For the year ended December 31, 1999, cash distributions paid in 1999 or distributed after year end with respect to 1999 to the Limited Partners as a group totaled $30,184,347, including $9,689,694 ($102 per Limited Partnership Unit) from the proceeds of property sales. Cash distributions exceeded net income in 2000 and 1999 and, therefore, resulted in a reduction of partners' capital. Reference is made to the Partnership's Statement of Partner's Capital (Deficit) and Statement of Cash Flows in Item 8 hereof. 4 Item 6. Selected Financial Data.
For Year For Year For Year For Year For Year Ended or Ended or Ended or Ended or Ended or as of : as of : as of : as of : as of : 12/31/00(1) 12/31/99(2) 12/31/98(3) 12/31/97(4) 12/31/96(5) ----------- ----------- ----------- ----------- ----------- Revenues $6,047,594 $ 8,913,259 $ 8,561,528 $16,837,755 $ 7,582,119 Net Income $5,409,596 $ 7,256,381 $ 5,988,711 $13,211,159 $ 4,392,513 Net Income per Unit of Limited Partnership Interest $ 56.38 $ 75.62 $ 62.41 $ 137.68 $ 45.78 Total Assets $2,253,578 $22,303,963 $30,706,031 $37,925,503 $50,710,887 Total Cash Distributions per Unit of Limited Partnership Interest, including amounts distributed after year end with respect to such year $ 65.57 $ 317.74 $ 137.17 $ 279.14 $ 147.71
(1) Revenues and net income includes a gain on the sale of property of $845,348 and $4,334,266 of other income resulting from the reversal of deferred disposition and management fees. Cash distributions include a return of capital of $59.00 per Limited Partnership Unit. (2) Revenues and net income includes a gain on the sales of properties of $7,510,818. Cash distributions include a return of capital of $285.00 per Limited Partnership Unit. (3) Revenues and net income includes a gain on the sale of property of $3,742,541. Cash distributions include a return of capital of $102.00 per Limited Partnership Unit. (4) Revenues and net income includes a gain on the sale of property of $10,482,458. Cash distributions include a return of capital of $242.00 per Limited Partnership Unit. (5) Revenues and net income includes a gain on the sale of a joint venture investment of $1,055,591. Cash distributions include a return of capital of $97.00 per Limited Partnership Unit. 5 Item 7 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; all of which have been sold: one each in 1988, 1993, 1994, 1996, 1997, 1998, 2000 and two in 1999. Capital of $87,587,234 ($922.00 per Limited Partnership Unit) has been returned to the limited partners through December 31, 2000. On August 21, 1998, the Reflections joint venture sold a parcel of land to the City of Fort Myers. The Partnership received net proceeds totaling $67,881 and recognized a gain of $35,591. On September 23, 1998, the Metro Business Center in Phoenix Arizona was sold to an institutional buyer which is unaffiliated with the Partnership. The gross sale price was $9,900,000. The Partnership received net proceeds totaling $9,680,132, after closing costs and recognized a gain of $3,706,950 ($38.63 per Limited Partnership Unit). A disposition fee of $297,000 was accrued but not paid to AEW Real Estate Advisors Inc. (the "Advisor"). This fee was reversed in 2000 (see discussion below). On October 29, 1998, the Partnership made a capital distribution of $9,689,694 ($102 per Limited Partnership Unit) from the proceeds of the sale and prior sales proceeds held in reserves. On September 23, 1999, the Reflections Apartments in Fort Myers, Florida was sold to a third party which is unaffiliated with the Partnership. The gross sale price was $13,100,000. The Partnership received net proceeds totaling $12,773,052, after closing costs and recognized a gain of $3,474,005 ($36.20 per Limited Partnership Unit). A disposition fee of $393,000 was accrued but not paid to AEW. This fee was reversed in 2000 (see discussion below). On October 28, 1999, the Partnership made a capital distribution of $12,522,505 ($131.82 per Limited Partnership Unit) from the proceeds of the sale. On December 20, 1999, the Columbia Gateway Corporate Park joint venture in which the Partnership and an affiliate owned a 69.5% and 30.5% interest, respectively, sold its property to an unaffiliated third party for gross proceeds of $19,850,000, of which the Partnership's share was $13,795,750. The Partnership received its 69.5% share of the net proceeds, $13,423,827 after closing costs, and recognized a gain of $1,927,893 ($20.09 per Limited Partnership Unit) on the sale. A disposition fee of $413,872 was accrued but not paid to the Advisor. This fee was reversed in 2000 (see discussion below). On January 27, 2000 the Partnership made a capital distribution of $13,204,583 ($139.00 per Limited Partnership Unit) from the proceeds of the sale. On October 31, 2000, the Partnership sold its 50% interest in the 270 Technology Park joint venture to its joint venture partner for a gross sales price of $5,941,783. The Partnership received net proceeds of $5,202,429, after closing costs and recognized a gain of $845,348 ($8.81 per Limited Partnership Unit) on the sale. On November 28, 2000, the Partnership made a capital distribution of $4,939,844 ($52.00 per Limited Partnership Unit) from the proceeds of the sale. 6 At December 31, 2000, the Partnership had $2,224,369 in cash and cash equivalents, which is being retained pending dissolution and liquidation of the Partnership in 2001. Distributions of cash from operations related to the first quarter of 2000 were made at the annualized rate of 13% on the weighted average adjusted capital contribution of $180.77 per Limited Partnership Unit. Distributions of cash from operations related to the second quarter of 2000 were made at the annualized rate of 2% on the adjusted capital contribution of $137 per Limited Partnership Unit. Due to the sale of the last remaining asset in October, 2000, distributions from operations were suspended effective the third quarter of 2000 to enable the Partnership to meet its fund level obligations for the remainder of its life cycle. However, a special distribution from capital previously held in reserves in the amount of $7.00 per Limited Partnership Unit was made during the fourth quarter of 2000. Distributions of cash from operations for the first and second quarters of 1999 were made at the annualized rate of 5.75% on the adjusted capital contribution of $422 per Limited Partnership Unit. Distributions of cash from operations for the third and fourth quarter of 1999 were made at the annualized rate of 6.25% on the adjusted capital contribution of $422 per Limited Partnership Unit and the weighted average adjusted capital contribution of $328.87 per Limited Partnership Unit, respectively. At the time of the fourth quarter operating distribution, the Partnership also made a special distribution of working capital previously held in reserves in the amount of $14.18 per limited partnership unit. The fluctuations in distribution rates are a result of both the sales of the Partnership's real estate investments and the timing of cash flow from the Partnership's real estate investments held at the time of the distributions. Results of Operations Form of Real Estate Investments On October 31, 2000 the Partnership sold its interest in the joint venture that owned 270 Technology Center. Reflections Apartments and Metro Business Center investments were originally structured as joint ventures. However, effective April 1, 1996 and July 1, 1996, respectively, the Partnership was granted full control over management decisions and the investments had been accounted for as wholly-owned properties since those dates. As previously stated, the Metro Business Center and Reflections Apartments were sold on September 23, 1998 and September 23, 1999, respectively. The Columbia Gateway Corporate Park investment, which was sold on December 20, 1999, was structured as a joint venture. Operating Factors As mentioned above, the Columbia Gateway Corporate Park joint venture, in which the Partnership and an affiliate owned a 69.5% and 30.5% interest, respectively, sold its property on December 20,1999. The Partnership recognized its share of the gain of $1,927,893. The property was 100% leased at the time of sale, consistent with December 31, 1998. As discussed above, the Reflections Apartments investment was sold on September 23, 1999, and the Partnership recognized a gain of $3,474,005. At the time of the sale, occupancy at Reflections Apartments was 94%, consistent with occupancy at December 31, 1998. As discussed above, Metro Business Center was sold on September 23, 1998 and the Partnership recognized a gain of $3,706,950. At the time of sale, the property was 100% leased. As discussed above, the Partnership sold its 50% interest in the 270 Technology Park joint venture to its joint venture partner on October 31, 2000 and the Partnership recognized a gain of $845,348. At the time of sale, occupancy at 270 Technology Center was 100%. 7 Investment Activity 2000 Compared to 1999 Interest on cash equivalents and short-term investments decreased by approximately $103,000 or 28% compared to 1999, primarily due to lower average investment balances as a result of sales in both 2000 and 1999 and distributions during 2000 of cash previously held in reserves. Total real estate operations were $606,650 and $2,108,920 for the twelve months ended December 31, 2000 and 1999, respectively. The decrease of $1,502,270 is primarily due to the sales of Reflections Apartments, Columbia Gateway Corporate Park and 270 Technology Park in September 1999, December 1999 and October 2000, respectively. The Partnership recognized $4,334,266 in revenue during the year ended December 31, 2000: $1,535,514 is attributable to the reversal of deferred management fees and $2,798,752 is attributable to the reversal of the deferred disposition fees, both in accordance with the Partnership Agreement. 1999 Compared to 1998 Interest on cash equivalents and short-term investments decreased by approximately $34,000 or 8% compared to 1998, primarily due to lower average investment balances as a result of sales in both 1999 and 1998. Total real estate operations were $2,108,920 and $2,509,656 for the twelve months ended December 31, 1999 and 1998, respectively. The decrease of $400,736 is primarily due to a decrease in operating income from wholly owned properties of $547,746, primarily due to the sales of Metro Business Center in 1998 and Reflections Apartments in 1999. These decreases are partially offset by an increase in operating performance at Columbia Gateway Corporate Park attributable to decreases in rent concessions and the recovery of the prior year write off of bad debt. Operating performance at 270 Technology Center improved as well due to fewer rent concessions in 1999 and higher average occupancy for 1999. 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. 2000 Compared to 1999 The Partnership management fee decreased approximately $248,000 due to less operational cash available for distribution as a result of the sales of Reflections Apartments, Columbia Gateway Corporate Park and 270 Technology Park in September 1999, December 1999 and October 2000, respectively. General and administrative expenses remained stable in 2000. 1999 Compared to 1998 General and administrative expenses decreased approximately $20,000 or 6% primarily due to decreases in legal, printing and appraisal fees. Management fees decreased in 1999 compared to 1998 by approximately $23,000 due to a decrease in distributable cash flow and a corresponding decrease in operating distributions to partners as a result of the sale of investments. 8 Inflation By their nature, real estate investments tend not to be adversely affected by inflation. Inflation may tend to result in appreciation in the value of the real estate investments over time if rental rates and replacement costs increase. Declines in real property values during the period of the Partnership operations, due to market and economic conditions, have overshadowed the overall positive effect inflation may have on the value of the Partnership's investments. Item 7A. Quantitative and Qualitative Disclosures about Market Risk The Partnership was not party to derivative financial instruments or derivative commodity instruments at or during the year ended December 31, 2000. Item 8. Financial Statements and Supplementary Data. The independent auditor's reports and financial statements listed in the accompanying index are filed as part of this report. See Index to the Financial Statements on page 14. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. The Partnership has had no disagreements with its accountants on any matters of accounting principles or practices or financial statement disclosure. PART III Item 10. Directors and Executive Officers of the Registrant. (a) and (b) Identification of Directors and Executive Officers. The following table sets forth the names of the directors and executive officers of the General Partner and the age and position held by each of them as of December 31, 2000: Name Position(s) with the Managing General Partner Age - ---- --------------------------------------------- --- Alison L. Husid President, Chief Executive Officer and Director 38 Pamela J. Herbst Vice President and Director 45 J. Grant Monahon Vice President and Director 55 James J. Finnegan Vice President 40 Dana C. Spires Treasurer and Principal Financial and Accounting Officer 34 (c) Identification of Certain Significant Employees. None. (d) Family Relationships. None. (e) Business Experience. 9 The Managing General Partner was incorporated in Massachusetts on October 16, 1985. The background and experience of the executive officers and directors of the Managing General Partner are as follows: Alison L. Husid is a Portfolio Manager in the Direct Investments group of AEW Capital Management, L.P. ("AEW"), the Advisor's parent, with responsibility for several real estate equity portfolios representing approximately $700 million in client capital. She has over 15 years of experience in real estate finance and investment management. Alison joined AEW in 1987 as Controller for a portfolio management team responsible for the acquisition, management, restructuring and disposition of client assets in New England and the western U.S. She later served as Asset Manager for a portfolio of assets in Arizona and the West Coast. Prior to joining AEW, Alison worked for several years as a Senior Auditor with Peat Marwick, Main & Co. She is a Certified Public Accountant and a graduate of the University of Massachusetts (B.A.). Pamela J. Herbst is Head of AEW's Direct Investments group, with oversight responsibility for approximately $4 billion of client assets. With over 20 years of direct real estate experience, Pam is a Principal of AEW, and a member of its Management Committee, Investment Committee and Investment Policy Group. Since joining AEW's predecessor in 1982, Pam has held various senior level positions in investment management, acquisitions and corporate operations. In addition to holding a number of industry certifications, she is a member of various real estate industry trade organizations, and sits on the Board of Directors of the National Association of Real Estate Investment Managers (NAREIM). Pam is a graduate of the University of Massachusetts (B.A.) and Boston University (M.B.A.). J. Grant Monahon is AEW's Chief Operating Officer and a member of its Management Committee, Investment Committee and Investment Policy Group. He has over 25 years of experience in real estate law and investments and formerly served as AEW's General Counsel. Prior to joining AEW in 1987, Grant was a partner with a major Boston law firm. As the head of that firm's real estate finance department, he represented a wide variety of institutional clients, both domestic and international, in complex equity and debt transactions. He is the former Chairman of the General Counsel section of the National Association of Real Estate Investment Managers. Grant is a graduate of Dartmouth College (B.A.) and Georgetown University Law Center (J.D.). James J. Finnegan is AEW's General Counsel. He has over fifteen years of experience in real estate, including seven years in private practice with major New York City and Boston law firms. Jay has extensive experience in creating and implementing real estate investment and portfolio management strategies for institutional investors. Jay joined AEW in 1992 and has been actively involved in various aspects of AEW's investment activities, including public and private debt and equity investments. He also serves as AEW's securities and regulatory compliance officer, and is the Principal of AEW Securities, L.P., AEW's affiliated broker/dealer. Jay is a member of the General Counsel section of the National Association of Real Estate Investment Managers. He is a graduate of the University of Vermont (B.A.) and Fordham University School of Law (J.D.). Dana C. Spires is a Controller in AEW's Direct Investment group, with responsibility for overseeing the accounting and financial reporting for several direct investment clients. Prior to joining AEW in 2000, he worked as a Controller for both Finard & Company, LLC and Leggat McCall Retirement Properties LLC. Mr. Spires has over twelve years of financial experience in the real estate field. He is a graduate of Thiel College. (f) Involvement in Certain Legal Proceedings. None. Item 11. Executive Compensation. Under the Partnership Agreement, the General Partners and their affiliates are entitled to receive various fees, commissions, cash distributions, allocations of taxable income or loss and expense reimbursements from the Partnership. See Notes 1, 2 and 6 to Notes to Financial Statements. 10 The following table sets forth the amounts of the fees and cash distributions and reimbursements of out-of-pocket expenses which the Partnership paid to or accrued for the account of the General Partners and their affiliates for the year ended December 31, 2000.
Amount of Compensation and Receiving Entity Type of Compensation Reimbursement - ---------------- -------------------- ------------- General Partners Share of Distributable Cash $ 6,304 AEW Real Estate Advisors, Inc. Management Fees and (formerly known as Copley Real Reimbursement of Expenses 77,351 Estate Advisors, Inc.) New England Securities Corporation Servicing Fees and Reimbursement of Expenses 29,597 ------------- TOTAL $ 113,252 =============
For the year ended December 31, 2000 the Partnership allocated $(16,276) of taxable loss to the General Partners. Item 12. Security Ownership of Certain Beneficial Owners and Management. (a) Security Ownership of Certain Beneficial Owners No person or group is known by the Partnership to be the beneficial owner of more than 5% of the outstanding Units at December 31, 2000. Under the Partnership Agreement, the voting rights of the Limited Partners are limited and, in some circumstances, are subject to the prior receipt of certain opinions of counsel or judicial decisions. Except as expressly provided in the Partnership Agreement, the right to manage the business of the Partnership is vested exclusively in the Managing General Partner. (b) Security Ownership of Management. An affiliate of the General Partners of the Partnership owned 1,648 Units as of December 31, 2000. (c) Changes in Control. There exists no arrangement known to the Partnership the operation of which may at a subsequent date result in a change in control of the Partnership. Item 13. Certain Relationships and Related Transactions. The Partnership has no relationships or transactions to report other than as reported in Item 11 above. 11 PART IV Item 14. Exhibits, Financial Statements, and Reports on Form 8-K. (a) The following documents are filed as part of this report: (1) Financial Statements--The Financial Statements listed on the accompanying Index to Financial Statements and Financial Statement Index No. 2 are filed as part of this Annual Report. (2) Exhibits--The Exhibits listed in the accompanying Exhibit Index are filed as a part of this Annual Report and incorporated in this Annual Report as set forth in said Index. (b) Reports on Form 8-K. During the last quarter of the year ended December 31, 2000, the Partnership filed one Current Report on Form 8-K dated November 13, 2000, reporting on Item No. 2 (Acquisition or Disposition of Assets) and Item No. 7 (Financial Statements and Exhibits), relating to the October 31, 2000 sale of its interest in the 270 Technology Center joint venture. 12 New England Life Pension Properties IV; A Real Estate Limited Partnership Financial Statements * * * * * * * December 31, 2000 13 NEW ENGLAND LIFE PENSION PROPERTIES IV; A REAL ESTATE LIMITED PARTNERSHIP INDEX TO FINANCIAL STATEMENTS Report of Independent Accountants Financial Statements (in liquidation as of December 31, 2000): Balance Sheets - December 31, 2000 and 1999 Statements of Operations - Years ended December 31, 2000, 1999 and 1998 Statements of Partners' Capital (Deficit) - Years ended December 31, 2000, 1999 and 1998 Statements of Cash Flows - Years ended December 31, 2000, 1999 and 1998 Notes to Financial Statements All schedules are omitted because they are not applicable. 14 Report of Independent Accountants To the Partners of New England Life Pension Properties IV; A Real Estate Limited Partnership: In our opinion, the financial statements listed in the accompanying index present fairly, in all material respects, the financial position of New England Life Pension Properties IV; A Real Estate Limited Partnership (the "Partnership") at December 31, 2000 and 1999, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of Fourth Copley Corp., the Managing General Partner of the Partnership (the "Managing General Partner"); our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by the Managing General Partner, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As described in Note 1 to the financial statements, the Partnership adopted a plan of liquidation on December 31, 2000 and as a result changed its basis of accounting for periods subsequent to December 31, 2000 from the going concern basis to the liquidation basis of accounting. /s/ PriceWaterhouseCoopers LLP Boston, MA March 13, 2001 15 NEW ENGLAND LIFE PENSION PROPERTIES IV; A REAL ESTATE LIMITED PARTNERSHIP BALANCE SHEETS (in liquidation as of December 31, 2000) December 31, -------------------------- 2000 1999 ----------- ------------ Assets Real estate investments: Joint ventures $ -- $ 4,608,955 Cash and cash equivalents 2,224,369 17,597,405 Other net assets 29,209 97,603 ----------- ------------ $ 2,253,578 $ 22,303,963 =========== ============ Liabilities and Partners' Capital Accounts payable $ 128,871 $ 112,183 Accrued expenses for liquidation 264,000 -- Accrued management fee -- 24,390 Deferred management and disposition fees -- 4,436,165 ----------- ------------ Total liabilities 392,871 4,572,738 ----------- ------------ Partners' capital (deficit): Limited partners ($78.00 and $290.18 per unit, respectively; 120,000 units authorized, 94,997 units issued and outstanding) 1,821,016 17,734,394 General partners 39,691 (3,169) ----------- ------------ Total partners' capital 1,860,707 17,731,225 ----------- ------------ $ 2,253,578 $ 22,303,963 =========== ============ (See accompanying notes to financial statements) 16 NEW ENGLAND LIFE PENSION PROPERTIES IV; A REAL ESTATE LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS (in liquidation as of December 31, 2000) Year ended December 31, -------------------------------------- 2000 1999 1998 ---------- ---------- ----------- Investment Activity Property rentals $ -- $1,487,638 $ 2,907,757 Property operating expenses -- (951,623) (1,358,566) Depreciation and amortization -- (83,830) (549,260) ---------- ---------- ----------- 452,185 999,931 Joint venture earnings 608,030 1,661,176 1,515,033 Amortization (1,380) (4,441) (5,308) ---------- ---------- ----------- Total real estate operations 606,650 2,108,920 2,509,656 Gain on sale of joint venture 845,348 1,927,893 -- Gain on sales of property -- 3,474,005 3,742,541 Reversal of deferred management and disposition fees 4,334,266 -- -- ---------- ---------- ----------- Total real estate activity 5,786,264 7,510,818 6,252,197 Interest on cash equivalents and short-term investments 259,950 362,547 396,197 ---------- ---------- ----------- Total investment activity 6,046,214 7,873,365 6,648,394 ---------- ---------- ----------- Portfolio Expenses Management fee 62,351 310,709 333,771 Estimated liquidation period expenses 264,000 -- -- General and administrative 310,267 306,275 325,912 ---------- ---------- ----------- 636,618 616,984 659,683 ---------- ---------- ----------- Net Income $5,409,596 $7,256,381 $ 5,988,711 ========== ========== =========== Net income per limited partnership unit $ 56.38 $ 75.62 $ 62.41 ========== ========== =========== Cash distributions per limited partnership unit $ 223.89 $ 166.23 $ 138.76 ========== ========== =========== Number of limited partnership units outstanding during the year 94,997 94,997 94,997 ========== ========== =========== (See accompanying notes to financial statements) 17 NEW ENGLAND LIFE PENSION PROPERTIES IV; A REAL ESTATE LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS (in liquidation as of December 31, 2000)
Year ended December 31, -------------------------------------------- 2000 1999 1998 ------------ ------------ ------------ Cash flows from operating activities: Net income $ 5,409,596 $ 7,256,381 $ 5,988,711 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,380 88,271 554,568 Reversal of deferred management and disposition fees (4,334,266) -- -- Equity in joint venture earnings (608,030) (1,661,176) (1,515,033) Cash distributions from joint ventures 858,524 1,632,361 1,722,212 Gain on sales of property -- (3,474,005) (3,742,541) Gain on sale of joint ventures (845,348) (1,927,893) -- Decrease (increase) in investment income and other receivables -- -- 51,042 Increase in property deferred leasing costs -- -- (35,241) Decrease (increase) in property working capital 68,394 18,977 (256,107) Increase (decrease) in operating liabilities 154,399 (640,949) (288,128) ------------ ------------ ------------ Net cash provided by operating activities 704,649 1,291,967 2,479,483 ------------ ------------ ------------ Cash flows from investing activities: Net proceeds from sales of property -- 12,380,052 9,451,013 Net proceeds from sale of joint venture 5,202,429 13,009,955 -- Deferred disposition fees 806,872 297,000 Investment in property -- -- (70,131) Decrease (increase) in short-term investments, net -- -- 2,838,711 Loan repayment by joint venture partner -- -- 136,437 ------------ ------------ ------------ Net cash provided by investing activities 5,202,429 26,196,879 12,653,030 ------------ ------------ ------------ Cash flows from financing activity: Distributions to partners (21,280,114) (15,824,372) (13,217,055) ------------ ------------ ------------ Net cash used in financing activity (21,280,114) (15,824,372) (13,217,055) ------------ ------------ ------------ Net increase (decrease) in cash and cash equivalents (15,373,036) 11,664,474 1,915,458 Cash and cash equivalents: Beginning of year 17,597,405 5,932,931 4,017,473 ------------ ------------ ------------ End of year $ 2,224,369 $ 17,597,405 $ 5,932,931 ============ ============ ============
(See accompanying notes to financial statements) 18 NEW ENGLAND LIFE PENSION PROPERTIES IV; A REAL ESTATE LIMITED PARTNERSHIP STATEMENTS OF PARTNERS' CAPITAL (DEFICIT) (in liquidation as of December 31, 2000)
Year ended December 31, -------------------------------------------------------------------------------- 2000 1999 1998 ---------- ---------- ---------- General Limited General Limited General Limited Partners Partners Partners Partners Partners Partners -------- -------- -------- -------- -------- -------- Balance at beginning of year $ (3,169) $ 17,734,394 $(42,713) $ 26,341,929 $(67,328) $ 33,594,888 Cash distributions (11,236) (21,268,878) (33,020) (15,791,352) (35,272) (13,181,783) Net income 54,096 5,355,500 72,564 7,183,817 59,887 5,928,824 -------- ------------ -------- ------------ -------- ------------ Balance at end of year $ 39,691 $ 1,821,016 $ (3,169) $ 17,734,394 $(42,713) $ 26,341,929 ======== ============ ======== ============ ======== ============
(See accompanying notes to financial statements) 19 NEW ENGLAND LIFE PENSION PROPERTIES IV; A REAL ESTATE LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS Note 1 - Organization and Business General 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 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 liquidate in 2001. The Managing General Partner of the Partnership is Fourth Copley Corp., a wholly-owned subsidiary of AEW Real Estate Advisors, Inc. (the "Advisor"), formerly known as Copley Real Estate Advisors, Inc. ("Copley"). The associate general partner is CCOP Associates Limited Partnership, a Massachusetts limited partnership. Subject to the Managing General Partner's overall authority, the business of the Partnership is managed by the Advisor pursuant to an advisory contract. The Advisor is a wholly-owned subsidiary of AEW Capital management L.P., a wholly-owned subsidiary of Nvest Companies, L.P. (the "Company"). On October 30, 2000, Paris-based CDC IXIS Asset Management ("CDCIAM") acquired the Company and its affiliated partnership, Nvest, L.P. (the "Acquisition"). Subsequently, the Company's name was changed to CDC IXIS Asset Management North America, LP. CDCIAM is the investment management arm of France's CDC IXIS, a subsidiary of Caisse des Depots Group ("CDC"). The Acquisition was accomplished through CDCIAM's wholly owned subsidiary, CDC IXIS Asset Management US Corporation ("CDCIAM US Corp."), which has a 99% direct limited partnership interest in the Company and is the sole owner of the Company's 1% general partner, CDC IXIS Asset Management US, LLC. Prior to the Acquisition, the Company was owned by Nvest, L.P. ("Nvest"), a publicly traded limited partnership with an approximate 15 percent interest, and by private unitholders. The general partner of Nvest and the managing general partner of the Company was a wholly-owned subsidiary of Metropolitan Life Insurance Company ("MetLife"). In total, MetLife owned approximately 48% of the partnership units of the Company at October 30, 2000 (including those owned indirectly through ownership of Nvest units). Upon the consummation of the Acquisition on October 30, 2000, all unitholders received cash in exchange for each unit owned. Nvest, whose primary asset was its ownership of Nvest Companies' units, was merged with and into the Company on December 31, 2000, with the Company as the surviving entity. At December 31, 2000 and 1999, an affiliate of the Managing General Partner owned 1,648 units of limited partnership interest, which were repurchased from certain qualified plans, within specified annual limitations provided for in the Partnership Agreement. 20 Management The Advisor is entitled to receive stipulated fees from the Partnership in consideration of services performed in connection with the management of the Partnership and the acquisition and disposition of Partnership investments in real property. Partnership management fees are 9% of distributable cash flow from operations, as defined, before deducting such fees. Payment of 50% of management fees incurred is deferred until cash distributions to limited partners exceed a specified rate. Deferred management fees were $0 and $1,637,414 at December 31, 2000 and 1999, respectively. Due to the sale of the Partnership's sole remaining asset in October 2000, distributions from operations will cease, and therefore deferred management fees of $1,535,514 were reversed and recognized as other income in 2000. During 2000, the Partnership paid $164,250 of current and deferred management fees. The Advisor is also reimbursed for expenses incurred in connection with administering the Partnership ($15,000 in 2000, in 1999 and in 1998, respectively). Acquisition fees paid were based on 2% of the gross proceeds from the offering. Disposition fees are limited to the lesser of 3% of the selling price of the property, or 50% of the standard real estate commission customarily charged by an independent real estate broker. Payments of disposition fees are subject to the prior receipt by the limited partners of their capital contributions plus a stipulated return thereon. Based on the Partnership's returns to date and the sale of the Partnership's sole remaining asset in October, 2000 (as discussed in Note 3), the Managing General Partner determined that previously accrued deferred management fees of $2,798,752 would not be paid and, accordingly, reversed such fees in 2000. New England Securities Corporation, an indirect subsidiary of Met Life, was engaged by the Partnership to act as its unit holder servicing agent. Fees and out-of-pocket expenses for such services totaled $29,597, $29,089, and $37,823 in 2000, 1999 and 1998, respectively. Note 2 - Summary of Significant Accounting Policies Liquidation Basis of Accounting 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. Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the Managing General Partner to make estimates affecting the reported amounts of assets and liabilities, and of revenues and expenses. In the Partnership's business, certain estimates require an assessment of factors not within management's control, such as the ability of tenants to perform under long-term leases and the ability of the properties to sustain their occupancies in changing markets. Actual results, therefore, could differ from those estimates. Real Estate Joint Ventures Investments in joint ventures, including loans made to venture partners, which are in substance real estate investments, are stated at cost plus (minus) equity in undistributed joint venture income (losses). Allocations of joint venture income (losses) were made to the Partnership's venture partners as long as they had substantial economic equity in the project. Economic equity is measured by the excess of the appraised value of the property over the Partnership's total cash investment plus accrued preferential returns thereon. The Partnership recorded an amount equal to 100% of the operating results of each joint venture, after the elimination of all inter-entity transactions, except for the one venture jointly owned by an affiliate of the Partnership, which had substantial economic equity in the project. Joint ventures are consolidated with the accounts of the Partnership if, and when, the venture partner no longer shares in the control of the business. 21 Property Property includes land and buildings and improvements, which are stated at cost less accumulated depreciation, plus other operating net assets (liabilities). The Partnership's initial carrying value of a property previously owned by a joint venture equals the Partnership's carrying value of the predecessor investment on the conversion date. Capitalized Costs, Depreciation and Amortization Maintenance and repair costs are expensed as incurred. Significant improvements and renewals are capitalized. Depreciation is computed using the straight-line method based on estimated useful lives of the buildings and improvements. Leasing costs are also capitalized and amortized over the related lease terms. Acquisition fees have been capitalized as part of the cost of real estate investments. Amounts not related to land are being amortized using the straight-line method over the estimated useful lives of the underlying property. Certain tenant leases provide for rental increases over the respective lease terms. Rental revenue is being recognized on a straight-line basis over the lease terms. Realizability of Real Estate Investments The Partnership considers a real estate investment to be impaired when it determines the carrying value of the investment is not recoverable through expected undiscounted cash flows generated from the operations and disposal of the property. The impairment loss is based on the excess of the investment's carrying value over its estimated fair market value. For investments held for sale, the impairment loss also includes estimated costs of sale. Property held for sale is not depreciated during the holding period. Investments are considered to be held for disposition at the time management commits the Partnership to a plan to dispose of the investment. Cash Equivalents Cash equivalents are stated at cost plus accrued interest. The Partnership considers all highly liquid investments purchased with a maturity of ninety days or less to be cash equivalents; otherwise, they are classified as short-term investments. Deferred Disposition Fees Disposition fees due to the Advisor related to sales of investments are included in the determination of gains or losses resulting from such transactions. According to the terms of the advisory contract, payment of such fees has been deferred until the limited partners first receive their capital contributions, plus stipulated returns thereon. Based on the Partnership's returns to date and the sale of the Partnership's sole remaining asset, the Managing General Partner determined that previously accrued disposition fees of $2,798,752 would not be paid, and, accordingly, recognized the reversal of such fees as revenue in 2000. Income Taxes A partnership is not liable for income taxes and, therefore, no provision for income taxes is made in the financial statements of the Partnership. A proportionate share of the Partnership's income is reportable on each partner's tax return. 22 Per Unit Computations Per unit computations are based on the number of units of limited partnership interest outstanding during the year. The actual per unit amount will vary by partner depending on the date of admission to, or withdrawal from, the Partnership. Segment Data Effective January 1, 1998, the Partnership adopted Financial Accounting Standards Board Statement No. 131, "Disclosure about Segments on an Enterprise and Related Information" (FAS 131). Based on the criteria established in FAS 131, the Managing General Partner has determined that the Partnership operates in one operating segment: investing in real estate properties which are domiciled in the United States of America. Note 3 - Accrued Expenses for Liquidation Accrued expenses for liquidation as of December 31, 2000 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 year ended December 31, 2000 the Partnership accrued $264,000 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 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. Note 4 - Real Estate Joint Ventures The Partnership had invested in seven real estate joint ventures, organized as general partnerships with a real estate management/development firm, and in one case, with an affiliate of the Partnership. One joint venture sold its property in 1994; another sold its property in 1996. One joint venture investment was restructured into a wholly-owned property in 1995; and two joint venture investments were restructured into wholly-owned properties in 1996. The Partnership made capital contributions to the ventures, which are generally subject to preferential cash distributions at a specified rate and to priority distributions with respect to sale or refinancing proceeds. The Partnership also made loans to certain of its venture partners who, in turn, contributed the proceeds to the capital of the venture. The loans bear interest at a specified rate. The loans are, in substance, real estate investments and are accounted for accordingly. The joint venture agreements provide for the funding of cash flow deficits by the venture partners in proportion to their ownership interests, and for the dilution of their ownership share in the event a venture partner does not contribute proportionately. The respective real estate management/development firms are responsible for day-to-day development and operating activities, although overall authority and responsibility for the business is shared by the venturers. The real estate development/management firms or their affiliates also provide various services to the respective joint ventures for a fee. 23 The following is a summary of cash invested in joint ventures, net of returns of capital and excluding acquisition fees:
Preferential December 31, Investment/ Rate of Ownership ------------------------------------- Location Return Interest 2000 1999 -------- ------------ --------- ----------- ------------- 270 Technology Center Frederick, Maryland 10.0% 50% $ -- $ 4,857,000
Columbia Gateway Corporate Park On December 21, 1987, the Partnership entered into a joint venture with an affiliate of the Partnership and with an affiliate of the Manekin Corporation to construct and operate seven research and development/office buildings, of which six had been constructed at the time of the sale of the property. The Partnership committed to make a $14,598,000 capital contribution. The Partnership and New England Pension Properties V (the "Affiliate") collectively had a 50% interest in the joint venture. Ownership of the Columbia Gateway Corporate Park joint venture was restructured to give the Partnership and its Affiliate additional voting rights in the joint venture effective January 1, 1998; the Partnership and its Affiliate, were entitled to 69.5% and 30.5%, respectively, of the operating activity of the joint venture. On December 20, 1999, the Columbia Gateway Corporate Park joint venture investment in which the Partnership and the Affiliate owned a 68.11% and 29.89% interest, respectively, sold its property to an unaffiliated third party for gross proceeds of $19,850,000, of which the Partnership's share was $13,795,750. The Partnership received its 69.5% share of the net proceeds, $13,423,827 after closing costs, and recognized a gain of $1,927,893 ($20.09 per Limited Partnership Unit) on the sale. A disposition fee of $413,872 was accrued but not paid to the Advisor. This fee was reversed in 2000 (see Note 2). On January 27, 2000 the Partnership made a capital distribution of $13,204,583 ($139.00 per Limited Partnership Unit) from the proceeds of the sale. 270 Technology Center On December 22, 1987, the Partnership entered into a joint venture with an affiliate of the Manekin Corporation to construct and operate two research and development/office buildings. The Partnership committed to make a $5,150,000 capital contribution. The Partnership had a 50% interest in the joint venture. On October 31, 2000, the Partnership sold its 50% interest in the 270 Technology Park joint venture to its joint venture partner for a gross sales price of $5,941,783. The Partnership received net proceeds of $5,202,429, after closing costs and recognized a gain of $845,348 ($8.81 per Limited Partnership Unit) on the sale. On November 28, 2000, the Partnership made a capital distribution of $4,939,844 ($52.00 per Limited Partnership Unit) from the proceeds of the sale. Reflections On August 1, 1986, the Partnership entered into a joint venture with an affiliate of Oxford Development Corporation to construct and operate a multi-family apartment complex. The Partnership's commitment was for a total cash investment of $14,475,000, $5,790,000 of which was a loan to the venture partner. In May 1992, the Partnership agreed to extend the maturity of the loan from August, 1996 to December, 1999 and the venture partner agreed to pay interest at a minimum of 7% per annum with the unpaid amount subject to compounding at 10.5% per annum. The loan was secured by the venture partner's interest in the joint venture, as well as a guarantee from an affiliate of the venture partner. In the second quarter of 1996, the joint venture agreement was amended, pursuant to which the Partnership's venture partner became an indirect limited partner. Accordingly, this investment has been accounted for as a wholly-owned property since April 1, 1996. (See Note 5.) 24 In connection with the ownership restructuring, the Partnership agreed to release the affiliate of the venture partner from its guarantee upon payment to the Partnership of $650,000. The Partnership received $250,000 at the time the agreement was executed. During the third quarter of 1996, the Partnership received an additional $263,563. The final payment of $136,437 was received during the first quarter of 1998. The first payment was accounted for as a reduction of previously accrued investment income. The second and third payments were accounted for as a reduction of the Partnership's investment in the property. (See Note 5.) Metro Business Center On September 15, 1986, the Partnership entered into a joint venture with an affiliate of Hewson Properties, Inc. (the "Developer"), to construct and operate four multi-tenant office/warehouse buildings. The Partnership committed to make a maximum cash investment of $9,568,000, $3,988,000 of which was a loan to the venture partner. The loan was to mature in October 1996 and was secured by the venture partner's interest in the joint venture. Effective January 1, 1996, the joint venture agreement was amended to grant the Partnership full control over management decisions, beginning July 1, 1996. As full control over the operation of this investment was not transferred until July 1, 1996, the Partnership accounted for this investment as a joint venture until that date. Effective December 30, 1996, the property owned by the joint venture was distributed to the venture partners as tenants-in-common. The Partnership, however, retained its overall decision-making authority. The property interest distributed to the Developer was encumbered by the aforementioned loan. The note was amended to mature on February 1, 1997 and was secured by a recorded deed-of-trust which provided that the note would be due upon the sale of the collateral. The note was subsequently amended to mature on March 31, 1998. In connection with this transaction, the Partnership obtained the option to purchase the tenancy-in-common interest of the developer at its fair market value beginning February 1, 1997. On February 28, 1998, the Partnership executed a purchase and sale agreement to purchase the tenancy-in-common interest of the Developer. The Partnership finalized the acquisition on July 17, 1998. The purchase price was $7,113,255 and was paid by the Partnership as follows: (i) A portion of the purchase price was paid through the discharge of all outstanding amounts, including but not limited to accrued but unpaid interest, owed by the Developer to the Partnership under the loan made by the Partnership to the Developer in connection with the original acquisition of the property and (ii) the Partnership paid the remainder of the purchase price in cash in the amount of $2,210. On September 23, 1998, the Metro Business Center was sold to an institutional buyer which is unaffiliated with the Partnership. The gross sale price was $9,900,000. The Partnership received net proceeds totaling $9,680,132, after closing costs and recognized a gain of $3,706,950 ($38.63 per Limited Partnership Unit). A disposition fee of $297,000 was accrued but not paid to the Advisor. This fee was reversed in 2000 (See Note 2). On October 29, 1998, the Partnership made a capital distribution of $9,689,694 ($102 per Limited Partnership Unit) from the proceeds of the sale. 25 Summarized Financial Information The following summarized financial information is presented in the aggregate for the joint ventures: Assets and Liabilities December 31, ---------------------------- 2000 1999 ------------ ------------ Assets Real property, at cost less accumulated depreciation of $1,039,331 -- $ 3,939,825 Other -- 634,949 ------------ ------------ $ -- 4,574,774 Liabilities -- 136,869 ------------ ------------ Net assets $ -- $ 4,437,905 ============ ============ Results of Operations Year ended December 31, ----------------------------------------- 2000 1999 1998 ---------- ---------- ----------- Revenue Rental income $ 728,097 $2,959,645 $ 3,047,719 Other income 98,301 118,802 119,729 ---------- ---------- ----------- 826,398 3,078,447 3,167,448 ---------- ---------- ----------- Expenses Operating expenses 172,108 662,137 723,908 Depreciation and amortization 123,091 318,707 488,068 ---------- ---------- ----------- 295,199 980,844 1,211,976 ---------- ---------- ----------- Net income $ 531,199 $2,097,603 $ 1,955,472 ========== ========== =========== Liabilities and expenses exclude amounts owed and attributable to the Partnership and (with respect to one joint venture) its affiliate on behalf of their various financing arrangements with the joint ventures. Note 5 - Property Reflections Effective April 1, 1996, the Reflections joint venture was restructured, pursuant to which the Partnership's venture partner became an indirect limited partner. Accordingly, the investment was accounted for as a wholly-owned property since that date. The carrying value of the joint venture investment at conversion ($10,469,511) was allocated to land, building and improvements and other net operating assets. On August 21, 1998 the joint venture sold a parcel of land to the City of Fort Myers. The gross sale price was $74,731. The Partnership received net proceeds totaling $67,881 and recognized a gain of $35,591. 26 The buildings and improvements (a multi-family apartment complex in Ft. Myers, Florida) were being depreciated over 25 years, beginning April 1, 1996. On September 23, 1999, the Reflections Apartments was sold to a third party which was unaffiliated with the Partnership. The gross sale price was $13,100,000. The Partnership received net proceeds totaling $12,773,052, after closing costs, and recognized a gain of $3,474,005 ($36.20 per Limited Partnership Unit). A disposition fee of $393,000 was accrued but not paid to the Advisor. This fee was reversed in 2000 (see Note 2). On October 28, 1999, the Partnership made a capital distribution of $12,522,505 ($131.82 per Limited Partnership Unit) from the proceeds of the sale. Metro Business Center Effective July 1, 1996, the Partnership obtained control over all management decisions related to the properties owned by the Metro Business Center joint venture (and subsequently by the tenants-in common). (See Note 4.) Since that date, the investment has been accounted for as a wholly-owned property. The carrying value of the joint venture investment at conversion ($5,889,261) was allocated to land, buildings and improvements, and other net operating assets. As described above the Partnership sold the Metro Business Center on September 23, 1998 and recognized a gain of $3,706,950. The buildings and improvements (four office/warehouse buildings in Phoenix, Arizona) were being depreciated over 25 years, beginning July 1, 1996. Note 6 - Income Taxes The Partnership's income for federal income tax purposes differs from that reported in the accompanying statement of operations as follows: Year ended December 31, ---------------------------------------- 2000 1999 1998 ----------- ----------- ----------- Net income per financial statements $ 5,409,596 $ 7,256,381 $ 5,988,712 Timing differences: Joint venture earnings (237,954) 169,210 775,991 Depreciation and amortization 1,380 (53,730) 549,260 Expenses (4,436,167) (282,938) (244,327) Gain (loss) on sale 890,770 (4,722,636) (4,687,593) ----------- ----------- ----------- Taxable income $ 1,627,625 $ 2,366,287 $ 2,382,043 =========== =========== =========== Note 7 - Partners' Capital Allocation of net income (losses) from operations and distributions of distributable cash from operations, as defined, are in the ratio of 99% to the limited partners and 1% to the general partners. Cash distributions are made quarterly. Net sale proceeds and financing proceeds are allocated first to limited partners to the extent of their contributed capital plus a stipulated return thereon, as defined, second to pay disposition fees, and then 85% to the limited partners and 15% to the general partners. As a result of returns of capital from sales transactions, the adjusted capital contribution per limited partnership unit was reduced from $1,000 to $918 in 1993, to $863 in 1995, to $766 in 1996, to $524 in 1997, to $422 in 1998, to $290.18 in 1999 and to $78.00 in 2000. No capital distributions have been made to the general partners. Income from a sale is allocated in proportion to the distribution of related proceeds, provided that the general partners are allocated at least 1%. Income or losses from a sale, if there are no residual proceeds after the repayment of the related debt, will be allocated 99% to the limited partners and 1% to the general partners. 27 FINANCIAL STATEMENTS INDEX NO. 2 Auditor's Report and Financial Statements of Gateway 51 Partnership Independent Auditor's Report of Wolpoff and Company, LLP Balance Sheet - December 31, 1998 and 1997 Statement of Income - For the Years ended December 31, 1998, 1997 and 1996 Statement of Partners' Capital - For the Years ended December 31, 1998, 1997 and 1996 Statement of Cash Flows - For the Years ended December 31, 1998, 1997 and 1996 Notes to Financial Statements 28 GATEWAY 51 PARTNERSHIP (A MARYLAND GENERAL PARTNERSHIP) FINANCIAL REPORT DECEMBER 31, 1998 GATEWAY 51 PARTNERSHIP (A MARYLAND GENERAL PARTNERSHIP) CONTENTS DECEMBER 31, 1998 INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS 1 FINANCIAL STATEMENTS Balance Sheet 2-3 Statement of Income 4 Statement of Partners' Capital 5 Statement of Cash Flows 6 Notes to Financial Statements 7-10 INDEPENDENT AUDITOR'S REPORT ON SUPPLEMENTARY INFORMATION 11 SUPPLEMENTARY INFORMATION Schedule of Partners' Capital 12 Schedule of Changes in Partners' Capital - Income Tax Basis 13 [LETTERHEAD OF WOLPOFF & COMPANY, LLP] To the Partners Gateway 51 Partnership (A Maryland General Partnership) Columbia, Maryland INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS We have audited the balance sheet of Gateway 51 Partnership (A Maryland General Partnership) as of December 31, 1998 and 1997, and the related statements of income, partners' capital, and cash flows for each of the three years in the period ended December 31, 1998, 1997, and 1996. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Gateway 51 Partnership (A Maryland General Partnership) as of December 31, 1998 and 1997, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1998, 1997, and 1996, in conformity with generally accepted accounting principles. /s/ Wolpoff & Company, LLP WOLPOFF & COMPANY, LLP Baltimore, Maryland January 13, 1999 GATEWAY 51 PARTNERSHIP (A MARYLAND GENERAL PARTNERSHIP) BALANCE SHEET ASSETS December 31, -------------------------- 1998 1997 ----------- ----------- PROPERTY, AT COST - Note 1 Land $ 4,966,738 $ 4,966,738 Building and Improvements 11,892,943 11,614,717 Preliminary Development Costs 42,247 42,247 Deferred Costs - Note 3 809,323 663,719 ----------- ----------- 17,711,251 17,287,421 Less Accumulated Depreciation and Amortization 1,984,627 1,630,022 ----------- ----------- PROPERTY, NET 15,726,624 15,657,399 ----------- ----------- OTHER ASSETS Cash and Cash Equivalents - Note 1 421,833 558,136 ----------- ----------- Receivables From Tenants Rents and Expense Billings 106,282 -0- Deferred Rent Receivable - Note 1 202,228 73,447 Allowance for Doubtful Accounts (95,174) -0- ----------- ----------- 213,336 73,447 ----------- ----------- Prepaid Expenses 107,644 107,442 ----------- ----------- TOTAL OTHER ASSETS 742,813 739,025 ----------- ----------- $16,469,437 $16,396,424 =========== =========== - ---------- The notes to financial statements are an integral part of this statement. - 2 - GATEWAY 51 PARTNERSHIP (A MARYLAND GENERAL PARTNERSHIP) BALANCE SHEET LIABILITIES AND PARTNERS' CAPITAL December 31, --------------------------- 1998 1997 ----------- ----------- LIABILITIES Accounts Payable and Accrued Expenses $ 67,398 $ 34,935 Tenant Security Deposits 150,000 15,193 Prepaid Tenant Reimbursements 47,181 142,688 ----------- ----------- TOTAL LIABILITIES 264,579 192,816 PARTNERS' CAPITAL - Notes 1 and 2 16,204,858 16,203,608 ----------- ----------- $16,469,437 $16,396,424 =========== =========== - ---------- The notes to financial statements are an integral part of this statement. - 3 - GATEWAY 51 PARTNERSHIP (A MARYLAND GENERAL PARTNERSHIP) STATEMENT OF INCOME
Year Ended December 31, -------------------------------------- 1998 1997 1996 ---------- ---------- ---------- REVENUE - Notes 1 and 5 Gross Rent Potential $1,943,734 $1,775,359 $1,684,997 Less Vacancies and Free Rent 72,135 80,444 108,412 ---------- ---------- ---------- Net Rental Income 1,871,599 1,694,915 1,576,585 Expense Reimbursements From Tenants 441,093 258,789 364,873 Other Income 15,809 20 18,163 ---------- ---------- ---------- TOTAL REVENUE 2,328,501 1,953,724 1,959,621 ---------- ---------- ---------- OPERATING EXPENSES Real Property Taxes 211,009 211,967 207,855 Building and Grounds Maintenance 144,004 142,678 157,314 Bad Debts 95,174 -0- -0- Management Fees - Note 3 62,338 61,036 57,542 Utilities 26,165 27,297 24,890 General and Administrative 17,966 12,229 25,856 Insurance 4,173 6,573 9,292 ---------- ---------- ---------- TOTAL OPERATING EXPENSES 560,829 461,780 482,749 ---------- ---------- ---------- OPERATING INCOME 1,767,672 1,491,944 1,476,872 ---------- ---------- ---------- ADJUSTMENTS TO ARRIVE AT NET INCOME Depreciation and Amortization (354,605) (315,417) (302,585) Abandonment of Tenant Improvements - Note 1 -0- (80,178) (24,256) ---------- ---------- ---------- (354,605) (395,595) (326,841) ---------- ---------- ---------- NET INCOME - Note 4 $1,413,067 $1,096,349 $1,150,031 ========== ========== ==========
- ---------- The notes to financial statements are an integral part of this statement. - 4 - GATEWAY 51 PARTNERSHIP (A MARYLAND GENERAL PARTNERSHIP) STATEMENT OF PARTNERS' CAPITAL
Year Ended December 31, -------------------------------------------- 1998 1997 1996 ------------ ------------ ------------ CAPITAL CONTRIBUTIONS - Note 2 Prior Years $ 20,267,826 $ 20,267,826 $ 20,267,826 ------------ ------------ ------------ CAPITAL PLACEMENT FEE - Notes 1 and 2 Prior Years (202,678) (202,678) (202,678) ------------ ------------ ------------ DISTRIBUTIONS Prior Years (8,796,724) (8,048,893) (6,948,893) Current Year (1,411,817) (747,831) (1,100,000) ------------ ------------ ------------ (10,208,541) (8,796,724) (8,048,893) ------------ ------------ ------------ ACCUMULATED INCOME Prior Years 4,935,184 3,838,835 2,688,804 Current Year 1,413,067 1,096,349 1,150,031 ------------ ------------ ------------ 6,348,251 4,935,184 3,838,835 ------------ ------------ ------------ TOTAL PARTNERS' CAPITAL $ 16,204,858 $ 16,203,608 $ 15,855,090 ============ ============ ============
- ---------- The notes to financial statements are an integral part of this statement. - 5 - GATEWAY 51 PARTNERSHIP (A MARYLAND GENERAL PARTNERSHIP) STATEMENT OF CASH FLOWS
Year Ended December 31, ----------------------------------------- 1998 1997 1996 ----------- ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 1,413,067 $ 1,096,349 $ 1,150,031 ----------- ----------- ----------- Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities Depreciation and Amortization 354,605 315,417 302,585 Abandonment of Tenant Improvements -0- 80,178 24,256 Change in Receivables From Tenants (139,889) 8,667 (41,033) Increase in Prepaid Expenses (202) (64,870) (6,302) Change in Accounts Payable and Accrued Expenses 32,463 (6,176) 16,526 Change in Prepaid Tenant Reimbursements (95,507) 142,688 -0- ----------- ----------- ----------- Total Adjustments 151,470 475,904 296,032 ----------- ----------- ----------- Net Cash Provided by Operating Activities 1,564,537 1,572,253 1,446,063 ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Building and Improvement Costs (278,227) (359,189) (258,309) Leasing Costs (145,603) (116,524) (80,786) Increase in Tenant Security Deposits 134,807 12,784 -0- Decrease in Tenant Improvement Loans -0- 688 32,057 ----------- ----------- ----------- Net Cash Used by Investing Activities (289,023) (462,241) (307,038) ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Distributions to Partners (1,411,817) (747,831) (1,100,000) ----------- ----------- ----------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (136,303) 362,181 39,025 CASH AND CASH EQUIVALENTS, BEGINNING 558,136 195,955 156,930 ----------- ----------- ----------- CASH AND CASH EQUIVALENTS, ENDING $ 421,833 $ 558,136 $ 195,955 =========== =========== ===========
- ---------- The notes to financial statements are an integral part of this statement. - 6 - GATEWAY 51 PARTNERSHIP (A MARYLAND GENERAL PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Gateway 51 Partnership (A Maryland General Partnership) (the Partnership) was formed on December 21, 1987, under the Maryland Uniform Partnership Act. The agreement was amended and restated in 1989 to reflect changes in partner ownership percentages. The partnership agreement was amended and restated effective January 1, 1998, whereby M.O.R. Gateway 51, Limited Partnership (M.O.R.) transferred 34.055% and 14.945% to New England Life Pension Properties IV (NELPP IV) and New England Pension Properties V (NEPP V), respectively. Subsequently, NELPP IV transferred a 0.695% partnership interest, NEPP V transferred a 0.305% partnership interest, and M.O.R. transferred a 1% partnership interest to NE/Gateway 51 Limited Partnership (NE/Gateway), bringing the ownership as of January 1, 1998, to the following: NELPP IV 68.11% NEPP V 29.89% NE/Gateway 2.00% Property The Partnership owns 21 acres of land in Howard County, Maryland. The property has been developed with six office/research buildings. Plans call for a seventh building with approximately 15,000 square feet of space. All property is recorded at cost. Information regarding the buildings is as follows:
Occupancy ------------------------------ Square Date Placed Building Footage Into Service Tenants 12/31/98 12/31/97 12/31/96 -------- ------- ------------ ---------------- -------- -------- -------- A 46,840 3/1/91 Multiple 100% 92% 92% B 21,991 9/1/90 AVNET 100% 100% 100% C 38,225 7/15/91 EVI, Inc. 100% 100% 100% F 35,812 2/1/92 Multiple 100% 100% 82% D-E 45,951 8/8/94 Columbia National 100% 100% 100% ------- 188,819 100% 98% 94% =======
Carrying costs, operating expenses, and depreciation begin as a charge against operations on the date the buildings were placed into service. - 7 - GATEWAY 51 PARTNERSHIP (A MARYLAND GENERAL PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 1998 Note 1 - During 1997, tenant improvements completed in prior years were (Cont.) demolished in order to build out the space for new tenants. The loss on abandonment of tenant improvements is calculated as follows: Cost $127,688 Accumulated Depreciation (47,510) -------- Abandonment of Tenant Improvements $ 80,178 ======== Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Cash and Cash Equivalents The Partnership considers all highly liquid debt instruments purchased with a maturity of 3 months or less to be cash equivalents. The majority of the Partnership's cash is held in financial institutions with insurance provided by the Federal Deposit Insurance Corporation (FDIC) up to $100,000. Periodically during the year, the balance may have exceeded the FDIC insurance limitation. Depreciation Building costs are being depreciated using the straight-line method over the estimated useful lives of 50 years. Beginning in January 1998, the Partnership changed depreciation methods for tenant improvements. Tenant improvements are being depreciated using the straight-line method over the life of the tenants' lease; in prior years, the improvements were depreciated over 50 years. Rental Income Rental income for major leases is being recognized on a straight-line basis over the terms of the leases. The excess of the rental income recognized over the amount stipulated in the lease is shown as deferred rent receivable. Amortization Deferred costs are amortized as follows: Amortization Amount Period -------- ------------ Organization Costs $ 13,555 Complete Leasing Costs and Commissions 795,767 Lease Terms -------- $809,322 ======== - 8 - GATEWAY 51 PARTNERSHIP (A MARYLAND GENERAL PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 1998 Note 1 - Income Taxes (Cont.) Partnerships, as such, are not subject to income taxes. The partners are required to report their respective shares of partnership income and other tax items on their income tax returns (see Note 4). Capital Placement Fee Costs incurred for arranging the Partnership's equity have been treated as a reduction of partners' capital (see Note 2). Note 2 - PARTNERS' CAPITAL Capital Investment NELPP IV and NEPP V have agreed to provide equity of $14,598,000 and $6,402,000, respectively, totaling $21,000,000. As of December 31, 1998, 1997, and 1996, total capital contributions amounted to $20,267,826. Cumulative Priority Return NELPP IV and NEPP V are entitled to cumulative priority returns of 10.5%, compounded monthly on capital invested. The Partnership paid priority returns totaling $1,411,817, $747,831, and $1,100,000 during 1998, 1997, and 1996, respectively. As of December 31, 1998, 1997, and 1996, unpaid priority returns amounted to $10,855,114, $9,127,936, and $6,888,115, respectively. Capital Placement Fee The Partnership incurred fees of $202,678 with Paine Webber Mortgage Finance, Inc. with respect to capital raised by the Partnership. This amount has been charged against partners' capital. Note 3 - RELATED PARTY TRANSACTIONS Management Fees The Partnership has entered into an agreement with Manekin Corporation, a related entity, to act as management agent for the property. The management agreement provides for a management fee equal to 3% of rent and tenant expense billings. Leasing Commissions Leasing commissions in the amount of $145,603, $105,387, and $80,786 were paid to related parties during 1998, 1997, and 1996, respectively. - 9 - GATEWAY 51 PARTNERSHIP (A MARYLAND GENERAL PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 1998 Note 4 - TAX ACCOUNTING Tax accounting differs from financial accounting as follows:
Current Year Prior Years Total ------------ ----------- ---------- Financial Income $1,413,067 $4,935,184 $6,348,251 Additional Depreciation (87,820) (757,466) (845,286) Lease-Up Period Items Capitalized for GAAP -0- 4,264 4,264 Allowance for Doubtful Accounts 95,174 -0- 95,174 Deferred Rent Receivable (128,781) (73,447) (202,228) Prepaid Property Taxes (956) (105,026) (105,982) Prepaid Tenant Reimbursements (95,507) 142,688 47,181 ---------- ---------- ---------- Taxable Income $1,195,177 $4,146,197 $5,341,374 ========== ========== ==========
Note 5 - LEASES The following is a schedule of future minimum lease payments to be received under noncancelable operating leases at December 31, 1998: Year Ending December 31, 1999 $1,524,603 2000 827,454 2001 726,557 2002 736,016 2003 745,758 ---------- $3,814,630 ========== - 10 - To the Partners Gateway 51 Partnership (A Maryland General Partnership) Columbia, Maryland INDEPENDENT AUDITOR'S REPORT ON SUPPLEMENTARY INFORMATION Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information contained on pages 12 and 13 is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audits of the basic financial statements, and accordingly, we express no opinion on it. /s/ Wolpoff & Company, LLP WOLPOFF & COMPANY, LLP Baltimore, Maryland January 13, 1999 - 11 - GATEWAY 51 PARTNERSHIP (A MARYLAND GENERAL PARTNERSHIP) SCHEDULE OF PARTNERS' CAPITAL YEAR ENDED DECEMBER 31, 1998
NE/ M.O.R. 51 New England New England Gateway 51 Gateway Life Pension Pension Limited Limited Properties IV Properties V Partnership Partnership Total ------------- ------------ ------------ ------------ ------------ OWNERSHIP PERCENTAGE Through December 31, 1997 34.75% 15.25% 0.00% 50.00% 100.00% ============ ============ ============ ============ ============ As of January 1, 1998 68.11% 29.89% 2.00% 0.00% 100.00% ============ ============ ============ ============ ============ CAPITAL CONTRIBUTIONS Prior Years $ 14,086,139 $ 6,181,687 $ -0- $ -0- $ 20,267,826 ------------ ------------ ------------ ------------ ------------ CAPITAL PLACEMENT FEE Prior Years (106,427) (96,251) -0- -0- (202,678) ------------ ------------ ------------ ------------ ------------ DISTRIBUTIONS - Note 2 Prior Years (5,969,698) (2,827,026) -0- -0- (8,796,724) Current Year (981,211) (430,606) -0- -0- (1,411,817) ------------ ------------ ------------ ------------ ------------ (6,950,909) (3,257,632) -0- -0- (10,208,541) ------------ ------------ ------------ ------------ ------------ ACCUMULATED INCOME Prior Years 3,429,956 1,505,228 -0- -0- 4,935,184 Current Year 982,082 430,985 -0- -0- 1,413,067 ------------ ------------ ------------ ------------ ------------ 4,412,038 1,936,213 -0- -0- 6,348,251 ------------ ------------ ------------ ------------ ------------ PARTNERS' CAPITAL, 12/31/98 $ 11,440,841 $ 4,764,017 $ -0- $ -0- $ 16,204,858 ============ ============ ============ ============ ============
- ---------- See Independent Auditor's Report on Supplementary Information. - 12 - GATEWAY 51 PARTNERSHIP (A MARYLAND GENERAL PARTNERSHIP) SCHEDULE OF CHANGES IN PARTNERS' CAPITAL - INCOME TAX BASIS YEAR ENDED DECEMBER 31, 1998
NE/ M.O.R. 51 New England New England Gateway 51 Gateway Life Pension Pension Limited Limited Properties IV Properties V Partnership Partnership Total ------------- ------------ ------------ ------------ ------------ OWNERSHIP PERCENTAGE Through December 31, 1997 34.75% 15.25% 0.00% 50.00% 100.00% ============ ============ ============ ============ ============ As of January 1, 1998 68.11% 29.89% 2.00% 0.00% 100.00% ============ ============ ============ ============ ============ CAPITAL CONTRIBUTIONS Prior Years $ 14,086,139 $ 6,181,687 $ -0- $ -0- $ 20,267,826 ------------ ------------ ------------ ------------ ------------ CAPITAL PLACEMENT FEE Prior Years (106,427) (96,251) -0- -0- (202,678) ------------ ------------ ------------ ------------ ------------ DISTRIBUTIONS - Note 2 Prior Years (5,969,698) (2,827,026) -0- -0- (8,796,724) Current Year (981,211) (430,606) -0- -0- (1,411,817) ------------ ------------ ------------ ------------ ------------ (6,950,909) (3,257,632) -0- -0- (10,208,541) ------------ ------------ ------------ ------------ ------------ ACCUMULATED INCOME Prior Years 2,883,779 1,262,418 -0- -0- 4,146,197 Current Year 830,648 364,529 -0- -0- 1,195,177 ------------ ------------ ------------ ------------ ------------ 3,714,427 1,626,947 -0- -0- 5,341,374 ------------ ------------ ------------ ------------ ------------ PARTNERS' CAPITAL, 12/31/98 $ 10,743,230 $ 4,454,751 $ -0- $ -0- $ 15,197,981 ============ ============ ============ ============ ============
- ---------- See Independent Auditor's Report on Supplementary Information. - 13 - EXHIBIT INDEX Exhibit Page Number Number - ------ ------ 10M. Promissory Note dated September 15, 1986 in the amount * of $3,720,000 from Hewson, Inc. to the Registrant. 10U. General Partnership Agreement of MORF 6 Venture, dated * as of December 18, 1987, between M.O.R.F. 6 Associates Limited Partnership and the Partnership. 10SS. Amended and Restated Pooling Agreement dated as of * December 1, 1995 by and among the Registrant, Montgomery-Oxford Associates Limited Partnership, Waters Landing-Oxford Associates Limited Partnership and related documents dated as of December 1, 1995 and May 14, 1996. 27. Financial Data Schedule - ---------- * Previously filed and incorporated herein by reference 44 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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 Date: March 27, 2001 By: /s/ Alison L. Husid ------------------------ Alison L. Husid President of the Managing General Partner Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/ Alison L. Husid President, Chief - ---------------------------- Executive Officer and Alison L. Husid Director of the March 27, 2001 Managing General Partner /s/ Pamela J. Herbst Vice President and - ---------------------------- Director of the March 27, 2001 Pamela J. Herbst Managing General Partner /s/ J. Grant Monahon Vice President and - ---------------------------- Director of the March 27, 2001 J. Grant Monahon Managing General Partner /s/ James J. Finnegan Vice President of the March 27, 2001 - ---------------------------- Managing General Partner James J. Finnegan /s/ Dana C. Spires Treasurer and Principal - ---------------------------- Financial and Accounting Dana C. Spires Officer of the March 27, 2001 Managing General Partner 45 EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 12-MOS DEC-31-2000 DEC-31-2000 2,244,369 0 29,209 0 0 2,253,578 0 0 2,253,578 392,871 0 0 0 0 1,860,707 2,253,578 608,030 6,047,594 0 0 637,998 0 0 5,409,596 0 5,409,596 0 0 0 5,409,596 56.38 56.38
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