10-Q 1 d10q.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------ FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ---------------------------------------------------------------------- For Quarter Ended March 31, 2002 Commission File Number 0-17808 NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP (Exact name of registrant as specified in its charter) Massachusetts 04-2940131 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) World Trade Center East Two Seaport Lane, 16/th/ Floor Boston, Massachusetts 02210 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 261-9000 ---------------------------------------------------------------------------- Former name, former address and former fiscal year if changed since last report Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve (12) months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED MARCH 31, 2002 PART I FINANCIAL INFORMATION --------------------- 2 NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP StatementS of Net Assets in Liquidation
March 31, 2002 December 31, 2001 (Unaudited) (Audited) -------------- ----------------- ASSETS Other assets $ 7,212 $ 10,058 Cash and cash equivalents 788,158 891,935 ------------- ------------ $ 795,370 $ 901,993 ============= ============ LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 42,609 $ 129,340 Accrued expenses for liquidation 181,635 203,425 ------------- ------------ Total liabilities 224,244 332,765 ------------- ------------ Net assets in liquidation: Limited partners ($96 per unit; 160,000 units authorized, 82,228 units issued and outstanding) 558,929 557,050 General partners 12,197 12,178 ------------- ------------ Total partners' capital 571,126 569,228 ------------- ------------ $ 795,370 $ 901,993 ============= ============
(See accompanying notes to unaudited financial statements) 3 NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP STATEMENT OF CHANGES OF NET ASSETS IN LIQUIDATION (Unaudited)
Three Months Ended March 31, 2002 ------------------ Net Assets in liquidation at beginning of period $ 569,228 ------------------ Increase during period: Operating Activities Interest Income 1,898 ------------------ Net change in net assets in liquidation 1,898 ------------------ Net assets in liquidation at end of period $ 571,126 ==================
(See accompanying notes to unaudited financial statements) 4 NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP STATEMENT OF OPERATIONS (Unaudited)
Three Months Ended March 31, 2001 ------------------ INVESTMENT ACTIVITY Property rentals $ 164,932 Interest income on loan to ground lessor 30,737 Property operating expenses (87,783) Ground rent expense (109,748) --------------- Total real estate operations (1,862) Gain on sale of property 1,632,163 Reversal of deferred disposition fees 1,956,543 --------------- Total real estate activity 3,586,844 Interest on cash equivalents 38,444 --------------- Total investment activity 3,625,288 --------------- PORTFOLIO EXPENSES Management fee 42,305 General and administrative 60,512 --------------- 102,817 --------------- Net Income $ 3,522,471 =============== Net income per limited partnership unit $ 42.41 =============== Cash distributions per limited partnership unit $ 2.41 =============== Number of limited partnership units outstanding during the period 82,228 ===============
(See accompanying notes to unaudited financial statements) 5 NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP SUMMARIZED STATEMENT OF CASH FLOWS (Unaudited)
Three Months Ended March 31, 2001 ------------------ Net cash provided by operating activities $ 75,026 ------------ Cash flows from (used in) investing activities: Net proceeds from sale of investment 8,328,714 Investment in property (10,000) Repayment received on loan to ground lessor 22,921 ------------ Net cash provided by investing activities 8,341,635 ------------ Cash flows from financing activities: Distributions to partners (200,171) ------------ Net increase in cash and cash equivalents 8,216,490 Cash and cash equivalents: Beginning of period 2,762,388 ------------ End of period $ 10,978,878 ============
(See accompanying notes to unaudited financial statements) 6 NEW ENGLAND PENSION PROPERTIES V; 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 March 31, 2002 and December 31, 2001 and the changes of net assets in liquidation and the results of its operations for the three months ended March 31, 2002 and 2001, respectively, and its cash flows for the three months ended March 31, 2001. These adjustments are of a normal recurring nature. See notes to financial statements included in the Partnership's 2001 Annual Report on Form 10-K for additional information relating to the Partnership's financial statements. NOTE 1 - ORGANIZATION AND BUSINESS ---------------------------------- New England Pension Properties V; A Real Estate Limited Partnership (the "Partnership") is a Massachusetts limited partnership organized for the purpose of investing primarily in newly constructed and existing income producing real properties. It primarily serves as an investment for qualified pension and profit sharing plans and other entities intended to be exempt from federal income tax. The Partnership commenced operations in May, 1987 and had disposed of all of its real estate investments as of December 31, 2001. The Partnership sold its last remaining asset in March 2001. On December 31, 2001, the Partnership adopted a plan of liquidation and intends to liquidate and dissolve in 2002. In connection with its adoption of a plan of liquidation on December 31, 2001, the Partnership also adopted the liquidation basis of accounting which, among other things, requires that assets and liabilities be stated at their estimated net realizable value and that estimated costs of liquidating the Partnership be provided to the extent that they are reasonably determinable. NOTE 2 - PROPERTY ----------------- On March 27, 2001, the Partnership sold the Santa Rita Plaza property for $8,850,000. The Partnership received net proceeds of $8,311,296 and recognized a gain of $1,614,745 ($19.44 per limited partnership unit). Subsequent to the sale date, the note receivable and accrued interest related to this property in the amount of $1,338,797 was paid in full to the Partnership on April 10, 2001. On April 26, 2001 the Partnership made a capital distribution of $9,373,992 ($114.00 per limited partnership unit) consisting of the sale proceeds as well as the note receivable and accrued interest. 7 NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP NOTE 3 - Accrued Expenses for liquidation ------------------------- Accrued expenses for liquidation as of March 31, 2002 include estimates of costs to be incurred in carrying out the dissolution and liquidation of the Partnership. These costs include estimates of legal fees, accounting fees, tax preparation and filing fees and other professional services. During the three months ended March 31, 2002, the Partnership incurred $21,790 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. 8 NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP Management's Discussion and Analysis of Financial Condition and Results of Operations Accounting Policies ------------------- Revenue Recognition The Partnership recognizes rental revenue on a straight-line basis over the lease terms. The Partnership accounts for its investments in joint ventures using the equity method of accounting. Under the equity method of accounting, the net equity investment of the Partnership is reflected on the balance sheets, and the Partnership's share of net income or loss from the joint ventures is included in the statements of operations. The Partnership records real estate sales at the time a sale is consummated. A sale is consummated when the parties are bound by the terms of a contract, all consideration has been exchanged, all conditions precedent to closing have been met, and title has passed from seller to buyer. Liquidation Basis of Accounting The Partnership adopted a plan of liquidation on December 31, 2001, and, as a result, 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. Accrued expenses for liquidation as of December 31, 2001 include estimates of costs to be incurred in carrying out the dissolution and liquidation of the Partnership. These costs include estimates of legal fees, accounting fees, tax preparation and filing fees and other professional services. 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, if any, are unknown and are not estimable at this time. Similarly, there can be no assurance as to the timing of a distribution of the Partnership's assets or the amount of assets that will be distributed to the Partnership's Unit holders. Liquidity and Capital Resources ------------------------------- The Partnership completed its offering of limited partnership units in December 1988. A total of 83,291 units were sold. The Partnership received proceeds of $74,895,253, net of selling commissions and other offering costs, which have been used for investment in real estate, for the payment of related acquisition costs and for working capital reserves. The Partnership made nine real estate investments, all of which have been sold: two in 1994, two in 1997, three in 1999, one in 2000 and one in 2001. As a result of the sales and other capital transactions, capital of $74,404,636 has been returned to the limited partners through March 31, 2002. The adjusted capital contribution was reduced to $952 from $1,000 per unit in 1994, to $924 in 1995, to $616 in 1997, to $367 in 1999 to $229 in 2000 and to $96 in 2001. At March 31, 2002, the Partnership had $788,158 in cash and cash equivalents, which is being retained as a reserve in connection with the liquidation of the Partnership. Distributions of cash from operations and operational cash previously held in reserves relating to the first quarter of 2001 were made at an annualized rate of 9% on the adjusted capital contribution of $229.00 per unit. At the time of the first quarter distribution, the Partnership made two capital distributions: one consisting of original working capital previously held in reserves in the amount of $1,562,332 and the other consisting of the Santa Rita Plaza sales proceeds in the amount of $9,373,992. The sale distribution also included the note receivable and accrued interest proceeds received subsequent to quarter end in the amount of $1,338,797. 9 NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP Results of Operations --------------------- Form of Real Estate Investment Santa Rita Plaza was a wholly-owned property. Santa Rita Plaza was sold on March 27, 2001. Operating Factors As mentioned above, the Santa Rita Plaza property was sold on March 27, 2001 and the Partnership recognized a gain of $1,614,745. At the time of the sale, Santa Rita Plaza was 100% occupied. Investment Results The operating results for the three month periods ended March 31, 2002 and 2001 are not comparable due to the sale of the Partnership's last remaining property in March 2001, as discussed above. 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. Management fees were not incurred during the first quarter of 2002 due to the discontinuance of operating cash distributions as a result of the sale of the Partnership's last remaining property in 2001, discussed above. General and administrative expenses consist primarily of real estate appraisal, printing, legal, accounting and investor servicing fees. General and administrative expenses for the three month period ended March 31, 2001 were $60,512. Costs to dissolve and liquidate the Partnership include legal fees, accounting fees, tax preparation fees, filing fees and other professional services. During the three months ended March 31, 2002, the Partnership incurred $21,790 of expenses. 10 NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED MARCH 31, 2002 PART II OTHER INFORMATION ------------------- Item 6. Reports on Form 8-K Reports on Form 8-K: No current reports on Form 8-K were filed during the quarter ended March 31, 2002. 11 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP (Registrant) May 10, 2002 /s/ Alison L. Husid ------------------------------- Alison L. Husid President, Chief Executive Officer and Director of Managing General Partner, Fifth Copley Corp. May 10, 2002 /s/ Jonathan Martin -------------------------------- Jonathan Martin Principal Financial and Accounting Officer of Managing General Partner, Fifth Copley Corp. 12