-----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, BzEDLqlcskcZRPvTPXSyJFuYrWxYLvgKLTWbSkp8znq9w2gmw1UVoDtOdQ1qx2T/ /Np4T+4tFBVdQO4WRUM2lg== 0000927016-99-002938.txt : 19990816 0000927016-99-002938.hdr.sgml : 19990816 ACCESSION NUMBER: 0000927016-99-002938 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW ENGLAND PENSION PROPERTIES V CENTRAL INDEX KEY: 0000806028 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 042940131 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-17808 FILM NUMBER: 99686779 BUSINESS ADDRESS: STREET 1: 225 FRANKLIN ST 25TH FL CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6175781200 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------ FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ---------------------------------------------------------------------- For Quarter Ended June 30, 1999 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) 225 Franklin Street, 25th Fl. Boston, Massachusetts 02110 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 261-9000 - ------------------------------------------------------------------------ Former name, former address and former fiscal year if changed since last report Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve (12) months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED JUNE 30, 1999 PART I FINANCIAL INFORMATION ---------------------- NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP BALANCE SHEET
June 30, 1999 December 31, 1998 (Unaudited) (Audited) -------------- ------------------ ASSETS Real estate investments: Property, net $15,598,771 $27,181,777 Joint ventures 4,856,955 4,843,933 ----------- ----------- 20,455,726 32,025,710 Property held for disposition, net 1,491,742 1,491,742 Cash and cash equivalents 18,680,758 7,220,155 ----------- ----------- $40,628,226 $40,737,607 =========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 94,931 $ 122,505 Accrued management fee 199,943 36,391 Deferred management and disposition fees 1,646,212 1,251,998 ----------- ----------- Total liabilities 1,941,086 1,410,894 ----------- ----------- Commitments to fund real estate investments Partners' capital (deficit): Limited partners ($616 per unit; 160,000 units authorized, 82,228 units issued and outstanding) 38,721,368 39,354,545 General partners (34,228) (27,832) ----------- ----------- Total partners' capital 38,687,140 39,326,713 ----------- ----------- $40,628,226 $40,737,607 =========== ===========
(See accompanying notes to unaudited financial statements) NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP STATEMENT OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended Three Months Ended Six Months Ended June 30, 1999 June 30, 1999 June 30, 1998 June 30, 1998 ------------------ ---------------- ------------------ ---------------- INVESTMENT ACTIVITY Property rentals $ 933,692 $1,944,408 $1,094,393 $2,013,800 Interest income on loan to ground lessor 33,738 67,832 35,634 71,890 Property operating expenses (231,504) (499,721) (223,951) (480,720) Ground rent expense (97,500) (195,000) (97,500) (195,000) Depreciation and amortization (197,560) (485,180) (237,868) (473,293) --------- ---------- ---------- ---------- 440,866 832,339 570,708 936,677 Joint venture earnings 118,693 218,952 113,062 199,434 --------- ---------- ---------- ---------- Total real estate operations 559,559 1,051,291 683,770 1,136,111 Gain on sale of wholly-owned property 107,705 107,705 - - --------- ---------- ---------- ---------- Total real estate activity 667,264 1,158,996 683,770 1,136,111 Interest on cash equivalents and short-term investments 84,404 188,056 133,195 268,071 --------- ---------- ---------- ---------- Total investment activity 751,668 1,347,052 816,965 1,404,182 --------- ---------- ---------- ----------
Three Months Ended Six Months Ended Three Months Ended Six Months Ended June 30, 1999 June 30, 1999 June 30, 1998 June 30, 1998 ------------------ ---------------- ------------------ ---------------- Portfolio Expenses Management fee 199,943 282,171 72,877 145,754 General and administrative 69,038 137,139 73,958 141,638 -------- -------- -------- ---------- 268,981 419,310 146,835 287,392 -------- -------- -------- ---------- Net Income $482,687 $927,742 $670,130 $1,116,790 ======== ======== ======== ========== Net income per weighted average limited partnership unit $ 5.81 $ 11.17 $ 8.06 $ 13.43 ======== ======== ======== ========== Cash distributions per limited partnership unit outstanding for the entire period $ 10.01 $ 18.87 $ 8.86 $ 20.55 ======== ======== ======== ========== Weighted average number of limited partnership units outstanding during the period 82,228 82,228 82,336 82,336 ======== ======== ======== ==========
(See accompanying notes to unaudited financial statements) NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP STATEMENT OF PARTNERS' CAPITAL (DEFICIT) (Unaudited)
Three Months Ended Six Months Ended Three Months Ended Six Months Ended June 30, 1999 June 30, 1999 June 30, 1998 June 30, 1998 ---------------------- ---------------------- ---------------------- ---------------------- General Limited General Limited General Limited General Limited Partners Partners Partners Partners Partners Partners Partners Partners -------- ----------- -------- ----------- -------- ----------- -------- ----------- Balance at beginning of period $(30,740) $39,066,609 $(27,832) $39,354,545 $(11,918) $40,991,642 $ (6,663) $41,511,957 Cash distributions (8,314) (823,102) (15,673) (1,551,642) (7,369) (729,497) (17,091) (1,692,005) Net income 4,826 477,861 9,277 918,465 6,701 663,429 11,168 1,105,622 -------- ----------- -------- ----------- -------- ---------- -------- ----------- Balance at end of period $(34,228) $38,721,368 $(34,228) $38,721,368 $(12,586) $40,925,574 $(12,586) $40,925,574 ======== =========== ======== =========== ======== =========== ======== ===========
(See accompanying notes to unaudited financial statements) NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP SUMMARIZED STATEMENT OF CASH FLOWS (Unaudited)
Six Months Ended June 30, ------------------------- 1999 1998 ----------- ----------- Net cash provided by operating activities $ 1,427,415 $ 1,630,404 ----------- ----------- Cash flows from investing activities: Deferred disposition fees 353,100 - Investment in property (5,813) (344,698) Decrease in short-term investments, net - 4,362,030 Repayment of loan to ground lessor 38,931 35,680 Net proceeds from sale of property 11,214,285 - ----------- ----------- Net cash provided by investing activities 11,600,503 4,053,012 ----------- ----------- Cash flows from financing activities: Distributions to partners (1,567,315) (1,709,096) ----------- ----------- Net cash used in financing activities (1,567,315) (1,709,096) ----------- ----------- Net increase in cash and cash equivalents 11,460,603 3,974,320 Cash and cash equivalents: Beginning of period 7,220,155 6,303,386 ----------- ----------- End of period $18,680,758 $10,277,706 =========== ===========
(See accompanying notes to unaudited financial statements) NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP NOTES TO UNAUDITED FINANCIAL STATEMENTS (Unaudited) In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly the Partnership's financial position as of June 30, 1999 and December 31, 1998 and the results of its operations, its cash flows and partners' capital (deficit) for the three and six month periods ended June 30, 1999 and 1998. These adjustments are of a normal recurring nature. See notes to financial statements included in the Partnership's 1998 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 acquired the four real estate investments it currently owns prior to the end of 1989. The Partnership intends to dispose of its investments within eight to twelve years of their acquisition, and then liquidate. The Partnership has engaged AEW Real Estate Advisors, Inc. (the "Advisor") to provide asset management services. The Partnership maintains a repurchase fund for the purpose of repurchasing limited partnership units. Two percent of cash flow, as defined, is designated for this fund which had a balance of $187,007 and $124,302 at June 30, 1999 and December 31, 1998, respectively. NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP NOTE 2 - REAL ESTATE JOINT VENTURES - ----------------------------------- The following summarized financial information is presented in the aggregate for the Partnership's remaining joint venture: Assets and Liabilities
June 30, 1999 December 31, 1998 ------------- ----------------- Assets Real property, at cost less accumulated depreciation of $1,958,577 and $1,829,627, respectively $15,987,010 $15,881,624 Other 545,412 742,813 ----------- ----------- 16,532,422 16,624,437 Liabilities 126,690 264,579 ----------- ----------- Net Assets $16,405,732 $16,359,858 =========== ===========
Results of Operations
Six Months Ended June 30, ------------------------ 1999 1998 ---------- ---------- Revenue Rental income $1,111,421 $1,028,012 ---------- ---------- 1,111,421 1,028,012 ---------- ---------- Expenses Operating expenses 264,597 245,180 Depreciation and amortization 128,950 128,950 ---------- ---------- 393,547 374,130 ---------- ---------- Net income $ 717,874 $ 653,882 ========== ==========
Liabilities and expenses exclude amounts owed and attributable to the Partnership and its affiliate on behalf of their financing arrangements with the joint venture. NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP NOTE 3 - PROPERTY - ----------------- The Puente Street investment was sold on June 25, 1999. The buyer had been employed by the Partnership as the property manager for this property at the time of the sale. The Partnership received net proceeds of $11,567,385 and recognized a gain of $107,705 ($1.30 per limited partnership unit). A disposition fee of $353,100 was accrued but not paid to the Advisor. On July 29, 1999, the Partnership made a capital distribution of $11,018,552 ($134 per limited partnership unit) from the proceeds. In addition, a portion of the proceeds was used to pay previously accrued but deferred management fees of $234,897 to the Advisor. In early November 1998, a Purchase and Sale Agreement was executed by the Partnership to sell the Waters Landing II investment. Although there can be no assurance that this sale will occur, it is expected to be concluded during the fourth quarter of 1999. This investment is classified as Property Held for Disposition on the Balance Sheet. In July 1999, a Purchase and Sale Agreement was executed by the Partnership to sell the Dahlia investment. Although there can be no assurance that this sale will occur, it is expected to be concluded during the third quarter of 1999. The following is a summary of the Partnership's investments in property (three at June 30, 1999 and four at December 31, 1998):
June 30, 1999 December 31, 1998 -------------- ------------------ Land $ 1,367,969 $ 5,953,466 Building and improvements 14,124,604 24,964,136 Accumulated depreciation (2,313,925) (3,664,791) Investment valuation allowance - (3,500,000) Loan to ground lessor 1,485,985 1,524,916 Lease commissions and other assets, net 655,950 1,576,883 Accounts receivable 385,443 551,538 Accounts payable (107,255) (224,371) Property held for disposition 1,491,742 1,491,742 ----------- ----------- $17,090,513 $28,673,519 =========== ===========
At June 30, 1999, a reclassification adjustment was made between the "Land" and "Investment valuation allowance" line items above from December 31. 1998. NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP NOTE 4 - SUBSEQUENT EVENT - ------------------------- Distributions of cash from operations relating to the quarter ended June 30, 1999 were made on July 29, 1999 in the aggregate amount of $831,416.44 ($10.01 per limited partnership unit.) In addition, a special operating distribution was made at this time from operating cash flow reserves in the amount of $1,190,230 ($14.33 per limited partnership unit). As discussed above, on July 29, 1999, the Partnership made a capital distribution of $11,018,552 ($134 per limited partnership unit) from the proceeds of the Puente Street property. The Partnership also paid previously accrued but deferred management fees to the Advisor in the amount of $234,897 from proceeds of the Puente Street property sale. NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources - ------------------------------- The Partnership completed its offering of 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, five of which have been sold: two in 1994, two in 1997 and one in 1999. As a result of the sales, capital of $31,646,076 has been returned to the limited partners through June 30, 1999. The adjusted capital contribution was reduced from $1,000 to $952 per unit in 1994, to $924 in 1995, and then to $616 in 1997. At June 30, 1999, the Partnership had $18,680,758 in cash and cash equivalents, of which $831,416 was used for operating cash distributions to partners on July 29, 1999. An operating distribution from cash previously held in reserves of $1,190,230 and a capital distribution of $11,018,552 from the sale of Puente Street were also made at this time. In addition, previously accrued management fees of $234,897 were paid to the Advisor. The remainder will be used to complete the funding of real estate investments or be retained as working capital reserves. The source of future liquidity and cash distributions to partners will be cash generated by the Partnership's invested cash and cash equivalents and real estate investments. Distributions of cash from operations relating to the first two quarters of 1999 were made at the annualized rate of 6.50% on the adjusted capital contribution of $616. Distributions of cash from operations relating to the first and second quarters of 1998 were made at the annualized rate of 5.75% on the adjusted capital contribution of $616. The distribution rate was increased due to the increase in operational cash flow from properties in 1999. The Partnership maintains a fund for the purpose of repurchasing limited partnership units pursuant to the terms and conditions set forth in the Partnership Agreement. Two percent of cash flow, as defined, is designated for this fund which had a balance of $187,007 and $124,302 at June 30, 1999 and December 31, 1998, respectively. Through June 30, 1999, the Partnership had repurchased and retired 1,063 limited partnership units for an aggregate cost of $942,188. The carrying value of real estate investments in the financial statements is at depreciated cost, or if the investment's carrying value is determined not to be recoverable through expected undiscounted future cash flows, the carrying value is reduced to estimated fair market value. The fair market value of such investments is further reduced by the estimated cost of sale for properties held for sale. Carrying value may be greater or less than current appraised value. At June 30, 1999, the appraised values of certain investments exceeded their related carrying values by an aggregate of $4,400,000. The current appraised value of real estate investments has been estimated by the managing general partner and is generally based on a combination of traditional NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP appraisal approaches performed by the Advisor and independent appraisers. Because of the subjectivity inherent in the valuation process, the estimated current appraised value may differ significantly from that which could be realized if the real estate were actually offered for sale in the marketplace. Year 2000 Readiness Disclosure - ------------------------------ The Year 2000 Issue is a result of computer programs being written using two digits rather than four to define the applicable year. Computer programs that have date-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing disruptions of operations, including, among other things, a temporary inability to process transactions or engage in normal business operations. The Partnership relies on AEW Capital Management L.P. ("AEW Capital Management"), the parent of AEW Real Estate Advisors, Inc., to generate financial information and to provide other services which are dependent on the use of computers. The Partnership has obtained assurances from AEW Capital Management that: . AEW Capital Management has developed a Year 2000 Plan (the "Plan") consisting of five phases: inventory, assessment, testing, remediation/repair and certification. . As of September 30, 1998, AEW Capital Management had completed the inventory and assessment phases of this Plan and had commenced the testing and remediation/repair of internal systems. . AEW Capital Management concluded the internal testing, remediation/repair and certifications of its Plan in June 1999. The Partnership also relies on joint venture partners and/or property managers to supply financial and other data with respect to its real properties. The Partnership is in the process of surveying these third party providers and assessing their compliance with Year 2000 requirements. To date, the Partnership is not aware of any problems that would materially impact its results of operations, liquidity or capital resources. However, the Partnership has not yet obtained written assurances that these providers would be Year 2000 compliant. The Partnership is developing a contingency plan in the event of a particular provider or system not being Year 2000 compliant. The inability of one of these providers to complete its Year 2000 resolution process could materially impact the Partnership. In addition, the Partnership is also subject to external forces that might generally affect industry and commerce, such as utility or transportation company Year 2000 compliance failures and related service interruptions. Given the nature of its operations, the Partnership will not incur any costs associated with Year 2000 compliance. All such costs are borne by AEW Capital Management and the property managers. NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP Results of Operations - --------------------- Santa Rita Plaza, Dahlia, and Waters Landing II are wholly-owned properties. Puente Street, which was sold in June 1999, was also a wholly-owned property. Columbia Gateway Corporate Park is structured as a joint venture with an affiliate of the Partnership. Operating Factors Occupancy at Columbia Gateway Corporate Park has been 100% since the first quarter of 1998. The Puente Street investment was sold on June 25, 1999 and the Partnership recognized a gain of $107,705. The property was 100% leased at the time of sale. In November 1998, a Purchase and Sale Agreement was executed by the Partnership to sell the Waters Landing II investment. Although there can be no assurance that this sale will occur, it is anticipated to be concluded during the fourth quarter of 1999. Occupancy at the Dahlia property has been 100% since the first quarter of 1994. In July 1999, a Purchase and Sale Agreement was executed by the Partnership to sell this investment. Although there can be no assurance that this sale will occur, it is anticipated to be concluded during the third quarter of 1999. Occupancy at Santa Rita Plaza during the second quarter of 1999 was 96%, down slightly from 97% at June 30, 1998. Investment Activity Interest on cash equivalents and short-term investments for the three and six months ended June 30, 1999 was $84,404 and $188,056, respectively, compared to $133,195 and $268,071 for the same periods in 1998. The decreases of approximately $48,791 and $80,015 for the respective three and six month periods are due to lower average investment balances as a result of both cash contributions to the investments throughout 1998 and the distribution of operational cash reserves made in October 1998. For the three and six month periods ended June 30, 1999, real estate operations were $559,559 and $1,051,291, respectively, compared to $683,770 and $1,136,111 for the same periods in 1998. The comparative three month decrease of $124,211 is primarily due to a non-recurring payment of approximately $153,000 received from a former tenant at Dahlia that was recorded as income in 1998. This decrease was offset by improved operating results at Puente Street due to an increase in rents as a result of the commencement of a 10-year lease in November 1998, as well as a decrease in depreciation and amortization expense as a result of sale. The comparative overall six month decrease in real estate operations of $84,820 is due to the three month decrease formerly mentioned, offset by improved rental income at Dahlia that resulted from the re-lease of space during second quarter of 1998 at a higher rate. NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP Cash flow from operations decreased by approximately $203,000 between the first six months of 1998 and 1999. This decrease is attributable to both the decrease in real estate operations discussed above and the sale of the Puente Street investment in June 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 consist primarily of real estate appraisal, printing, legal, accounting and investor servicing fees. The Partnership management fee increased between both the three and six month periods ended June 30, 1998 and 1999, due to both the increase in distributable operational cash flow and the distribution from operational cash reserves made in 1999. During the respective three and six month periods of 1998 and 1999, general and administrative expenses decreased approximately $4,900 or 7% and $4,500 or 3%. The decreases are due primarily to lower accounting fees as a result of price negotiations and lower appraisal expenses resulting from the anticipated sales of three assets in 1999. NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED JUNE 30, 1999 PART II OTHER INFORMATION ------------------- Item 6. Exhibits and Reports on Form 8-K a. Exhibits: (27) Financial Data Schedule b. Reports on Form 8-K: No current reports on Form 8-K were filed during the quarter ended June 30, 1999. 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) August 13, 1999 /s/ Alison Husid Cutler ------------------------------- Alison Husid Cutler President, Chief Executive Officer and Director of Managing General Partner Fifth Copley Corp. August 13, 1999 /s/ Karin J. Lagerlund -------------------------------- Karin J. Lagerlund Principal Financial and Accounting Officer of Managing General Partner, Fifth Copley Corp. EX-27 2 FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-1999 JUN-30-1999 18,680,758 0 0 0 0 18,680,758 21,947,468 0 40,628,226 294,874 1,646,212 0 0 0 38,687,140 40,628,226 2,231,192 2,526,953 694,721 694,721 904,490 0 0 927,742 0 927,742 0 0 0 927,742 11.17 11.17
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