<PAGE>
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 0-11884
NEW ENGLAND LIFE PENSION PROPERTIES;
A REAL ESTATE LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Massachusetts 04-2774875
(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 ___
---
<PAGE>
NEW ENGLAND LIFE PENSION PROPERTIES;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED JUNE 30, 1999
PART I
FINANCIAL INFORMATION
---------------------
<PAGE>
NEW ENGLAND LIFE PENSION PROPERTIES;
A REAL ESTATE LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, 1999 December 31, 1998
(unaudited) (audited)
------------- -----------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 514,428 $ 820,108
Interest, rent and other receivables - 3,373
------------- -------------
$ 514,428 $ 823,481
============= =============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 19,513 $ 32,492
------------- -------------
Total liabilities 19,513 32,492
------------- -------------
Partners' capital (deficit):
Limited partners ($0 per
unit; 30,000 units authorized,
issued and outstanding) 416,491 1,019,890
General partner 78,424 (228,901)
------------- -------------
Total partners' capital 494,915 790,989
------------- -------------
$ 514,428 $ 823,481
============= =============
</TABLE>
(See accompanying notes to unaudited financial statements)
<PAGE>
NEW ENGLAND LIFE PENSION PROPERTIES;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended Three Months Ended Six Months Ended
June 30, 1999 June 30, 1999 June 30, 1998 June 30, 1998
------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY
Property rentals $ - $ - $ 15,394 $ 153,809
Property operating expenses - - (1,415) (68,653)
------------- -------------- -------------- -------------
Total real estate operations 13,979 85,156
Gain on sale of investment - - - 655,710
------------- -------------- ------------- -------------
Total real estate activity - - 13,979 740,866
Interest on cash equivalents
and short term investments 6,216 16,464 118,034 178,702
------------- -------------- ------------- -------------
Total investment activity 6,216 16,464 132,013 919,568
------------- -------------- ------------- -------------
Portfolio Expenses
General and administrative 13,747 33,812 18,921 43,287
------------- -------------- ------------- -------------
13,747 33,812 18,921 43,287
------------- -------------- ------------- -------------
Net Income (loss) $ (7,531) $ (17,348) $ 113,092 $ 876,281
============= ============== ============= =============
Net income (loss) per limited
partnership unit $ (0.25) $ (0.57) $ 3.73 $ 28.92
============= ============== ============= =============
Cash distributions per
limited partnership unit $ - $ - $ - $ 5.91
============= ============== ============= =============
Cash distributions per unit paid on
certain limited partnership incentive
units $ - $ 14.40 $ - $ -
============= ============== ============= =============
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Number of limited partnership
units outstanding during the
period 30,000 30,000 30,000 30,000
============= ============== ============= =============
</TABLE>
(See accompanying notes to unaudited financial statements)
<PAGE>
NEW ENGLAND LIFE PENSION PROPERTIES;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended Three Months Ended
June 30, 1999 June 30, 1999 June 30, 1998
------------------ ---------------- ------------------
General Limited General Limited General Limited
Partner Partners Partner Partners Partner Partners
--------- ---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at
beginning of
period $ (228,999) $ 731,445 $ (228,901) $ 1,019,890 $ 71,853 $ 7,605,961
Cash
distributions - - - (278,726) - -
Capital allocation
(See Note 2) 307,498 (307,498) 307,498 (307,498) - -
Net income (loss) (75) (7,456) (173) (17,175) 1,131 111,961
---------- ---------- ---------- ----------- --------- -----------
Balance at
end of period $ 78,424 $ 416,491 $ 78,424 $ 416,491 $ 72,984 $ 7,717,922
========== ========== ========== =========== ========= ===========
<CAPTION>
Six Months Ended
June 30, 1998
----------------
General Limited
Partner Partners
-------- ----------
<S> <C> <C>
Balance at
beginning of
period $ 66,012 $ 7,027,704
Cash
distributions (1,791) (177,300)
Capital allocation
(See Note 2) - -
Net income (loss) 8,763 867,518
-------- -----------
Balance at
end of period $ 72,984 $ 7,717,922
======== ===========
</TABLE>
(See accompanying notes to unaudited financial statements)
<PAGE>
NEW ENGLAND LIFE PENSION PROPERTIES;
A REAL ESTATE LIMITED PARTNERSHIP
SUMMARIZED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
----------------------------
1999 1998
---------- ----------
Net cash provided by (used in) operating
activities $ (26,954) $ 204,431
---------- ------------
Cash flows from investing activities:
Net proceeds from sale of property - 5,795,060
Deferred disposition fees - 95,625
Decrease in short-term
investments, net - 1,543,736
---------- ------------
Net cash provided by
investing activities - 7,434,421
---------- ------------
Cash flows from financing activity:
Distributions to partners (278,726) (179,091)
---------- ------------
Net increase (decrease) in
cash and cash equivalents (305,680) 7,459,761
Cash and cash equivalents:
Beginning of period 820,108 1,309,837
---------- ------------
End of period $ 514,428 $ 8,769,598
========== ============
(See accompanying notes to unaudited financial statements)
<PAGE>
NEW ENGLAND LIFE PENSION PROPERTIES;
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 for the three and six
months 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 Life Pension Properties; 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 June, 1983 and acquired six
real estate investments prior to the end of 1985. The Partnership sold its
remaining investment in March 1998 and therefore intends to liquidate and
dissolve in 1999.
NOTE 2 - CAPITAL ALLOCATION
- ----------------------------
In accordance with the Partnership Agreement, $307,498 was distributed to
the General Partner during the fourth quarter of 1998 based on the Partnership's
historical performance. Upon liquidation of the Partnership, the General Partner
is not required to refund the Partnership for any negative capital balance
related to such distribution. As the Partnership intends to liquidate and
dissolve in 1999, $307,498 was allocated from the Limited Partners' capital
balance to the General Partner's capital balance during the second quarter of
1999.
<PAGE>
NEW ENGLAND LIFE PENSION PROPERTIES;
A REAL ESTATE LIMITED PARTNERSHIP
Management's Discussion and Analysis of Financial Condition
- -----------------------------------------------------------
and Results of Operations
- -------------------------
Liquidity and Capital Resources
The Partnership completed its offering of units of limited partnership
interest in June, 1983. A total of 30,000 units were sold. The Partnership
received proceeds of $27,253,251, net of selling commissions and other offering
costs, which were invested in real estate and the payment of related acquisition
costs, or retained as working capital reserves. The Partnership made six real
estate investments, all of which have been sold: one in each of 1985, 1991,
1994, 1996, 1997 and 1998. As a result of these sales and similar transactions,
capital of $33,485,100 ($1,116.17 per limited partnership unit) has been
returned to the limited partners through June 30, 1999. Additional capital of
$586,224 has been returned to certain incentive unit holders.
At June 30, 1999, the Partnership had $514,428 in cash and cash
equivalents, which is being retained primarily as a reserve in connection with
the liquidation of the Partnership. The Partnership distributed $278,726 in the
first quarter of 1999 to certain incentive unit holders. The Partnership intends
to liquidate and dissolve in late 1999.
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.
Because the Partnership has sold all of its real property investments, the
Partnership no longer relies on joint venture partners and/or property managers
to supply financial and other data with respect to its real properties.
Consequently, the Partnership does not have any material provider of data other
than AEW Capital Management.
<PAGE>
NEW ENGLAND LIFE PENSION PROPERTIES; A REAL ESTATE
LIMITED PARTNERSHIP
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.
Because the Partnership plans to liquidate and dissolve in 1999, the
Partnership does not believe its operations will be affected by the Year 2000
Issue.
Results of Operations
Operating Factors
The Rivers Corporate Park was sold on March 4, 1998, and the Partnership
recognized a gain of $751,335. At the time of sale, this property was 29%
leased.
Investment Results
Real estate operating activity in 1998 was solely from Rivers Corporate
Park, which was sold in March 1998, as discussed above.
Interest on cash equivalents and short-term investments decreased
substantially between both the three and six month periods of 1998 and 1999 due
primarily to distributions of Corporate Rivers Park sale proceeds and operating
reserves in late 1998 and during the first quarter of 1999.
Operating cash flow decreased $231,385 between the first six months of 1998
and 1999. This decrease is primarily due to the sale of Rivers Corporate Park in
March 1998.
Portfolio Expenses
General and administrative expenses primarily consist of printing, legal,
accounting and investor servicing fees. General and administrative expenses
decreased 27% and 22% between the three and six month periods of 1998 and 1999,
respectively. These decreases are primarily due to lower overall expenses as a
result of the sale of the Partnership's remaining asset in March 1998.
<PAGE>
NEW ENGLAND LIFE PENSION PROPERTIES;
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.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NEW ENGLAND LIFE PENSION PROPERTIES;
A REAL ESTATE LIMITED PARTNERSHIP
(Registrant)
August 6, 1999 /s/ Alison Husid Cutler
-------------------------------
Alison Husid Cutler
President, Chief Executive Officer
and Director of General Partner
Copley Properties Company, Inc.
August 6, 1999
/s/ Karin J. Lagerlund
--------------------------------
Karin J. Lagerlund
Principal Financial and Accounting
Officer of General Partner,
Copley Properties Company, Inc.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 514,428
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 514,428
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 514,428
<CURRENT-LIABILITIES> 19,513
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 494,915
<TOTAL-LIABILITY-AND-EQUITY> 514,428
<SALES> 0
<TOTAL-REVENUES> 16,464
<CGS> 33,812
<TOTAL-COSTS> 33,812
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (17,348)
<INCOME-TAX> 0
<INCOME-CONTINUING> (17,348)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (17,348)
<EPS-BASIC> (0.57)
<EPS-DILUTED> (0.57)
</TABLE>
