<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended October 31, 1997
--------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR (15d) OF THE SECURITIES
EXCHANGE ACT OF 1934
<TABLE>
<CAPTION>
For the transition period from None to None
---------------------------- -----------------
Commission file number 0-13219
----------------------
BOETTCHER PENSION INVESTORS LTD.
(Exact name of registrant as specified in its charter)
- --------------------------------------------------------------------------------
<S> <C>
COLORADO 84-0948497
- ----------------------------------------------------------------- ------------------------------------
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
77 West Wacker Drive, Chicago, 60601
- ----------------------------------------------------------------- ------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 574-6000
---------------------------------------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered on
------------------- ------------------------------------------
None None
- ------------------------------------------- ------------------------------------------
</TABLE>
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.
[X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K 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. [ ]
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the common equity was sold, or the
average bid and ask prices of such common equity, as of a specified date within
60 days prior to the date of filing. (See definition of Affiliate in Rule 405,
17 C.F.R. 230.405.)
<PAGE>
INDEX
<TABLE>
<CAPTION>
PART 1 Page #'s
------ --------
<S> <C> <C>
Item 1. Business 3
Item 2. Properties 6
Item 3. Legal Proceedings 7
Item 4. Submission of Matters to a Vote of Holders of Limited Partnership Interests 7
PART II
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Item 5. Market for the Registrant's Limited Partnership Interests and Related
Limited Partner Matters 8
Item 6. Selected Financial Data 9
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations 9
Item 8. Financial Statements and Supplementary Data 16
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure 30
PART III
--------
Item 10. Directors and Executive Officers of the Registrant 30
Item 11. Executive Compensation 32
Item 12. Security Ownership of Certain Beneficial Owners and Management 32
Item 13. Certain Relationships and Related Transactions 33
PART IV
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Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 34
SIGNATURES 40
</TABLE>
2
<PAGE>
Forward Looking Statements
The following discussion should be read in conjunction with the Partnership's
financial statements and notes thereto contained in Item 8 of this report. In
addition to historical information, this report contains forward-looking
statements. Such forward looking statements are within the meaning of that term
in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such statements may include, but
are not limited to, projections of revenues, income or loss, capital
expenditures, plans for future operations, financing needs or plans, and plans
relating to the sale of assets of the Partnership, as well as assumptions
relating to the foregoing.
Forward looking statements are inherently subject to risks and uncertainties,
some of which cannot be predicted or quantified. Future events and actual
results could differ materially from those set forth in, contemplated by, or
underlying the forward looking statements. Statements in this report, including
the notes to the consolidated financial statements, "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business",
describe factors, among others, that could contribute to or cause such
differences. Additional factors that could cause actual results to differ
materially from those expressed in such forward looking statements include those
discussed below.
PART I
Item 1. BUSINESS
General
Boettcher Pension Investors Ltd. (the "Partnership") was organized in May 1984
as a limited partnership under the Colorado Uniform Limited Partnership Act. The
Partnership's primary business has been to invest in improved and unimproved
real property on an unleveraged basis and to purchase or originate participating
mortgage loans and land lease investments. At October 31, 1997, the Partnership
owned and operated one shopping center located in Provo, Utah known as Parkway
Village Shopping Center (the "Remaining Property" or "Parkway"), which the
Partnership classified as held for sale as discussed in Notes 2 and 8 to the
Financial Statements contained in Item 8 of this report. The Remaining Property
is more fully described in Item 2 of this report.
The Partnership entered into a purchase and sale agreement, as amended or
supplemented from time to time, effective July 14, 1997 (the "Purchase and Sale
Agreement") for the sale of the Remaining Property. The sale of the Remaining
Property closed on January 28, 1998 which resulted in the Partnership receiving
gross proceeds of $8,500,000. The Partnership is currently in the process of
liquidating and dissolving (i.e. "winding up" its business and affairs). The
discussion of Business in Item 1 of this report is qualified in its entirety by
the occurrence of the sale and the Partnership's winding up process.
The General Partners of the Partnership are Boettcher Affiliated Investors L.P.
and Boettcher 1984 Associates, Ltd. (the "General Partners"), both Colorado
limited partnerships. The Managing General Partner of the Partnership is
Boettcher Affiliated Investors L.P. ("BAILP" or the "Managing General Partner")
and the Associate General Partner of the Partnership is
3
<PAGE>
Boettcher 1984 Associates, Ltd. (the "Associate General Partner"). The general
partner of both the Managing General Partner and the Associate General Partner
is Boettcher Properties, Ltd. ("BPL"). The General Partners have exclusive
control over the business of the Partnership, which powers are exercised only by
the Managing General Partner, except for certain matters which require the
affirmative vote or consent of the Limited Partners as set forth in Sections
IV.2 and V. of the Limited Partnership Agreement of the Partnership. Such voting
or consent rights of Limited Partners include, without limitation, the right to
vote or otherwise consent to a sale of substantially all of the assets of the
Partnership, dissolution of the Partnership, transactions between the
Partnership and the General Partner or its Affiliates, amendment to the Limited
Partnership Agreement, removal of a General Partner, and other specific matters
as set forth therein.
As of October 31, 1997, the Partnership did not directly employ any individuals;
it is, however, a party to a Management Agreement with the Managing General
Partner. Under the terms of the Management Agreement, the Managing General
Partner is responsible for the day-to-day operations of the Partnership and
operating and managing its investments. All regular employees rendering service
on behalf of the Partnership are employees of BPL or its affiliates. The real
estate assets are owned directly by the Partnership and are managed by
independent, third-party property managers who perform daily property management
services.
For the fiscal year ended October 31, 1997, gross rents generated by the
Partnership's real estate investment, including reimbursements by tenants of
property operating expenses, represented 97% of total Partnership revenue.
Monthly rental income is derived from tenant leases at the Remaining Property.
Lease terms vary from one year to five years for most tenants, and to twenty-
five years for major anchor tenants. The majority of these commercial leases
permit the pass through by the Partnership of taxes, insurance and common area
operating costs to the tenants.
Competition
The Partnership faces active competition in all aspects of its business. In its
operating stage, the Partnership competes with entities which own properties
similar in type to that owned by the Partnership. The ability of the Partnership
to compete with these entities depends on many factors, including the location,
size, condition of its facilities and the availability of similar facilities.
When comparable space is available in a general location, the Partnership
competes through rental rates and lease terms, among other variables. While
marketing the Remaining Property for sale, the Partnership competed with other
income-producing properties for prospective purchasers. While no statistical
information is currently available to delineate the Partnership's competitive
position, many of its competitors are believed to have assets and revenues
greater than those of the Partnership.
Cash Reserves
The Partnership is required under its Partnership Agreement to maintain cash
reserves of not less than 2% of aggregate capital contributions from limited
partners for normal repairs, replacements,
4
<PAGE>
working capital and other contingencies. As of October 31, 1997, the Partnership
had cash reserves of $1,010,289, while the required minimum amount was $214,340.
On February 12, 1998, subsequent to the closing of the sale of the Remaining
Property, the Partnership made an initial distribution of $275 per limited
partnership unit ("Unit") out of the Partnership's available cash. The
Partnership retained approximately $380,000 to establish reserves for the
payment of the Partnership's remaining debts and liabilities, to cover
contingent liabilities resulting from the Partnership's previous ownership of
the Remaining Property, and to cover the costs and expenses associated with the
Partnership's liquidation and dissolution. The Partnership may make one or more
interim distributions during its winding up process as contingent liabilities
lapse and the time of the liquidation and dissolution becomes more certain. Upon
liquidation and dissolution the Partnership will make a final distribution of
its remaining cash, constituting the remaining asset of the Partnership, to the
limited partners. For additional information on the Partnership's liquidity and
winding up process refer to the Liquidity and Capital Resources section of
Management's Discussion and Analysis of Financial Condition and Results of
Operations in Item 7 of this report.
Sale of Parkway Village Shopping Center
The Partnership attempted to sell the Remaining Property in the fiscal year
ended October 31, 1997. The existence of environmental contamination limited the
potential buyers of the Remaining Property to entrepreneurial investors. Despite
the limited marketability of the Remaining Property, the Partnership entered
into the Purchase and Sale Agreement, which became effective on July 14, 1997,
for the sale of the Remaining Property for a sale price of $8,500,000. Certain
contingencies delayed the expected sale closing date into the early part of
1998. On January 28, 1998 the Partnership closed on the sale of the Remaining
Property and repaid the mortgage secured by the Remaining Property and certain
other customary closing expenses. For more information regarding the sale of the
Remaining Property and the Partnership's winding up process see the Liquidity
and Capital Resources section of Management's Discussion and Analysis of
Financial Condition and Results of Operations in Item 7 of this report.
Other Factors
Seasonal weather conditions do not have a material impact on the operations of
the Remaining Property, although the usage of water, gas and electricity and the
attendant expense, to the extent not paid by the tenants, may vary according to
the particular season.
With the exception of the environmental assessment undertaken at Parkway,
federal, state and local laws and regulations, which have been enacted or
adopted regulating the discharge of materials into the environment or otherwise
relating to the protection of the environment, do not presently have a material
effect on the operations of the Remaining Property nor on the capital
expenditures, earnings or competitive position of the Partnership and no
material effect is anticipated in the future.
Other federal, state and local laws and regulations, including requirements of
the Americans with Disabilities Act, may require that the Partnership incur
capital expenditures to ensure compliance.
5
<PAGE>
At this time, it is not anticipated that these capital expenditures will
materially affect the Partnership's cash flows.
The business of the Partnership to date has involved only one industry segment;
accordingly, all information required by Item 101(b) of Regulation S-K is
included in the Financial Statements as contained in Item 8 of this report. The
Partnership has no foreign operations.
Item 2. PROPERTIES
Pursuant to the Purchase and Sale Agreement the Partnership sold the Remaining
Property. The discussion of Properties in Item 2 of this report is qualified in
its entirety by the occurrence of this sale and the Partnership's winding up
process.
At October 31, 1997, the Partnership owned and operated one shopping center as
more fully described below:
<TABLE>
<CAPTION>
Name and Location General Character of Property
- ----------------- -----------------------------
<S> <C>
Parkway Village Shopping Center 4-building shopping center containing
2255 N. University Parkway approximately 102,000 square feet of
Provo, Utah net rentable area on approximately 10.05 acres of land.
</TABLE>
As of October 31, 1997 the Partnership continues to classify the Remaining
Property as real estate held for sale.
For information regarding the indebtedness to which the Remaining Property is
subject, see Note 3 to the Financial Statements contained in Item 8 of this
report.
For information regarding the sale of the Remaining Property, see Management's
Discussion and analysis of Financial condition and Results of Operations on Item
7 of this report.
Average weighted occupancies and weighted average effective rental rates
generated by the Partnership's real estate investment in the five fiscal years
ended October 31, 1997 were as follows:
<TABLE>
<CAPTION>
1st 2nd 3rd 4th
Qtr Qtr Qtr Qtr Fiscal Fiscal Fiscal Fiscal Fiscal
Shopping Center 1997 1997 1997 1997 1997 1996 1995 1994 1993
- ----------------------- ------ ----- ----- ------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Parkway Village
Average occupancy(b) 99% 99% 98% 98% 98% 97% 98% 100% 99%
Average effective
rental rate per
square foot (a) (b) $9.37 9.47 9.53 10.02 9.60 9.52 9.13 8.95 8.37
</TABLE>
(a) Average effective rental rates are stated in terms of an average annual
rate per square foot. Effective rates take into account the effect of
leasing concessions and bad debts. These rates are "triple net". In
addition to this base rent, the majority of tenants pay their pro rata
share of taxes, insurance and common area maintenance expenses at the
property.
6
<PAGE>
(b) Average occupancies and average effective rental rates are reported only
for the Partnership's period of ownership, which began on May 5, 1993.
Parkway has one tenant occupying 10% or more of the total rentable square
footage. Albertson's Food Market is a party to a 25 year lease expiring February
28, 2008 at the property and is a provider of full service grocery products. The
rent per annum is approximately $265,600. Albertson's has the option of renewing
the lease for nine consecutive 5-year lease terms.
The following table sets forth, by property, a schedule of lease expirations for
the next ten years, including: (a) the number of tenants whose leases will
expire, (b) the total area in square feet covered by such leases, (c) the annual
rental represented by such leases, and (d) the percentage of gross annual rental
represented by such leases.
<TABLE>
<CAPTION>
As of October 31, 1997:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Parkway Village Shopping Center
- -------------------------------
Lease Expiration Dates
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
------- -------- ------- ------- ------- ------- ----- ----- ----- --------
No. of tenants 5 8 6 1 1 1 0 0 0 1
Total square footage 15,159 13,400 10,440 6,000 1,575 1,752 0 0 0 7,200
Annual rent $39,707 $159,438 $99,955 $99,375 $18,900 $16,644 $ 0 $ 0 $ 0 $136,800
% of gross annual rent 4.7% 19.1% 12.0% 11.9% 2.3% 2.0% 0.0% 0.0% 0.0% 16.4%
</TABLE>
Item 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Partnership is a
party or of which the Remaining Property is subject.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF HOLDERS OF LIMITED
PARTNERSHIP INTERESTS
There have been no matters submitted to a vote of holders of Limited Partnership
Interests (the "Units") during the fiscal year which is covered by this report.
However, on November 13, 1997, in connection with a proxy solicitation, a
special meeting of the limited partners was held for the purpose of obtaining
approval of the sale of the Remaining Property and the subsequent liquidation
and dissolution of the Partnership. The Partnership Agreement required a simple
majority (5,466) of Units for approval of the sale and subsequent liquidation
and dissolution of the Partnership. 5,993 Units voted in favor of the sale of
the Remaining Property and the subsequent liquidation and dissolution of the
Partnership resulting in approval of the proposal.
7
<PAGE>
PART II
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Item 5. MARKET FOR THE REGISTRANT'S LIMITED PARTNERSHIP INTERESTS AND
RELATED LIMITED PARTNER MATTERS
At October 31, 1997, 10,717 Units were outstanding and held by approximately 850
limited partners. The Partnership is not aware of any group or group of persons
who beneficially owns more than 5% of the outstanding Units.
The Units have limited transferability. There is no public market for the Units
and it is not expected that any will develop. There are significant restrictions
relating to the transferability of Units, including the requirement that the
Managing General Partner consent to any transfer and to any transferee becoming
a substituted limited partner, which consent may be granted or withheld at the
sole discretion of the Managing General Partner. In addition, restrictions on
transfers may be imposed by federal and state securities laws.
The Partnership Agreement provides that after January 1, 1987, under certain
circumstances, the General Partners may repurchase the Units held by limited
partners desiring to sell their Units. At October 31, 1997, the General Partners
had not established the Repurchase Fund as provided for in the Partnership
Agreement as they had not received any distribution of cash flow from
Partnership operations since the inception of the Partnership.
Net earnings for the fiscal year ended October 31, 1997 were less than the 9%
Current Distribution Preference of the limited partners as provided in the
Partnership Agreement and, accordingly, were allocated solely to the limited
partners.
Until fiscal 1996, the Partnership made consecutive quarterly cash distributions
to limited partners from cash flow generated by Partnership operations. In
fiscal 1996, the Partnership distributed a total of $760,907 ($71 per $1,000
Unit) to limited partners as generated by the sale of Lindsay Main Plaza. At the
discretion of the Managing General Partner, no other distributions were made
from cash flow generated by Partnership operations in fiscal 1996 in order to
build additional cash reserves related to the environmental contamination at
Parkway. For additional information regarding the environmental contamination
see Note 7 to the Financial Statements in Item 8 and Management's Discussion and
Analysis of Financial Condition and Operating results in Item 7 of this report.
The following table sets forth a summary of distributions made to limited
partners for the three years ended October 31, 1997 on an aggregate and per unit
basis:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1997 1996 1995
----- ---- ----
Per Per Per
Distributions Total Unit Total Unit Total Unit
- ------------- ----- ---- --------- ------ --------- -------
From operations $ - - $ 14,864 $ 1.39 $ 269,287 $ 25.13
Return of Capital - - 746,043 69.61 2,431,394 226.87
----- ---- -------- ------ ---------- -------
Total $ - - $760,907 $71.00 $2,700,681 $252.00
===== ==== ======== ====== ========== =======
</TABLE>
The Partnership made a distribution of $275 per Unit on February 12, 1998 out of
the Partnership's available cash. The Partnership may make one or more
additional distributions
8
<PAGE>
during its winding up process as contingent liabilities lapse and the time of
the liquidation and dissolution becomes more certain. Upon liquidation and
dissolution, the Partnership will make a final distribution of its remaining
cash, constituting the remaining asset of the Partnership to the limited
partners. For additional information on the Partnership's liquidity and winding
up process refer to the Liquidity and Capital Resources section of Management's
Discussion and Analysis of Financial Condition and Results of Operations in Item
7 of this report.
Item 6. SELECTED FINANCIAL DATA
BOETTCHER PENSION INVESTORS LTD.
Selected Financial Data(a)
As of or for the years ended October 31,
----------------------------------------
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
---------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Total revenue $1,171,408 $1,192,846 $1,519,252 $1,581,014 $ 954,808
========== ========== ========== ========== ==========
Earnings from operations $ 342,317 $ 14,864 $ 269,287 $ 307,261 $ 145,249
Gain (loss) on sale of
real estate investment - (20,402) 684,856 - -
---------- ---------- ---------- ---------- ----------
Net earnings(loss) $ 342,317 $ (5,538) $ 954,143 $ 307,261 $ 145,249
========== ========== ========== ========== ==========
Per Unit(b)
Net earnings(loss) $ 31.94 $ (.52) $ 89.03 $ 28.67 $ 13.55
Cash distributions $ - $ 71.00 $ 252.00 $ 47.50 $ 10.00
Total assets $7,116,123 $6,749,551 $7,704,500 $9,475,573 $9,789,517
Mortgage payable $5,677,453 $5,755,906 $5,840,260 $5,910,814 $5,975,906
</TABLE>
(a) The selected financial data should be read in conjunction with the Financial
Statements and related Notes as contained in Item 8 of this report.
(b) Per Unit data is based upon 10,717 weighted average Units outstanding during
each fiscal year.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Partnership, pursuant to the Purchase and Sale Agreement, closed the sale of
the Remaining Property on January 28, 1998 and the Partnership is currently in
the process of liquidating and dissolving (i.e. "winding up" its business and
affairs). Management's Discussion and Analysis of Financial Condition and
Results of Operations is qualified in its entirety by the occurrence of the sale
and the Partnership's winding up process.
Results of Operations
October 31, 1997 marked the close of the Partnership's fourteenth year of
operations. During the fiscal year ended October 31, 1997, the Partnership owned
and operated one shopping center, located in Provo, Utah known as Parkway
Village Shopping Center ("Parkway" or the "Remaining Property") which the
Partnership classified as held for sale as of October 31, 1997.
9
<PAGE>
1997 as Compared to 1996:
For the fiscal year ended October 31, 1997, the Partnership generated total
revenue of $1,171,408, and incurred total expenses of $829,091, resulting in
earnings from operations of $342,317. The Partnership's fiscal 1997 operating
earnings increased $327,453 when compared with fiscal 1996. The increase in
income from operations is due primarily to the adoption of Statement of
Financial Accounting Standards No. 121. ("SFAS 121") in fiscal 1997. SFAS 121
addresses the accounting for long-lived assets that are expected to be disposed
of, and has accordingly eliminated depreciation and amortization related to the
Partnership's long-lived assets held for sale. For the year ended October 31,
1997 no depreciation or amortization related to the Partnership's real estate
held for sale was recorded. In fiscal 1996, the depreciation and amortization
related to this asset amounted to approximately $182,000. Due to the sale of its
real estate investment, Lindsay-Main Plaza ("Lindsay"), in the third quarter of
fiscal 1996, as more fully discussed in Note 2 to the Financial Statements
contained in Item 8 of this report, which resulted in a loss of $20,402, the
Partnership recorded a net loss of $5,538 for the year ended October 31, 1996.
There were no sales of real estate investments during the fiscal year ended
October 31, 1997. Total revenue decreased, primarily rental and other income,
and total expenses decreased in most categories, primarily due to the sale of
Lindsay. A summary of the Partnership's operations and period-to-period
comparisons is presented below.
<TABLE>
<CAPTION>
October 31
(in thousands) Amount %
1997 1996 of Change Change
------ ------ ---------- --------
<S> <C> <C> <C> <C>
Total revenue $1,171 1,193 (22) (2%)
Total expenses 829 1,178 (349) (30%)
------ ------ -----
Operating earnings (loss) $ 342 15 327
====== ====== =====
</TABLE>
When making period-to-period comparisons, the exclusion of Lindsay's operations
from the prior fiscal year's results allows for a more meaningful analysis of
the operations of the Partnership's remaining investment. For comparison
purposes only, Lindsay's results of operations have been excluded in fiscal 1996
in the table below.
<TABLE>
<CAPTION>
October 31
(In Thousands)
--------------
Pro Amount
Forma of %
1997 1996 Change Change
------ ----- ------- --------
<S> <C> <C> <C> <C>
Total revenue $1,171 1,126 45 4%
Total expenses 829 1,123 (294) (26%)
------ ----- ----
Operating earnings (loss) $ 342 3 339
====== ===== ====
</TABLE>
Based upon the proforma amounts presented above, total revenue generated by the
Partnership amounted to $1,171,408, representing an increase of $44,911 (4%)
when compared with fiscal 1996. The Partnership's Remaining Property generated
rental income of $967,204 in fiscal 1997,
10
<PAGE>
which represents an increase of $30,955 (3%) when compared with the proforma
amounts of fiscal 1996. Parkway achieved an average occupancy of 98% and an
average effective rental rate per square foot of $9.60, representing an increase
of 1% and an increase of $.08, respectively, when compared with fiscal 1996. For
additional information on the historical average occupancies and average
effective rental rates of the Partnership's Remaining Property, refer to the
table provided in Item 2 of this report. Tenant reimbursements and other income
generated by Parkway increased $7,962 (5%) in fiscal 1997 when compared with
fiscal 1996 due to increased tenant billings in the current fiscal year.
Interest income increased $5,994 (19%) in fiscal 1997 when compared with fiscal
1996 primarily due to the maintenance of larger cash reserve balances in the
current fiscal year.
Based on the proforma amounts presented above, total expenses incurred by the
Partnership amounted to $829,091 in fiscal 1997, representing a decrease of
$294,381 (26%) when compared with the proforma amounts of fiscal 1996. Excluding
the impact of the adoption of SFAS 121, expenses related to the operations of
the Partnership's remaining real estate investment remained relatively constant
in the fiscal 1997 when compared to fiscal 1996. A decrease in property tax
expense of $9,650 (14%) to $61,711 for fiscal 1997 from $71,360 in the
corresponding period of fiscal 1996 is due to the reassessment of commercial
property taxes throughout the state of Utah. This decrease is offset by an
increase in repair and maintenance expense of $8,223 (13%) to $69,540 for fiscal
1997 compared to $61,317 for the corresponding period in fiscal 1996. Heavier
snowfall in the current year and roof repairs completed in the first quarter of
fiscal 1997 are the primary reasons for the increase. General and administrative
expense decreased $44,510 (38%) to $74,020 for the fiscal year 1997 from
$118,530 for the comparable period in fiscal 1996. This is the result of the
write-off of certain former tenants' receivables in fiscal 1996 and the payment
of certain expenses related to the sale of one of the Partnership's former real
estate investments in the first quarter of fiscal 1996. See further discussion
under "1996 as compared to 1995" below.
1996 as Compared to 1995:
For the fiscal year ended October 31,1996, the Partnership generated total
revenue of $1,192,846, and incurred total expenses of $1,177,982, resulting in
earnings from operations of $14,864. The Partnership's fiscal 1996 operating
earnings decreased $254,423 (94%) when compared with fiscal 1995. A loss on the
sale of its real estate investment in Lindsay in the amount $20,402, was
recorded in the third quarter of fiscal 1996 as more fully discussed in Note 2
to the Financial Statements contained in Item 8 of this report. Due to the loss
on sale of real estate investments, the Partnership reported a net loss of
$5,538. Total revenue decreased, primarily rental and other income, and total
expenses decreased in most categories, primarily due to the sale of Lindsay. A
summary of the Partnership's operations and period-to-period comparisons is
presented below.
When making period-to-period comparisons, the exclusion of Lindsay's operations
from the current and prior fiscal year's results allows for a more meaningful
analysis of the operations of the Partnership's remaining investment. For
comparison purposes only, Lindsay's results of operations have been excluded in
both fiscal 1996 and 1995 and the operations of Clackamas Corner Shopping Center
("Clackamas"), which was sold in fiscal 1995, also more fully discussed in Note
2 to Financial Statements contained in Item 8 of this report have been excluded
from fiscal 1995 in the table below.
11
<PAGE>
<TABLE>
<CAPTION>
October 31
(In Thousands)
--------------
Pro Pro Amount
Forma Forma of %
1996 1995 Change Change
------ ----- ------- -------
<S> <C> <C> <C> <C>
Total revenue $1,126 1,083 43 4%
Total expenses 1,123 1,004 119 12%
------ ----- ---
Operating earnings (loss) $ 3 79 (76)
====== ===== ===
</TABLE>
Based upon the proforma amounts presented above, total revenue generated by the
Partnership, excluding Lindsay, amounted to $1,126,497 in fiscal 1996,
representing an increase of $43,521 (4%) compared with fiscal 1995. The
Partnership's remaining property generated rental income of $936,249 in fiscal
1996, which represents an increase of $25,250 (3%) when compared with fiscal
1995. Parkway achieved an average occupancy of 97% and an average effective
rental rate per square foot of $9.52, representing a decrease of 1% and an
increase of $.39, respectively, when compared with fiscal 1995. For additional
information on the average occupancies and average effective rental rates for
the Partnership's real estate investments, refer to the table provided in Item 2
of this report. Tenant reimbursement income generated by Parkway increased
$6,271 (4%) in fiscal 1996 when compared with fiscal 1995 due to increased
tenant billings in the current fiscal year. Other income increased $12,000 (64%)
in fiscal 1996 when compared with fiscal 1995 primarily as a result of increased
interest earned by the Partnership due to the maintenance of larger cash reserve
balances.
Based upon the proforma amounts provided above, total expenses, excluding
Lindsay, incurred by the Partnership amounted to $1,123,471 in fiscal 1996, an
increase of $119,622 (12%) when compared with fiscal 1995. Several factors
significantly impacted the Partnership's results of operations in fiscal 1996
that the Managing General Partner deems non-recurring in nature. First, the
payment of approximately $26,500 of expenses related to the completion of the
sale of Clackamas in the second quarter of fiscal 1996. Specifically, the sale
of the property included the Partnership's reimbursement to the buyer for tenant
improvement costs related to a newly negotiated lease. At the time of sale, the
costs were estimated and included in the Partnership's Statement of Operations
at October 31, 1995. Subsequently, the estimates were modified, resulting in
this additional expenditure. This amount is included in the Partnership's
general and administrative expense category. Second, during the second and
fourth quarters of fiscal 1996, the Partnership reserved approximately $33,700
for bad debts related to the unsuccessful collection of past due rents from
several former tenants at Parkway. This amount is also included in the general
and administrative expense category. Other expense items with significant
fluctuations on a proforma basis include a $46,157 increase in environmental-
related expenses associated with the remediation of the PERC contamination at
Parkway as more fully discussed below and in Note 7 to the Financial Statements
contained in Item 8 of this report. Fees and reimbursements to the Managing
General Partner decreased $6,639 (22%) for fiscal 1996 when compared to fiscal
1995 due to the decreased number of properties owned by the Partnership in the
current year. Depreciation and amortization expense increased $11,522 (7%) for
fiscal 1996 when compared to fiscal 1995 due to increased tenant turnover at
Parkway resulting in the write-off of tenant improvement and lease commissions
previously capitalized. All other expense items,
12
<PAGE>
including property taxes, repairs and maintenance and utilities, remained
relatively unchanged in fiscal 1996 when compared to fiscal 1995.
Liquidity and Capital Resources
Combined cash and cash equivalent balances, which represent Partnership cash
reserves, were $1,010,289 at October 31, 1997, representing an increase of
$342,355 when compared with fiscal 1996 year-end balances. This increase is
primarily the result of the Managing General Partner's decision to suspend the
quarterly distributions of Partnership cash flows to limited partners due to the
continued analysis of potential environmental remediation costs at Parkway. Net
cash provided by operating activities in fiscal 1997 amounted to $423,443. The
payable to the Managing General Partner increased $101,618 to $129,836 due
primarily to cash advances made by the Managing General Partner for Partnership
expenses in fiscal 1997.
Net cash used by investing activities in fiscal 1997 amounted to $2,635 and is
comprised solely of deferred leasing costs included under the caption real
estate held for sale on the balance sheet. The Partnership's deferred leasing
costs in fiscal 1997 include costs related to lease commissions and tenant
improvements associated with the leasing of vacant space to new tenant and the
renewal of existing tenants at Parkway.
Net cash used by financing activities amounted $78,453 in fiscal 1997, the
result of reductions in mortgage principal related to the mortgage secured by
Parkway.
The Partnership is required under its Partnership Agreement to maintain cash
reserves of not less than 2% of aggregate capital contributions from limited
partners for normal repairs, replacements, working capital and other
contingencies. As of October 31, 1997, the Partnership had $1,010,289 in cash
reserves, while the minimum required amount was $214,340. On February 12, 1998,
subsequent to the sale of the Remaining Property, the Partnership made an
initial distribution of $275 per Unit out of the Partnership's available cash.
The Partnership retained approximately $380,000 to establish reserves for the
payment of the Partnership's previous ownership of the Remaining Property, and
to cover the costs and expenses associated with the Partnership's liquidation
and dissolution. The Partnership may make one or more interim distributions
during its winding up process as contingent liabilities lapse and the time of
the liquidation and dissolution becomes more certain. Upon liquidation and
dissolution the Partnership will make a final distribution of its remaining
cash, constituting the remaining asset of the Partnership to the limited
partners.
The Partnership attempted to sell the Remaining Property during fiscal 1997 and
accordingly classified the Remaining Property as held for sale. The existence of
environmental contamination limited the potential buyers of the Remaining
Property to entrepreneurial investors who, unlike many institutional investors
or public real estate investment trusts, did not have financing or other
constraints restricting them from purchasing real property subject to an ongoing
environmental remediation project. Despite the limited marketability of the
Remaining Property the Partnership entered into the Purchase and Sale Agreement.
Certain contingencies delayed closing the sale of the Remaining Property into
the 1998 fiscal year. The sale of the Remaining Property closed on January 28,
1998 and the Partnership received gross proceeds of $8,500,000. Upon closing the
sale of the Remaining Property the Partnership used a portion of the proceeds to
pay the
13
<PAGE>
mortgage secured by the Remaining Property and certain customary closing
expenses. The Partnership is currently in the process of liquidating and
dissolving (i.e. "winding up" its business and affairs). Once the liquidation
and dissolution is completed, the operations and existence of the Partnership
will cease. See Exhibit 99.1 for an analysis of the effect of the sale and
subsequent liquidation on the Partnership's Balance Sheet and Statement of
Operations as of October 31, 1997.
For information regarding the limited partners' approval of the sale of the
Remaining Property and the liquidation and dissolution of the Partnership, in
accordance with the terms of the Partnership Agreement see Submission of Matters
to a Vote of the Holders of Limited Partnership Interests in Item 4 of this
report.
During fiscal 1997, the Partnership continued the remediation of contamination
caused by a dry cleaning solution, tetrachloroethylene (PERC), which had been
reported by the dry cleaning tenant (the "Tenant") at the Remaining Property to
the State of Utah Department of Environmental Quality ("DEQ") in fiscal 1995.
The Tenant, utilizing the services of an environmental consulting firm,
investigated the extent of the PERC release and its effect on soil and
groundwater in the vicinity. The DEQ is monitoring the Tenant's progress.
Although the Tenant is responsible for the costs of any required remediation,
should the Tenant be unable to complete the required work due to limitations of
its financial resources, it is likely that the Partnership, as owner of the
Remaining Property, would be required to complete the needed remediation. The
Partnership has been advised that groundwater contamination has occurred and the
Partnership, on behalf of and in cooperation with the Tenant, is in the process
of determining the method, cost and timing of required soil and groundwater
remediation measures. The Partnership has spent approximately $80,000 to date on
related tests as well as legal representation in connection with the PERC
release. As of October 31, 1997, the Tenant has failed to reimburse the
Partnership for expenses of remediation. The Partnership has filed suit against
the Tenant to recover its remediation expenses; however, there can be no
assurance that the Partnership will recover any or all of such expenses from the
Tenant. Accordingly, the Partnership has not recognized any income from possible
recovery of such expenses. See Note 8 of the Notes to Financial Statements in
Item 8 of this report.
On May 8, 1996, the Partnership sold the land, related improvements and personal
property of the retail center, Lindsay located at 116 North Lindsay, in Mesa,
Arizona. The purchaser, GOV, Inc., is not affiliated with the Partnership, its
Managing General Partner or any affiliate, director, officer or associate of the
foregoing, and the sales price was determined by arm's length negotiations.
Lindsay consists of a 1-building shopping center containing approximately 37,000
square feet of net rentable area on approximately 4.213 acres of land and one
vacant undeveloped parcel of land consisting of approximately .934 acres. At the
time of sale, Lindsay was approximately 38% leased and occupied.
14
<PAGE>
The net proceeds to the Partnership, before proration of operating income and
expenses related to the property, were as follows:
<TABLE>
<CAPTION>
<S> <C>
Sales price $1,000,000
Less costs of sale -
Sales commissions (60,000)
Estimated title, legal fees, and other (30,000)
Security deposit liability (9,905)
Holdback for tenant improvements in progress (50,000)
----------
Net proceeds $ 850,095
==========
The net proceeds were utilized as follows:
Partial repayment of amounts owed to Managing General Partner $ 88,000
Distribution to limited partners ($71/unit) 760,907
Addition to Partnership cash reserves 1,188
----------
Net proceeds from sale $ 850,095
==========
</TABLE>
The Partnership recorded a net loss on sale of real estate investment of $20,402
related to this transaction, resulting from the excess of the Partnership's net
carrying value of Lindsay over the net sales proceeds.
On October 4, 1995, the Partnership sold the land, related improvements and
personal property of the retail center known as Clackamas. The purchaser,
Stephen M. Berrey, is not affiliated with the Partnership, its Managing General
Partner or any affiliate, director, officer or associate of the foregoing, and
the sales price was determined by arm's length negotiations. Clackamas consists
of a one-building shopping center containing approximately 26,500 square feet of
net rentable area on approximately 2.19 acres of land. At the time of sale,
Clackamas was approximately 100% leased and occupied.
The net proceeds to the Partnership before proration of operating income and
expenses related to the property were as follows:
<TABLE>
<CAPTION>
<S> <C>
Sales price $2,450,000
Less costs of sale-
Sales commissions (98,000)
Title, legal fees, and other (111,508)
Security deposit liability (6,199)
----------
Net proceeds $2,234,293
==========
The net proceeds were distributed to limited partners on October 26, 1995 as follows:
Net proceeds from sale $2,234,293
Utilization of Partnership cash reserves 37,708
----------
Distribution to limited partners ($212/unit) $2,272,001
==========
</TABLE>
The Partnership recorded a net gain on sale of real estate investment of
$684,856 related to this transaction, resulting from the excess of the net sales
proceeds over the Partnership's net carrying value of Clackamas.
15
<PAGE>
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following Financial Statements of the Partnership are included
herein:
<TABLE>
<CAPTION>
<S> <C>
Independent Auditors' Report 17
Balance Sheets - October 31, 1997 and 1996 18
Statements of Operations -
Years ended October 31, 1997, 1996, and 1995 19
Statements of Partners' Capital -
Years ended October 31, 1997, 1996, and 1995 20
Statements of Cash Flows -
Years ended October 31, 1997, 1996 and 1995 21
Notes to Financial Statements 22
</TABLE>
16
<PAGE>
Independent Auditors' Report
----------------------------
The Partners
Boettcher Pension Investors, Ltd.:
We have audited the accompanying balance sheets of Boettcher Pension Investors,
Ltd. (a limited partnership) as of October 31, 1997 and 1996, and the related
statements of operations, partners' capital and cash flows for each of the years
in the three-year period ended October 31, 1997. 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.
As discussed in Note 8 to the financial statements, Boettcher Pension Investors,
Ltd. is in the process of winding up, liquidating its assets and dissolving, as
provided in the Partnership Agreement. The Partnership's management's plans in
regard to this matter are also discussed in Note 8.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Boettcher Pension Investors,
Ltd. as of October 31, 1997 and 1996, and the results of its operations and its
cash flows for each of the years in the three-year period ended October 31,
1997, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Denver, Colorado
January 26, 1998, except as to
paragraphs one and two of Note
8 which are as of February 12, 1998.
17
<PAGE>
BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Balance Sheets
October 31, 1997 and 1996
<TABLE>
<CAPTION>
Assets 1997 1996
------ ---------- ----------
<S> <C> <C>
Real estate held for sale, at cost $6,041,334 $6,038,699
Cash and cash equivalents at costs 1,010,289 667,934
Accounts receivable and other assets, net
of allowances of $109,824 and $77,727,
respectively 64,500 42,918
---------- ----------
$7,116,123 $6,749,551
========== ==========
Liabilities and Partners' Capital
- ---------------------------------
Mortgage payable $5,677,453 $5,755,906
Accounts payable and accrued liabilities 30,854 23,191
Payable to managing general partner 129,836 28,218
Property taxes payable 54,974 59,232
Other liabilities 21,597 23,912
---------- ----------
Total Liabilities 5,914,714 5,890,459
---------- ----------
Partners' Capital:
General partners (35,857) (35,857)
Limited partners 1,237,266 894,949
---------- ----------
Total Partners' Capital 1,201,409 859,092
---------- ----------
$7,116,123 $6,749,551
========== ==========
</TABLE>
See accompanying notes to financial statements.
18
<PAGE>
BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Statements of Operations
Years ended October 31, 1997, 1996, and 1995
<TABLE>
<CAPTION>
1997 1996 1995
---------- ----------- -----------
<S> <C> <C> <C>
Revenue:
Rental income $ 967,204 $ 981,777 $1,238,182
Interest income, net 36,857 30,863 20,016
Tenant reimbursements
and other income 167,347 180,206 261,054
---------- ---------- ----------
1,171,408 1,192,846 1,519,252
---------- ---------- ----------
Expenses:
Interest 498,187 550,891 557,948
Depreciation and amortization - 195,840 277,677
Property taxes 61,711 82,585 123,361
Fees and reimbursements to
managing general partner 25,963 23,201 29,840
Other management fees 44,176 49,184 61,756
Repairs and maintenance 69,541 72,370 90,898
Utilities 21,558 34,267 44,514
General and administrative 74,020 123,487 63,971
Environmental 33,935 46,157 -
---------- ---------- ----------
829,091 1,177,982 1,249,965
---------- ---------- ----------
Earnings from operations 342,317 14,864 269,287
Gain (loss) on sale of real estate
investment - (20,402) 684,856
---------- ---------- ----------
Net earnings (loss) $ 342,317 $ (5,538) $ 954,143
========== ========== ==========
Net earnings (loss) per limited
partnership unit $31.94 $(.52) $89.03
========== ========== ==========
Weighted average number of limited
partnership units outstanding 10,717 10,717 10,717
========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
19
<PAGE>
BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Statements of Partners' Capital
Years ended October 31, 1997, 1996, and 1995
<TABLE>
<CAPTION>
Total
General Limited partners'
partners partners capital
----------- ------------ ------------
<S> <C> <C> <C>
Capital (deficit) at November 1, 1994 $ (42,502) $ 3,414,577 $ 3,372,075
Distributions to partners - (2,700,681) (2,700,681)
Gain on sale of real estate 6,849 678,007 684,856
Net earnings from operations - 269,287 269,287
--------- ----------- -----------
Capital (deficit) at October 31, 1995 (35,653) 1,661,190 1,625,537
Distributions to partners - (760,907) (760,907)
Loss on sale of real estate (204) (20,198) (20,402)
Net earnings from operations - 14,864 14,864
--------- ----------- -----------
Capital (deficit) at October 31, 1996 (35,857) 894,949 859,092
Net earnings from operations - 342,317 342,317
--------- ----------- -----------
Capital (deficit) at October 31, 1997 $ (35,857) $ 1,237,266 $ 1,201,409
========= =========== ===========
</TABLE>
See accompanying notes to financial statements.
20
<PAGE>
BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Statements of Cash Flows
Years ended October 31, 1997, 1996, and 1995
<TABLE>
<CAPTION>
1997 1996 1995
---------- --------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ 342,317 $ (5,538) $ 954,143
Adjustments to reconcile net earnings
to net cash provided by
operating activities:
Depreciation and amortization - 195,840 277,677
(Gain) loss on sale of real estate investment - 20,402 (684,856)
Change in operating assets and liabilities:
(Increase ) decrease in accounts receivable
and other assets (21,582) 84,952 (9,922)
Increase (decrease) in accounts
payable and accrued liabilities 7,663 (36,429) 37,624
Increase (decrease) in payable
to managing general partner 101,618 (12,555) 33,110
Decrease in property taxes payable (4,258) (5,707) (12,026)
Decrease in accrued interest payable - (46,235) (559)
Decrease in other liabilities (2,315) (3,224) (12,130)
---------- --------- -----------
Net cash provided by operating activities 423,443 191,506 583,061
---------- --------- -----------
Cash flows from investing activities:
Net proceeds from sale of real estate
investments - 886,190 2,234,293
Additions to real estate held for sale (2,635) - (792)
Increase in deferred leasing costs - (80,252) (70,517)
---------- --------- -----------
Net cash provided (used) by investing activities (2,635) 805,938 2,162,984
---------- --------- -----------
Cash flows from financing activities:
Distributions to limited partners - (760,907) (2,700,681)
Payments of mortgage payable (78,453) (84,354) (70,554)
---------- --------- -----------
Net cash used by financing activities (78,453) (845,261) (2,771,235)
---------- --------- -----------
Net increase (decrease) in cash and cash equivalents 342,355 152,183 (25,190)
Cash and cash equivalents at beginning of year 667,934 515,751 540,941
---------- --------- -----------
Cash and cash equivalents at end of year $1,010,289 $ 667,934 $ 515,751
========== ========= ===========
Supplemental schedule of cash flow information:
Interest paid in cash during the year $ 498,187 $ 597,126 $ 558,507
========== ========= ===========
</TABLE>
See accompanying notes to financial statements.
21
<PAGE>
BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Notes to Financial Statements
October 31, 1997, 1996, and 1995
- --------------------------------------------------------------------------------
(1) Significant Accounting Principles
Organization and Allocation of Income and Losses
Boettcher Pension Investors Ltd. (the "Partnership") is a limited
partnership formed on May 8, 1984 for the purpose of investing in improved
and unimproved real property on an unleveraged basis and to purchase or
originate participating mortgage loans and land lease investments. Limited
partnership interests ("Units") were sold through a public offering and as
of October 31, 1997, 1996 and 1995, 10,717 Units at $1,000 per Unit were
outstanding.
The Managing General Partner of the Partnership is Boettcher Affiliated
Investors, L.P. ("BAILP"), and the associate general partner is Boettcher
1984 Associates, Ltd.
The Partnership Agreement provides for the net operating income, as
defined, of the Partnership to be allocated to the partners in accordance
with their relative participation in distribution of operating cash flow.
Operating cash flow is allocated as follows: (i) to the limited partners to
the extent necessary to equal 9% simple interest on the adjusted capital
contributions of the limited partners; (ii) to the General Partners until
they have received an amount equal to 10% of the aggregate amount to be
distributed for the period under (i) and (ii); and (iii) any remaining
balance, 10% to the General Partners and 90% to the limited partners. Net
operating cash flow for the years ended October 31, 1997, 1996 and 1995 is
less than the 9% preferred return and, accordingly, net earnings from
operations for fiscal 1997, 1996 and 1995 has been allocated solely to the
limited partners.
The Partnership Agreement provides for net capital income from the sale or
other disposition of Partnership properties to be allocated on a cumulative
basis as follows: (i) first, to the extent of gross income applicable to
prior depreciation deductions, 1% to the General Partners and 99% to the
limited partners; (ii) second, to each of the partners in accordance with
their relative participations in distributions of net proceeds and
repayment proceeds. Net capital loss is allocated 1% to the General
Partners and 99% to the limited partners.
Basis of Accounting
The Partnership uses the accrual method of accounting. As discussed in Note
8, the Partnership has begun the process of winding up its activities,
liquidating its assets, and dissolving, as provided for in the Partnership
Agreement. The accompanying financial statements have been prepared in
accordance with generally accepted accounting principles on a basis
consistent with prior years and do not reflect liquidation accounting.
Environmental Remediation Liabilities
Liabilities for loss contingencies, including environmental remediation
costs, arising from claims, assessments, litigation, fines and penalties,
and other sources are recorded when it is probable that a liability has
been incurred and the amount of the assessment and/or
22
<PAGE>
BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Notes to Financial Statements
October 31, 1997, 1996, and 1995
- --------------------------------------------------------------------------------
remediation can be reasonably estimated. The costs of site clean-up are
recorded in the amount of the cash payments made or for future estimated
costs for that site when fixed or reliably determinable based upon
information derived from the remediation plan for that site. Recoveries
from third parties which are probable of realization are separately
recorded, and are not offset against the related environmental liability.
In October 1996, the American Institute of Certified Public Accountants
issued Statement of Position ("SOP") 96-1, Environmental Remediation
Liabilities. SOP 96-1 was adopted by the Partnership during fiscal 1997 and
required, among other things, environmental remediation liabilities to be
accrued when the criteria of SFAS No. 5, Accounting for Contingencies, have
been met. The SOP also provides guidance with respect to the measurement of
the remediation liabilities. Such accounting is consistent with the
Partnership's current method of accounting for environmental remediation
costs and therefore, adoption of this new Statement did not have a material
impact on the Partnership's financial position, results of operations, or
liquidity.
Deferred Leasing Costs
Costs associated with the leasing of the Partnership's retail shopping
center are deferred and amortized over the life of the related leases.
These costs are comprised of lease commissions and construction costs
related to the buildout of tenant space.
Financial Instruments
The fair value of the Partnership's financial instruments approximate their
carrying values due to the short maturities of those instruments or due to
the interest rates of those instruments approximating interest rates for
similar issues.
Business and Credit Concentrations
The Partnership's remaining real estate investment, Parkway Village
Shopping Center ("Parkway"), is located in Provo, Utah. Three national
tenants account for fifty percent of the rental income.
The Partnership estimates an allowance for doubtful accounts based on the
credit worthiness of its customers as well as general economic conditions.
Consequently, an adverse change in those factors could effect the
Partnership's estimate of its bad debts. At October 31, 1997, the
Partnership had $109,824 of tenant receivables from current and former
tenants of Parkway for which an allowance for doubtful accounts have been
established.
Income Taxes
No provisions has been made for Federal income taxes, as the taxable income
(loss) is reported by the partners rather than the Partnership. The
Partnership reports certain transactions differently for tax and financial
statement purposes, primarily depreciation.
23
<PAGE>
BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Notes to Financial Statements
October 31, 1997, 1996, and 1995
- --------------------------------------------------------------------------------
A reconciliation of net earnings as shown in the accompanying financial
statements and the Partnership's income (loss) for tax purposes is shown in
the table below. The October 31, 1997 net earnings as shown in the
financial statements is actual. However, the Partnership's tax return for
the year ended December 31, 1997 has not yet been prepared; therefore, the
reconciling items for 1997 are estimates by management.
<TABLE>
<CAPTION>
(Unaudited)
1997 1996 1995
--------- --------- ----------
<S> <C> <C> <C>
Net earnings (loss) per
financial statements $ 342,317 $ (5,538) $ 954,143
Fiscal to calendar year
net difference 56,630 4,341 (38,348)
Tax depreciation and amortization
in excess of depreciation and
amortization per financial statements (155,000) (5,143) (26,861)
Tax gain (loss) on sale of real estate
greater than (less than) financial
statement gain (loss) - (963,194) 179,878
Items recorded in different
year for financial statement
and tax purposes -
Allowance for doubtful accounts 109,854 78,663 -
Rental income (15,000) 16,154 (8,442)
--------- --------- ----------
Income for tax purposes $ 338,801 $(874,717) $1,060,370
========= ========= ==========
</TABLE>
Real Estate Held for Sale
Real estate held for sale is recorded at the lower of cost or fair value
based on independent appraised values less estimated selling costs.
During 1996 and prior years, buildings and improvements were depreciated
using the straight-line method over an estimated useful life of 30 years.
Equipment and furnishings were depreciated using the straight-line method
over an estimated useful life of 10 years. Renewals and betterments are
capitalized and repairs and maintenance are charged to operations as
incurred.
Effective November 1, 1996, the Partnership adopted Statement of Financial
Accounting Standards No. 121, "Accounting for the impairment of long-lived
assets and for long-lived assets expected to be disposed of ("SFAS 121").
The adoption of SFAS 121 resulted in
24
<PAGE>
BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Notes to Financial Statements
October 31, 1997, 1996, and 1995
- --------------------------------------------------------------------------------
the Partnership no longer recording depreciation and amortization expense
on its real estate held for sale.
Cash and Cash Equivalents
For purposes of the statements of cash flows, cash and cash equivalents
include highly liquid debt instruments purchased with an original maturity
of three months or less. Cash and cash equivalents as of October 31 are
comprised of the following:
<TABLE>
<CAPTION>
1997 1996
---------- --------
<S> <C> <C>
Money market fund $1,009,833 $660,864
Operating cash 456 7,070
---------- --------
Cash and cash equivalents $1,010,289 $667,934
========== ========
</TABLE>
Use of Estimates
Management of the Partnership has made a number of estimates and
assumptions relating to the reporting of assets and liabilities and the
disclosure of contingent assets and liabilities to prepare these financial
statements in conformity with generally accepted accounting principles.
Actual results could differ from those estimates.
Reclassifications
Certain prior year amounts have been reclassified to conform with fiscal
1997 financial statement presentation.
(2) Real Estate Held For Sale
As of October 31, 1997 and 1996, the fair value of the Partnership's real
estate held for sale exceeds cost based upon the sale of the Remaining
Property subsequent to October 31, 1997. (See Note 8).
Sales of Real Estate Investments:
Lindsay-Main Plaza
On May 8, 1996, the Partnership sold the land, related improvements and
personal property of the retail center known as Lindsay-Main Plaza
("Lindsay") located at 116 North Lindsay, in Mesa, Arizona. The purchaser,
GOV, Inc., is not affiliated with the Partnership, its Managing General
Partner or any affiliate, director, officer or associate of the foregoing,
and the sales price was determined by arm's length negotiations. Lindsay
consists of a 1-building shopping center containing approximately 37,000
square feet of net rentable area on approximately 4.213 acres of land and
one vacant undeveloped parcel of land consisting of approximately .934
acres. At the time of sale, Lindsay was approximately 38% leased and
occupied.
25
<PAGE>
BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Notes to Financial Statements
October 31, 1997, 1996, and 1995
- --------------------------------------------------------------------------------
The net proceeds to the Partnership, before proration of operating income and
expenses related to the property, were as follows:
<TABLE>
<CAPTION>
<S> <C>
Sales price $1,000,000
Less costs of sale -
Sales commissions (60,000)
Estimated title, legal fees, and other (30,000)
Security deposit liability (9,905)
Holdback for tenant improvements in progress (50,000)
----------
Net proceeds from sale $ 850,095
==========
The net proceeds were utilized as follows:
Partial repayment of amounts owed to Managing General Partner $ 88,000
Distribution to limited partners ($71/unit) 760,907
Addition to Partnership cash reserves 1,188
----------
Net proceeds from sale $ 850,095
==========
</TABLE>
The Partnership recorded a net loss on sale of real estate investment of $20,402
related to this transaction, resulting from the excess of the Partnership's net
carrying value of Lindsay over the net sales proceeds.
Clackamas Corner
On October 4, 1995, the Partnership sold the land, related improvements and
personal property of the retail center known as Clackamas Corner located at the
northeast corner of the Clackamas Town Center in unincorporated Clackamas
County, Oregon. The purchaser, Stephen M. Berrey, is not affiliated with the
Partnership, its Managing General Partner or any affiliate, director, officer or
associate of the foregoing, and the sales price was determined by arm's length
negotiations. Clackamas Corner consists of a one-building shopping center
containing approximately 26,500 square feet of net rentable area on
approximately 2.19 acres of land. At the time of sale, Clackamas Corner was
approximately 100% leased and occupied.
The net proceeds to the Partnership before proration of operating income and
expenses related to the property were as follows:
<TABLE>
<CAPTION>
<S> <C>
Sales price $2,450,000
Less costs of sale-
Sales commissions (98,000)
Title, legal fees, and other (111,508)
Security deposit liability (6,199)
----------
Net proceeds from sale $2,234,293
==========
</TABLE>
26
<PAGE>
BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Notes to Financial Statements
October 31, 1997, 1996, and 1995
- --------------------------------------------------------------------------------
The net proceeds were distributed to limited partners on October 26, 1995
as follows:
<TABLE>
<CAPTION>
<S> <C>
Net proceeds from sale $2,234,293
Utilization of Partnership cash reserves 37,708
----------
Distribution to limited partners ($212/unit) $2,272,001
==========
</TABLE>
The Partnership recorded a net gain on sale of real estate investment of
$684,856 related to this transaction, resulting from the excess of the net
sales proceeds over the Partnership's net carrying value of Clackamas
Corner.
(3) Mortgage Payable
The mortgage payable is secured by a first deed of trust on Parkway and is
nonrecourse to the Partnership. The carrying value of Parkway, the real
estate collateralizing this debt, was $6,041,334 at October 31, 1997. The
payment terms of the mortgage note are as follows:
<TABLE>
<CAPTION>
<S> <C>
Interest Rate: 9.5%
Monthly Payment: $52,422
Due Date: May 5, 2003
</TABLE>
Aggregate maturities of principal payments for the five fiscal years ending
October 31, 2002 and thereafter related to the Parkway mortgage are as
follows:
<TABLE>
<CAPTION>
<S> <C>
1998 $ 93,714
1999 103,016
2000 113,238
2001 124,479
2002 136,832
Thereafter 5,106,174
----------
$5,677,453
==========
</TABLE>
(4) Transactions with Related Parties
BAILP is the Managing Agent of the Partnership and is paid property
management, loan servicing, and acquisition fees for its services to the
Partnership. The property management fee is equal to 5% of gross receipts
from the Properties, less management fees paid to others. The property
management fee earned by BAILP amounted to $12,750, $8,889 and $13,328 for
the years ended October 31, 1997, 1996 and 1995, respectively.
The Partnership also reimburses BAILP for its allocable share of salaries
of nonmanagement and nonsupervisory personnel providing accounting,
investor reporting
27
<PAGE>
BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Notes to Financial Statements
October 31, 1997, 1996, and 1995
- --------------------------------------------------------------------------------
and communications, and legal services to the Partnership and allowable
expenses related to the maintenance and repair of data processing equipment
used for or by the Partnership. The amount due to BAILP for such
reimbursements amounted to $13,212, $14,312, and $16,512 for the years
ended October 31, 1997, 1996, and 1995, respectively.
(5) Future Rental Income
Aggregate base rental income relating to long-term noncancellable leases
for the Partnership's properties for the five fiscal years ending October
31, 2002 and thereafter is as follows:
<TABLE>
<CAPTION>
<S> <C>
1998 $ 836,417
1999 713,135
2000 590,084
2001 515,567
2002 426,917
Thereafter 2,061,858
----------
$5,143,978
==========
</TABLE>
(6) Liquidity and Debt Maturities
The Partnership is required under its Partnership Agreement to maintain
cash reserves of not less than 2% of aggregate capital contributions from
limited partners for normal repairs, replacements, working capital and
other contingencies. As of October 31, 1997, the Partnership had $1,010,289
in cash reserves, while the minimum required amount was $214,340. On
February 12, 1998, subsequent to the closing of the sale of the Remaining
Property, the Partnership made an initial distribution of $275 per limited
partnership unit ("Unit") out of the Partnership's available cash. The
Partnership retained approximately $380,000 to establish reserves for the
payment of the Partnership's remaining debts and liabilities, to cover
contingent liabilities resulting from the Partnership's previous ownership
of the Remaining Property, and to cover the costs and expenses associated
with the Partnership's liquidation and dissolution. The Partnership may
make one or more interim distributions during its winding up process as
contingent liabilities lapse and the time of the liquidation and
dissolution becomes more certain. Upon liquidation and dissolution the
Partnership will make a final distribution of its remaining cash,
constituting the remaining asset of the Partnership, to the limited
partners. See Note 3 for a description of the Partnership's debt
obligations at October 31, 1997.
28
<PAGE>
BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Notes to Financial Statements
October 31, 1997, 1996, and 1995
- --------------------------------------------------------------------------------
(7) Environmental Remediation Costs
In fiscal 1995, a non sudden release of a dry cleaning solution,
tetrachloroethylene (PERC), was reported by the dry cleaning tenant (the
Tenant) at Parkway to the State of Utah Department of Environmental Quality
(DEQ). The Tenant, utilizing the services of an environmental consulting
firm, investigated the extent of the PERC release and its effect on soil
and groundwater in the vicinity. The DEQ is monitoring the Tenant's
progress. Although the Tenant is responsible for the costs of any required
remediation, should the Tenant be unable to complete the required work due
to limitations of its financial resources, it is likely that the
Partnership, as owner of Parkway, would be required to complete the needed
remediation. The Partnership has been advised that groundwater
contamination has occurred and the Partnership on behalf of and in
cooperation with the tenant, is in the process of determining the method,
cost and timing of required soil and groundwater remediation measures. The
Partnership has spent approximately $80,000 through October 31, 1997 on the
above mentioned testing as well as legal representation in connection with
the PERC release. Management is unable at this time to estimate the full
extent of additional expenses that may be incurred. However, the
Partnership sold the property subsequent to October 31, 1997. Pursuant to
the Purchase and Sale Agreement, the Buyer is purchasing the Property "as
is" from the Partnership. The Buyer has investigated the Property
thoroughly and is aware of and has evaluated the environmental remediation
requirements with respect to the Property. The Buyer has released the
Partnership from any and all claims it may have against the Partnership
with respect to environmental remediation matters; however, the Partnership
will remain liable to the extent provided by law for any environmental
remediation relating to its period of ownership of the Property, subject to
its right to recover from the Tenant.
(8) Sale of Real Estate and Dissolution of the Partnership
The Partnership attempted to sell the Remaining Property in the fiscal year
ended October 31, 1997. The existence of environmental contamination
limited the potential buyers of the Remaining Property to entrepreneurial
investors. Despite the limited marketability of the Remaining Property, the
Partnership entered into the Purchase and Sale Agreement, which became
effective on July 14, 1997, for the sale of the Remaining Property for a
sale price of $8,500,000. Certain contingencies delayed the expected sale
closing date into the early part of 1998. On January 28, 1998 the
Partnership closed on the sale of the Remaining Property and repaid the
mortgage secured by the Remaining Property and certain other customary
closing expenses.
On February 12, 1998, subsequent to the closing of the sale of the
Remaining Property, the Partnership made an initial distribution of $275
per limited partnership unit ("Unit") out of the Partnership's available
cash. The Partnership retained approximately $380,000 to establish reserves
for the payment of the Partnership's remaining debts and liabilities, to
cover contingent liabilities resulting from the Partnership's previous
ownership of the Remaining Property, and to cover the costs and expenses
associated with the Partnership's liquidation and dissolution. The
Partnership may make one or more interim distributions during its winding
up process as contingent liabilities lapse and the time of the liquidation
and dissolution becomes more certain. Upon liquidation and dissolution the
Partnership will make a final distribution of its remaining cash,
constituting the remaining asset of the Partnership, to the limited
partners.
29
<PAGE>
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no changes in accountants or disagreements with accountants on
any matter of accounting principles or practices on financial statement
disclosure or auditing scope or procedure.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership does not have directors or executive officers. The general
partner of the Partnership's Managing General Partner and Associate General
Partner is Boettcher Properties Ltd. (BPL). BPL Holdings, Inc. (BPL Holdings), a
Delaware corporation is the general partner of BPL. During fiscal 1995, the
ultimate parent company of BPL Holdings (Kemper Securities Holdings, Inc.)
experienced a change in ownership, whereby it became a wholly-owned subsidiary
of EVEREN Capital Corporation and changed its name to EVEREN Securities
Holdings, Inc. (ESHI). EVEREN Securities, Inc. is a wholly-owned subsidiary of
ESHI. These changes have had no impact on the day-to-day operations of BPL
Holdings. The following is a list of the directors and officers of BPL Holdings.
Present Position and Principal Occupation and Affiliation
Name and Age During the Last Five Years or More:
Janet L. Reali President and Principal Executive Officer of BPL
Age: 46 Holdings, Inc.
Ms. Reali was elected Executive Vice President and
Secretary of EVEREN Capital Corporation in May 1995.
Since December 1993 she has been Executive Vice
President, Corporate Counsel and Corporate Secretary of
EVEREN Securities, Inc. She became a Director and the
President of BPL Holdings, Inc. in May 1995. She was
Senior Vice President and Associate General Counsel of
EVEREN Securities, Inc. from July 1991 to December 1993.
Before joining EVEREN Securities, Inc. she was a partner
in the Chicago law firm of Keck, Mahin & Cate.
Stanley R. Fallis Director of BPL Holdings, Inc.
Age: 56 Mr. Fallis graduated from the University of Idaho with a
BS degree in accounting. Mr. Fallis also obtained an MBA
degree from the University of Utah. Mr. Fallis is a
Certified Public Accountant and practiced public
accounting for six years. Mr. Fallis was associated with
Boettcher and Company and its successor, EVEREN
Securities, Inc. for 18 years. He served as Chief
Financial Officer of EVEREN Securities Inc. From August
1990 to January 1994. He then served as Senior Vice
President of Kemper Corporation from March 1994 to March
1995. He is currently Senior Executive Vice President and
Director of Administration of EVEREN Securities, Inc.
30
<PAGE>
Daniel D. Williams Director and Vice President of BPL Holdings, Inc.
Age: 46 Mr. Williams became a Director and Vice President of BPL
Holdings, Inc. May 1995. Mr. Williams was elected Senior
Executive Vice President, Treasurer and Chief Financial
Officer of EVEREN Capital Corporation in May 1995. Since
April 1995 he has been Senior Executive Vice President
and Chief Financial Officer of EVEREN Securities, Inc.
From January 1994 to April 1995, Mr. Williams was
Executive Vice President and Director of Finance and
Administration, and from January 1991 to January 1994 he
was Senior Vice President and Director of Accounting of,
EVEREN Securities, Inc. Prior thereto, he was Executive
Vice President, Treasurer and Chief Financial Officer of
Boettcher and Company.
Kelly J. Stradinger Vice President and Secretary of BPL Holdings, Inc.
Age: 38 Mr. Stradinger joined BPL in 1983 as Assistant Controller
for the syndicated public real estate partnerships. Mr.
Stradinger is currently in charge of asset management for
all syndicated partnerships where BPL or an affiliate is
the general partner. He is also a Vice President of
EVEREN Securities, Inc. and Director of Leasing for the
facilities management department. Mr. Stradinger
graduated from Western Michigan University with a
Bachelor of Business Administration in Accounting and
successfully completed the Certified Public Accountant
exam.
Thomas M. Mansheim Director and Treasurer of BPL Holdings, Inc. (Principal
Age: 40 Financial and Accounting Officer of the Partnership)
Mr. Mansheim joined BPL in 1984 and is currently a Senior
Vice President with EVEREN Securities, Inc. He became a
Director of BPL Holdings in July 1995 and has been the
Treasurer of BPL Holdings, Inc. since December 1987. Mr.
Mansheim is a Certified Public Accountant and from 1980
to 1984 was employed with KPMG Peat Marwick. Mr. Mansheim
graduated from the University of Colorado with a Bachelor
of Science degree in business administration.
There is no family relationship among the officers or directors of BPL Holdings
or any of its affiliates.
31
<PAGE>
Item 11. EXECUTIVE COMPENSATION
The Partnership, as an entity, does not have any directors or executive
officers. The information required by Item 402 of Regulation SK relating to
amounts owed by the Partnership to the Managing General Partner and its
affiliates for services rendered during the fiscal year ended October 31, 1997
is presented below. Reference is also made to Note 4 to Financial Statements as
contained in Item 8 of this report for a description of related parties.
<TABLE>
<CAPTION>
Total
Capacities In Which Cash Deferral Fees
Name of Entity Compensation Was Earned Paid of Fees Earned
- -------------- ----------------------- ---- -------- ------
<S> <C> <C> <C> <C>
Boettcher Reimbursement of direct - $13,212 $13,212
Affiliated general and administrative
Investors L.P. expenses
Boettcher Property Management Fee - $12,750 $12,750
Affiliated
Investors L.P.
</TABLE>
No form of non-cash remuneration was paid by the Partnership. See Item 13 below
with respect to a description of certain transactions of the Managing General
Partner and its affiliates with the Partnership.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To the knowledge of the Partnership, no person or group owns of record or
beneficially more than 5% of the outstanding Units.
The Partnership has no directors or executive officers. To the knowledge of the
Partnership, no directors or officers of the Managing General Partner or its
affiliates currently own any Units.
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.
32
<PAGE>
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership has no directors or executive officers. The information required
by Item 404 of Regulation S-K is set forth in Item 11, Executive Compensation,
as contained in this report.
The Partnership has a Management Agreement with the Managing General Partner
pursuant to which the Managing General Partner is responsible for finding and
negotiating the acquisition of suitable investments for the Partnership,
originating or purchasing mortgage loans and negotiating lease terms for land
lease transactions. The Managing General Partner is also responsible for
performing the day-to-day investment and administrative operations of the
Partnership and supervising the management and operation of the Partnership's
Properties. For such services, the Managing General Partner is entitled to
receive annual fees comprised of a Property Management Fee and a Loan Servicing
Fee as more fully discussed in Note 4 to the Financial Statements as contained
in Item 8 of this report. The Managing General Partner earns such fees for
services provided to the Partnership pursuant to the Management Agreement and
not by reason of its Partnership interest. The Managing General Partner earned a
Property Management Fee of $12,750 for the fiscal year ended October 31, 1997.
Pursuant to the Partnership Agreement, the Managing General Partner may be
reimbursed by the Partnership for certain of its costs including reimbursements
for its allocable share of salaries of nonmanagement and nonsupervisory
personnel providing accounting, investor reporting and communications and legal
services to the Partnership, and the maintenance and repair of data processing
equipment used for or by the Partnership. Pursuant to such provisions for
services provided during the fiscal year ended October 31, 1997, the Managing
General Partner is entitled to receive reimbursements aggregating $13,212.
The Partnership Agreement provides for the net operating income of the
Partnership to be allocated to the partners in accordance with their relative
participation in distribution of operating cash flow. Operating cash flow is
allocated as follows: (i) to the limited partners to the extent necessary to
equal 9% simple interest on the adjusted capital contributions of the limited
partners; (ii) to the General Partners until they have received an amount equal
to 10% of the aggregate amount to be distributed for the period under (i) and
(ii); and (iii) any remaining balance, 10% to the General Partners and 90% to
the limited partners. Net operating cash flow for the years ended October 31,
1997, 1996 and 1995 is less than the 9% preferred return and, accordingly, net
operating income for fiscal 1997, 1996 and 1995 has been allocated solely to the
limited partners.
The Partnership Agreement provides for net capital income from the sale or other
disposition of Partnership properties to be allocated on a cumulative basis as
follows: (i) first, to the extent of gross income applicable to prior
depreciation deductions, 1% to the General Partners and 99% to the limited
partners; (ii) second, to each of the partners in accordance with their relative
participations in distributions of net proceeds and repayment proceeds. Net
capital loss is allocated 1% to the General Partners and 99% to the limited
partners.
33
<PAGE>
PART IV
-------
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) (1) Financial Statements
Independent Auditors' Report
Balance Sheets - October 31, 1997 and 1996
Statements of Operations -
Years ended October 31, 1997, 1996, and 1995
Statements of Partners' Capital -
Years ended October 31, 1997, 1996, and 1995
Statements of Cash Flows -
Years ended October 31, 1997, 1996 and 1995
Notes to Financial Statements
(2) Financial Statement Schedule
Independent Auditors' Report and Schedule III - Real Estate
and Accumulated Depreciation as of October 31, 1997
Schedules, other than the one listed, are omitted for the
reason that they are inapplicable or equivalent information
has been included elsewhere herein.
(3) Exhibits filed as part of this report.
Exhibit 99.1 - Proforma balance sheet and statement of
operators reflecting the sale of Parkway
Village Shopping Center.
(b) Reports on Form 8-K
The Registrant filed reports on Form 8-K and Form 8-K/A on
September 9, 1997 and September 10, 1997, respectively, with
regard to the sale of Parkway Village Shopping Center.
34
<PAGE>
(c) Exhibits
<TABLE>
NUMBER EXHIBIT
------ --------
<S> <C>
3 Limited Partnership Agreement of Registrant/1/
10.1 Inverness Income Joint Venture Agreement dated July 24, 1984/2/
10.2 Purchase and Sale Agreement with Exhibits thereto between The
Cumberland Companies, Inc., as Seller, and Inverness Income
Joint Venture as Purchaser, dated as of July 24, 1984/2/
10.3 Land Lease Agreement with exhibits thereto, between The
Cumberland Companies Inc., Lessor, and Cumberland Office Plaza
Joint Venture, Lessee, dated July 31, 1984/2/
10.4 Assignment and Assumption Agreement between Boettcher
Affiliated Investors L.P., Assignor, and Boettcher Pension
Investors Ltd., Assignee, dated October 5, 1984/2/
10.5 Advisor's Consulting Agreement dated September 19, 1984/2/
10.6 Advisor's Letter of Opinion dated September 19, 1984/2/
10.7 Management Agreement/3/
10.8 Deed of Trust Note between Johansen Thackeray MacKenzie
Properties, Ltd. and Boettcher Pension Investors Ltd. dated
September 30, 1985/4/
10.9 Deed of Trust, Security Agreement, Assignment of Rents and
Leases, and Financing Statement between Johansen Thackeray
MacKenzie Properties, Ltd. and Boettcher Pension Investors Ltd.
dated September 30, 1985/4/
10.10 Loan Agreement between Boettcher Pension Investors Ltd. and
Johansen Thackeray MacKenzie Properties, Ltd. dated September
30, 1985/4/
10.11 Collateral Assignment and Security Agreement between Boettcher
Pension Investors Ltd. and Johansen Thackeray MacKenzie
Properties, Ltd. dated September 30, 1985/4/
10.12 Guaranty dated September 30, 1985 executed by individual general
partners of Borrower (Armand D. Johansen, Donald W. MacKenzie
and John Thackeray)/4/
35
</TABLE>
<PAGE>
<TABLE>
<S> <C>
10.13 Deed of Trust Note between Lindsay-Main Plaza and Boettcher
Pension Investors Ltd. dated March 13, 1986/5/
10.14 Deed of Trust, Security Agreement and Assignment of Rents and
Leases, between Lindsay-Main Plaza and Boettcher Pension
Investors Ltd. dated March 13, 1986/5/
10.15 Loan Agreement between Boettcher Pension Investors Ltd. and
Lindsay-Main Plaza dated March 13, 1986/5/
10.16 Guarantee dated March 13, 1986 as executed by the individual
general partners of borrower. (Steven Shea, James Shea, Dennis
Foley and Darryl Foley)/5/
10.17 Purchase agreement dated May 8, 1986 between Boettcher Pension
Investors Ltd. and Westwood Corporation/6/
10.18 Notice of Commencement of Case Under Chapter 11 of the
Bankruptcy Code, Meeting of Creditors, and Fixing of Dates
dated March 20, 1992/7/
10.19 Creditors Amended Plan of Reorganization and Amended Disclosure
Statement dated February 1993/7/
10.20 Purchase and Sale Agreement for Clackamas Corner/11/
10.21 Purchase and Sale Agreement for Lindsay Main Plaza/13/
10.22 Contract of Purchase and Sale Agreement for Parkway Village
Shopping Center by and between Boettcher Pension Investors,
Ltd., as seller, and Sussex Group L.C., as buyer, dated July
14, 1997./14/
10.23 First amendment to Purchase and Sale Agreement for Parkway
Village Shopping Center by and between Boettcher Pension
Investors, Ltd., as seller, and Sussex Group L.C., as buyer,
effective August 25, 1997./15/
27 Financial Data Schedule
28.7 Creditor's Amended Plan of Reorganization dated January 27,
1993/8/
28.8 Order On Motion for Valuation of Secured Claim Held by
California Federal Bank and Objections to Claim No. 5 of
California Federal Bank dated April 13, 1993/8/
28.9 Preliminary Order on Hearing on Confirmation of Creditor's
Amended Plan of Reorganization dated April 13, 1993/8/
28.10 Order Confirming Creditor's Amended Plan of Reorganization
dated April 14, 1993/8/
28.11 Notice of Appeal to District Court dated April 23, 1993/8/
</TABLE>
36
<PAGE>
28.12 Order on Boettcher Pension Investors Ltd.'s Motion to Dismiss
dated September 8, 1993(9)
28.13 Motion for Entry of Final Decree dated September 26, 1994/10/
28.13 Clarified Decision on Appeal dated July 15, 1994. /12/
28.14 Supplemental Order Reconfirming the Order Confirming
Creditor's Amended Plan of Reorganization. /12/
99.1 Proforma Financial Statements
/1/ Incorporated by reference to Exhibit No. 3 to Amendment No. 1
to Form S-11 Registration Statement filed June 13, 1984 - File
No. 2-91040.
/2/ Incorporated by reference to Exhibits No. 10.1 through 10.6,
respectively, to Post-Effective Amendment No. 1 to Form S-11
Registration Statement filed October 23, 1984 - File No. 2-
91040.
/3/ Incorporated by reference to Exhibit 10 to Amendment No. 1 to
Form S-11 Registration Statement filed June 13, 1984 - File
No. 2-91040.
/4/ Incorporated by reference to Registrant's Report on Form 8-K
dated September 30, 1985 (filed February 18, 1986).
/5/ Incorporated by reference to Registrant's Report on Form 8-K
dated March 19, 1986.
/6/ Incorporated by reference to Registrant's Report on Form 8-K
dated May 21, 1986.
/7/ Incorporated by reference to Registrant's Report on Form 10-K
dated October 31, 1992.
/8/ Incorporated by reference to Registrant's Report on Form 10-Q
dated April 30, 1993.
/9/ Incorporated by reference to Registrant's Report on Form 10-Q
dated July 31, 1993.
/10/ Incorporated by reference to Registrant's Report on Form 10-K
dated October 31, 1994.
/11/ Incorporated by reference to Registrant's Report on Form 8-K
dated October 4, 1995.
/12/ Incorporated by reference to Registrant's Report on Form 10-Q
dated September 13, 1994.
/13/ Incorporated by reference to Registrant's Report on Form 8-K
dated April 30, 1996.
/14/ Incorporated by reference to Registrant's Report on Form 8-K/A
dated September 10, 1997.
/15/ Incorporated by reference to Registrant's Report on Form 8-K/A
dated September 10, 1997.
37
<PAGE>
Independent Auditor's Report
----------------------------
The Partners
Boettcher Pension Investors Ltd.:
Under date of January 26, 1998, we reported on the balance sheets of Boettcher
Pension Investors, Ltd. (a limited partnership) as of October 31, 1997 and 1996,
and the related statements of operations, partners' capital and cash flows for
each of the years in the three-year period ended October 31, 1997, as contained
in the Partnership's annual report on Form 10-K for the year 1997. In connection
with our audits of the aforementioned financial statements, we also audited the
related financial statement Schedule III - Real Estate and Accumulated
Depreciation. This financial statement schedule is the responsibility of the
Partnership's management. Our responsibility is to express an opinion on this
financial statement schedule based on our audit.
As discussed in Note 8 to the financial statements, Boettcher Pension Investors,
Ltd. is in the process of winding up, liquidating its assets and dissolving, as
provided in the Partnership Agreement. The Partnership's management's plans in
regard to this matter are also discussed in Note 8.
In our opinion, the related financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents fairly, in
all material respects, the information set forth therein.
KPMG Peat Marwick LLP
Denver, Colorado
January 26, 1998
38
<PAGE>
BOETTCHER PENSION INVESTORS, LTD.
(A Limited Partnership)
SCHEDULE III - Real Estate and Accumulated Depreciation
October 31, 1997
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Costs capitalized
PROPERTY Initial cost (a) Subsequent to acquisition Other (b)
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Land and Buildings Land and Buildings Land and Buildings
Mortgage improve- and improve- and improve- and
Payable ments Improvement ments Improvement ments Improvement
------------------------------------------------------------------------------------
SHOPPING CENTER:
Parkway Village, Provo, Utah $5,677,453 1,750,000 4,785,765 - 63,391 - -
---------- --------- --------- --------- -------- --------- ---------
Balances at October 31, 1997 $5,677,453 $1,750,000 $4,785,765 $0 $ 63,391 $0 $0
====================================================================================
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
Gross amount at close Life on which
of period (a) depr. is computed
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Land and Buildings Date of Date of Buildings Equipment
SHOPPING CENTER: improve- and Accumulated construc- acquisi- and and
ments improvement Total depreciation tion tion improvement Furnishings
-----------------------------------------------------------------------------------------------------
Parkway Village, Provo, Utah 1,750,000 4,849,156 6,599,156 (557,822) 1985 05-May-93 30 years 10 years
--------- ----------
Balances at October 31, 1997 $1,750,000 $4,849,156 $6,599,156 ($557,822)
=======================================================-----------------------------------------------
</TABLE>
Notes:
(a) Property was purchased or acquired through foreclosure during the periods
indicated above by mortgage note payable.
(b) Reconciliation of the total amount at which real estate was carried:
(c) The aggregate cost for Federal income tax purposes at October 31, 1997 for
Parkway is $5,826,725.
(d) For Federal income tax purposes, buildings are depreciated using the
modified ACRS method over an estimated useful life of 31.5 years at a rate
of 3.175% or the straight-line method over an estimated useful life of 39
years at a rate of 1/39.
(e) Real estate taxes for fiscal 1997 for Parkway Village were $61,711.
<TABLE>
<CAPTION>
Balance at October 31,
----------------------
1997 1996
---- ----
<S> <C> <C> <C> <C>
Balance at beginning of period............ $6,038,699 $6,963,631
Additions during period:
Acquisitions through foreclosure..... 0 0
Other acquisitions................... 0 0
Improvements, etc.................... $2,635 $60,756
Other (describe)..................... 0 0
------ 2,635 ------- 60,756
---------- ----------
Deductions during period: 6,041,334 7,024,387
Cost of real estate sold............. 0 985,688
Other (describe)..................... 0 0
------ 0 ------- 985,688
---------- ----------
Balance at close of period............. $6,041,334 $6,038,699
========== ==========
</TABLE>
See accompanying independent auditor's report.
<PAGE>
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.
BOETTCHER PENSION INVESTORS LTD.
--------------------------------
(Registrant)
By: Boettcher Affiliated Investors L.P.
Managing General Partner
By: Boettcher Properties, Ltd.
Managing General Partner
By: BPL Holdings, Inc.
Managing General Partner
By: /s/Thomas M. Mansheim
---------------------------------
Thomas M. Mansheim, Treasurer
Dated: February 17, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons (constituting a
majority of the Directors of the corporate General Partner of the Registrant's
Managing General Partner) on the 17th day of February, 1998 in the capacities
indicated below.
<TABLE>
<CAPTION>
Name Capacities
------ ----------
<S> <C>
DANIEL D. WILLIAMS Director and Vice President of BPL Holdings, Inc.
By: /s/ Daniel D. Williams Dated: February 17, 1998
----------------------
Daniel D. Williams
THOMAS M. MANSHEIM Director and Treasurer of BPL Holdings, Inc.;
Principal Financial and Accounting Officer of the
Partnership
By: /s/ Thomas M. Mansheim Dated: February 17, 1998
----------------------
Thomas M. Mansheim
</TABLE>
No annual report or proxy materials have been sent to the limited partners of
the Partnership. An annual report will be sent to the limited partners
subsequent to this filing, and the Partnership will furnish copies of such to
the Commission when it is sent to the limited partners.
40
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0000745895
<NAME> Boettcher Pension Investors Ltd
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<CASH> 1,010,289
<SECURITIES> 0
<RECEIVABLES> 64,500
<ALLOWANCES> 109,824
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 6,041,334
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,116,123
<CURRENT-LIABILITIES> 0
<BONDS> 5,677,453
0
0
<COMMON> 0
<OTHER-SE> 1,201,409
<TOTAL-LIABILITY-AND-EQUITY> 7,116,123
<SALES> 0
<TOTAL-REVENUES> 1,171,408
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 330,904
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 498,187
<INCOME-PRETAX> 342,317
<INCOME-TAX> 0
<INCOME-CONTINUING> 342,317
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 342,317
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<PAGE>
EXHIBIT 99.1
BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Proforma Balance Sheet
October 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Proforma Adjustments
--------------------
Historical Sale of Liquidation & Proforma
October 31, 1997 Parkway Dissolution October 31, 1997
---------------- ------------ -------------- ----------------
<S> <C> <C> <C> <C>
Assets
------
Real estate held for sale, at cost $6,041,334 $(6,041,334) $ - $ -
Cash and cash equivalents, at cost
which approximates market value 1,010,289 2,337,622 (3,347,911) -
Accounts receivable and other assets - -
net of allowances $109,824 64,500 (64,500) - -
---------- ----------- ----------- ---
$7,116,123 $(3,768,212) $(3,347,911) $ -
========== =========== =========== ===
</TABLE>
Liabilities and Partners' Capital
- ---------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Mortgage payable $5,677,453 $(5,677,453) - $ -
Payable to managing general partner 129,836 - (114,146) -
(15,690)
Accounts payable and accrued liabilities 30,854 (30,854) - -
Property taxes payable 54,974 (54,974) - -
Other liabilities 21,597 (21,597) - -
---------- ----------- ----------- ---
Total Liabilities 5,914,714 (5,784,878) (129,836) -
---------- ----------- ----------- ---
Partners' Capital:
General partners (35,857) 20,167 15,690 -
Limited partners 1,237,266 1,996,499 (3,233,765) -
---------- ----------- ----------- ---
Total partners' capital 1,201,409 2,016,666 (3,218,075) -
---------- ----------- ----------- ---
$7,116,123 $(3,768,212) $(3,347,911) $ -
========== =========== =========== ===
</TABLE>
See accompanying notes to proforma financial statements.
E-99.1
<PAGE>
BOETTCHER PENSION INVESTORS, LTD.
(A Limited Partnership)
Proforma Statement of Operations
For the year ended October 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma Adjustments
---------------------
Historical Proforma
Year Ended Sale of Parkway, Year Ended
October 31, 1997 Liquidation & Dissolution October 31, 1997
--------------------- -------------------------- ----------------
<S> <C> <C> <C>
Revenue:
Rental income $ 967,204 $ (967,204) $ -
Tenant reimbursements for common
area charges, insurance and taxes 167,347 (167,347) -
Interest income 36,857 (36,857) -
---------- ----------- ---
1,171,408 (1,171,408) -
---------- ----------- ---
Expenses:
Interest 498,187 (498,187) -
Property taxes 61,711 (61,711) -
Fees and reimbursements to
managing general partner 25,963 (25,963) -
Other management fees 44,176 (44,176) -
Repairs and maintenance 69,541 (69,541) -
Utilities 21,558 (21,558) -
General and administrative 74,020 (74,020) -
Environmental 33,935 (33,935) -
---------- ----------- ---
829,091 (829,091) -
---------- ----------- ---
Net earnings (loss) $ 342,317 $ (342,317) $ -
========== =========== ===
Net earnings per limited partnership unit
using the weighted average number of
limited partnership units outstanding
of 10,717 $ 31.94 $ (31.94) $ -
========== =========== ===
</TABLE>
See accompanying notes to proforma financial statements.
E-99.1
<PAGE>
BOETTCHER PENSION INVESTORS, LTD.
(A Limited Partnership)
NOTES TO UNAUDITED PROFORMA FINANCIAL INFORMATION
1) The unaudited proforma balance sheet assumes that the Partnership had sold
Parkway Village Shopping Center ("Parkway") for $8,500,000 and liquidated and
dissolved the Partnership as of October 31, 1997. The unaudited proforma
statement of operations restate the historical operations of the Partnership
for the year ended October 31,1997 by eliminating in total the operating
results of the Partnership. All of the unaudited proforma financial
information is based on amounts as of October 31,1997. Final results may
differ from such information as a result of known and unknown contingencies
(including, without limitation, Partnership operations subsequent to October
31,1997, customary closing adjustments, and potential additional for
environmental remediation expenses).
2) The estimated gain recognized from the sale of Parkway and estimated
distribution of available funds in liquidation of the Partnership to Limited
Partners as of October 31,1997 has been computed as follows:
<TABLE>
<CAPTION>
Gain on sale of real estate investment:
- ---------------------------------------
<S> <C>
Total contract sale price $ 8,500,000
Less: Net book value of real estate investment (6,041,334)
Selling commission (302,500)
Other expenses of sale (primarily legal fees
and title insurance) (75,000)
-----------
Gain on sale 2,081,166
Write off of non-cash assets (64,500)
-----------
Net gain on sale 2,016,666
Estimated expenses of liquidation and dissolution (15,000)
-----------
Net gain on sale and dissolution $ 2,001,666
===========
Estimated distribution to Partners:
-----------------------------------
Total contract sale price $ 8,500,000
Selling commission (302,500)
Other expenses of sale (primarily legal fees and title insurance) (75,000)
Less: Current liabilities of Parkway (including mortgages payable) (5,784,878)
-----------
Adjusted cash received 2,337,622
Add: Current liquid assets of the Partnership 1,010,289
Less: Outstanding debt to Managing General Partner (114,146)
Estimated expenses of liquidation and dissolution (15,000)
-----------
Estimated cash available for final distribution $ 3,218,765
===========
Estimated distribution to Limited
Partners per $1,000 unit $ 300.34
===========
</TABLE>
E-99.1
