SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 1995
Commission File Number 0-15680
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Massachusetts 04-2921566
(State or other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
200 Berkeley Street, Boston, MA 02117
(Address of Principal Executive Office) (Zip Code)
(800) 722-5457
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal
year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES X NO
<PAGE>
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
INDEX
PART I: FINANCIAL INFORMATION PAGE
Item 1 - Financial Statements:
Balance Sheets at March 31, 1995 and
December 31, 1994 3
Statements of Operations for the Three
Months Ended March 31, 1995 and 1994 4
Statements of Partners' Equity for the
Three Months Ended March 31, 1995 and
for the Year Ended December 31, 1994 5
Statements of Cash Flows for the Three
Months Ended March 31, 1995 and 1994 6
Notes to Financial Statements 7-11
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 12-16
PART II: OTHER INFORMATION 17
2
<PAGE>
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
BALANCE SHEETS
(Unaudited)
ASSETS
March 31, December 31,
1995 1994
---- ----
Current assets:
Cash and cash equivalents $3,232,697 $3,124,999
Restricted cash 22,457 22,457
Other current assets 144,498 68,354
----------- -----------
Total current assets 3,399,652 3,215,810
Investment in property:
Land 8,934,077 8,934,077
Buildings and improvements 29,174,904 29,174,904
----------- -----------
38,108,981 38,108,981
Less: accumulated depreciation (7,691,410) (7,453,459)
----------- -----------
30,417,571 30,655,522
Long-term restricted cash 22,166 22,166
Deferred expenses, net of accumulated
amortization of $706,283 in 1995 and
$673,932 in 1994 478,577 431,741
----------- -----------
Total assets $34,317,966 $34,325,239
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $370,316 $251,976
Accounts payable to affiliates 57,817 47,965
----------- -----------
Total current liabilities 428,133 299,941
Partners' equity/(deficit):
General Partner (194,363) (193,008)
Limited Partners 34,084,196 34,218,306
----------- -----------
Total partners' equity 33,889,833 34,025,298
----------- -----------
Total liabilities and partners' equity $34,317,966 $34,325,239
=========== ===========
See Notes to Financial Statements
3
<PAGE>
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
1995 1994
---- ----
Income:
Rental income $831,352 $961,645
Interest income 41,216 18,588
--------- ---------
Total income 872,568 980,233
Expenses:
Depreciation 237,951 243,180
Property operating expenses 78,724 79,879
General and administrative 59,443 47,481
Amortization of deferred expenses 32,351 38,008
Management fee 20,985 20,250
--------- ---------
Total expenses 429,454 428,798
--------- ---------
Net income $443,114 $551,435
========= =========
Allocation of net income:
General Partner $4,431 $5,514
John Hancock Limited Partner (19,477) (19,477)
Investors 458,160 565,398
--------- ---------
$443,114 $551,435
========= =========
Net income per Unit $5.00 $6.17
========= =========
See Notes to Financial Statements
4
<PAGE>
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
(Unaudited)
Three Months Ended March 31, 1995 and
Year Ended December 31, 1994
General Limited
Partner Partners Total
------- -------- -----
Partners' equity/(deficit) at
January 1, 1994
(91,647 Units outstanding) ($184,837) $35,027,232 $34,842,395
Less: Cash distributions (23,143) (2,291,175) (2,314,318)
Add: Net income 14,972 1,482,249 1,497,221
-------- ----------- -----------
Partners' equity/(deficit) at
December 31, 1994
(91,647 Units outstanding) (193,008) 34,218,306 34,025,298
Less: Cash distributions (5,786) (572,793) (578,579)
Add: Net income 4,431 438,683 443,114
-------- ----------- -----------
Partners' equity/(deficit) at
March 31, 1995
(91,647 Units outstanding) ($194,363) $34,084,196 $33,889,833
======== =========== ===========
See Notes to Financial Statements
5
<PAGE>
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
1995 1994
---- ----
Operating activities:
Net income $443,114 $551,435
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of deferred expenses 32,351 38,008
Depreciation 237,951 243,180
---------- ----------
713,416 832,623
Changes in operating assets and liabilities:
Decrease in restricted cash - 500
Increase in other current assets (76,144) (66,665)
Increase in accounts payable and
accrued expenses 118,340 53,399
Increase/(decrease) in accounts payable
to affiliates 9,852 (2,526)
---------- ----------
Net cash provided by operating activities 765,464 817,331
Investing activities:
Increase in deferred expenses (79,187) (3,893)
---------- ----------
Net cash used in investing activities (79,187) (3,893)
Financing activities:
Cash distributed to Partners (578,579) (578,579)
---------- ----------
Net cash used in financing activities (578,579) (578,579)
---------- ----------
Net increase in cash and cash
equivalents 107,698 234,859
Cash and cash equivalents at
beginning of year 3,124,999 2,359,803
---------- ----------
Cash and cash equivalents at
end of period $3,232,697 $2,594,662
========== ==========
See Notes to Financial Statements
6
<PAGE>
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Organization of Partnership
---------------------------
John Hancock Realty Income Fund Limited Partnership (the
"Partnership") was formed under the Massachusetts Uniform Limited
Partnership Act on June 12, 1986. As of March 31, 1995, the
Partnership consisted of John Hancock Realty Equities, Inc. (the
"General Partner"), a wholly-owned, indirect subsidiary of John
Hancock Mutual Life Insurance Company; John Hancock Realty Funding,
Inc. (the "John Hancock Limited Partner"); and 4,227 Investor Limited
Partners (the "Investors"), owning 91,647 Units of Investor Limited
Partnership Interests (the "Units"). The John Hancock Limited Partner
and the Investors are collectively referred to as the Limited
Partners. The initial capital of the Partnership was $2,000,
representing capital contributions of $1,000 from the General Partner
and $1,000 from the John Hancock Limited Partner. The Amended
Agreement of Limited Partnership of the Partnership (the "Partnership
Agreement") authorized the issuance of up to 100,000 Units of Limited
Partnership Interests at $500 per unit. During the offering period,
which terminated on September 9, 1987, 91,647 Units were sold and the
John Hancock Limited Partner made additional capital contributions of
$7,330,760. There have been no changes in the number of Units
outstanding subsequent to the termination of the offering period. The
Partnership is engaged in the business of acquiring, improving,
operating, holding for investment and disposing of existing, income-
producing, commercial and industrial properties on an all-cash basis,
free and clear of mortgage indebtedness. Although the Partnership's
properties were acquired and are held free and clear of mortgage
indebtedness, the Partnership may incur mortgage indebtedness on its
properties under certain circumstances, as described in the
Partnership Agreement.
The latest date on which the Partnership is due to terminate is
December 31, 2016, unless it is sooner terminated in accordance with
the terms of the Partnership Agreement. It is expected that in the
ordinary course of the Partnership's business, the properties of the
Partnership will be disposed of, and the Partnership terminated,
before December 31, 2016.
2. Significant Accounting Policies
-------------------------------
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the three month period ended March 31, 1995 are
not necessarily indicative of the results that may be expected for the
year ending December 31, 1995. For further information, refer to the
financial statements and footnotes thereto included in the
Partnership's Annual Report on Form 10-K for the year ended December
31, 1994.
7
<PAGE>
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
2. Significant Accounting Policies (continued)
-------------------------------------------
Cash equivalents are highly liquid investments with maturities of
three months or less when purchased. These investments are recorded
at cost plus accrued interest, which approximates market value.
Restricted cash represents funds restricted for tenant security
deposits and other escrows, and has been designated as short or long-
term, based upon the term of the related lease agreement.
Investments in property are recorded at cost less any property write-
downs for permanent impairment in values. Cost includes the initial
purchase price of the property plus acquisition and legal fees, other
miscellaneous acquisition costs, and the cost of significant
improvements.
Depreciation has been provided on a straight-line basis over the
estimated useful lives of the various assets: thirty years for the
buildings and five years for related improvements. Maintenance and
repairs are charged to operations as incurred.
Deferred expenses relating to tenant improvements and lease
commissions are amortized on a straight-line basis over the various
lease terms. During 1993, the Partnership reduced the period over
which its remaining deferred acquisition fees are amortized from
thirty years, the estimated useful life of the buildings owned by the
Partnership, to four and one-half years, the then estimated remaining
life of the Partnership.
The net income per Unit for the periods hereof are computed by
dividing the Investors' share of net income by the number of Units
outstanding at the end of such period.
No provision for income taxes has been made in the financial
statements as such taxes are the responsibility of the individual
partners and not of the Partnership.
3. The Partnership Agreement
-------------------------
Distributable Cash from Operations (as defined in the Partnership
Agreement) is distributed 99% to the Limited Partners and 1% to the
General Partner. The Limited Partners' share of Distributable Cash
from Operations is distributed as follows: first, to the Investors
until they receive a 7% non-cumulative, non-compounded annual cash
return on their Invested Capital (as defined in the Partnership
Agreement); second, to the John Hancock Limited Partner until it
receives a 7% non-cumulative, non-compounded annual cash return on its
Invested Capital; and third, to the Investors and the John Hancock
Limited Partner in proportion to their respective Capital
Contributions (as defined in the Partnership Agreement). However, any
Distributable Cash from Operations which is available as a result of
the reduction of working capital reserves funded by Capital
Contributions of the Investors is distributed 100% to the Investors.
8
<PAGE>
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
3. The Partnership Agreement (continued)
-------------------------------------
Profits for tax purposes from the normal operations of the Partnership
for each fiscal year are allocated to the Limited Partners and General
Partner in the same amounts as Distributable Cash from Operations for
that year. If such profits are less than Distributable Cash from
Operations for any year, they are allocated in proportion to the
amounts of Distributable Cash from Operations for that year. If such
profits are greater than Distributable Cash from Operations for any
year, they are allocated 99% to the Limited Partners and 1% to the
General Partner, with the allocation made between the John Hancock
Limited Partner and the Investors in proportion to their respective
Capital Contributions. Losses for tax purposes from the normal
operations of the Partnership are allocated 99% to the Limited
Partners and 1% to the General Partner, with the allocation made
between the John Hancock Limited Partner and the Investors in
proportion to their respective Capital Contributions. However, tax
deductions arising from the Initial Expenses (as defined in the
Partnership Agreement) which are paid by the Partnership from the
Capital Contributions made by the John Hancock Limited Partner and all
other tax aspects of the Partnership's payment of the Initial Expenses
(as defined in the Partnership Agreement) are allocated 1% to the
General Partner and 99% to the John Hancock Limited Partner, and not
to the Investors. Depreciation deductions are allocated 1% to the
General Partner and 99% to the Investors, and not to the John Hancock
Limited Partner.
4. Investment in Property
----------------------
Investment in property at cost and reduced by write-downs consists of
managed, fully-operating, commercial real estate as follows:
<TABLE>
<CAPTION>
March 31, 1995 December 31, 1994
-------------- -----------------
<S> <C> <C>
1300 North Dutton Avenue Office Complex $2,835,779 $2,835,779
Marlboro Square Shopping Center 3,183,643 3,183,643
Crossroads Square Shopping Center 12,266,920 12,266,920
Carnegie Center Office/Warehouse 6,844,991 6,844,991
Warner Plaza Shopping Center 6,473,889 6,473,889
J.C. Penney Credit Operations Center 6,503,759 6,503,759
----------- -----------
Total $38,108,981 $38,108,981
=========== ===========
</TABLE>
The net realizable value of a real estate investment held for long-
term investment purposes is measured by the recoverability of the
investment through expected future cash flows on an undiscounted
basis, which may exceed the related property's current market value.
9
<PAGE>
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
5. Deferred Expenses
-----------------
<TABLE>
<CAPTION>
Deferred expenses consist of the following:
Unamortized Unamortized
Balance at Balance at
March 31, 1995 December 31, 1994
-------------- -----------------
<S> <C> <C>
$114,494 of acquisition fees paid to the General
Partner. This amount was amortized over a period
of thirty years prior to June 30, 1993. Subsequent
to June 30, 1993, the unamortized balance is
amortized over a period of fifty-four months $58,891 $64,244
$686,359 of tenant improvements. These amounts
are amortized over the terms of the leases to which
they relate. 221,267 235,367
$384,007 of lease commissions. These amounts
are amortized over the terms of the leases to which
they relate. 141,779 132,130
-------- --------
$421,937 $431,741
======== ========
</TABLE>
6. Transactions with the General Partner and Affiliates
----------------------------------------------------
Fees and expenses incurred or paid by the General Partner or its
affiliates and to which the General Partner or its affiliates are
entitled to reimbursement from the Partnership were as follows:
Three Months Ended
March 31,
1995 1994
---- ----
Reimbursement for operating expenses $36,832 $28,352
Partnership management fee expense 20,985 20,250
------- -------
$57,817 $48,602
======= =======
These expenses are included in expenses on the Statements of
Operations.
Accounts payable to affiliates represents amounts due to the General
Partner or its affiliates for various services provided to the
Partnership.
The General Partner serves in a similar capacity for three other
affiliated real estate limited partnerships.
10
<PAGE>
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
7. Federal Income Taxes
--------------------
A reconciliation of the net income reported in the Statements of
Operations to the net income reported for federal income tax purposes
is as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1995 1994
---- ----
<S> <C> <C>
Net income per Statements of Operations $443,114 $551,435
Add/(deduct): Excess of tax depreciation
over book depreciation (12,134) (5,787)
Excess of book amortization
over tax amortization 14,005 30,524
-------- --------
Net income for federal income tax purposes $444,985 $576,172
======== ========
</TABLE>
11
<PAGE>
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
- -------
During the offering period from September 9, 1986 to September 9, 1987, the
Partnership sold 91,647 Units representing gross proceeds (exclusive of the
John Hancock Limited Partner's contribution which was used to pay sales
commissions, acquisition fees and organizational and offering expenses) of
$45,823,500. The proceeds of the offering were used to acquire investment
properties and fund reserves. These properties are described more fully in
Note 4 to the Financial Statements included in Item 1 of this Report.
Liquidity and Capital Resources
- -------------------------------
At March 31, 1995, the Partnership had $3,232,697 in cash and cash
equivalents, $22,457 in restricted cash and $22,166 in long-term restricted
cash.
The Partnership has established a working capital reserve with a current
balance of approximately 5% of the offering proceeds. Liquidity would,
however, be materially adversely affected by a significant reduction in
revenues, unanticipated operating costs or unanticipated capital
expenditures. If any or all of these events were to occur, to the extent
that working capital reserves would be insufficient to satisfy the cash
requirements of the Partnership, it is anticipated that additional funds
would be obtained through a further reduction of cash distributions to
Investors, bank loans, short-term loans from the General Partner or its
affiliates, or the sale or financing of Partnership properties.
During the three months ended March 31, 1995, cash from working capital
reserves was used for the payment of leasing costs in the amount of $79,187
incurred at the Carnegie Center and Warner Plaza properties. The General
Partner estimates that the Partnership will incur approximately $870,000 of
additional leasing costs at its properties during the remainder of 1995.
Of this amount, approximately $407,000 and $254,000 are expected to be
incurred at the Carnegie Center and 1300 North Dutton Avenue properties,
respectively, in connection with the Partnership's efforts to secure new
tenants at these properties. The General Partner anticipates that the
current balance in the working capital reserve will be sufficient to pay
such costs.
During 1994 a tenant that occupied 45% of the Carnegie Center property did
not renew its leases upon their expiration and, as a result, the property's
occupancy declined to 35%. For the year ended December 31, 1994, the
leases held by the former tenant mentioned above represented 9% of the
rental income earned by the Partnership. During the first quarter of 1995
a new tenant executed a lease for 14,375 square feet of space, or 11% of
the property, for a three year term which commenced in March 1995. The
Partnership incurred approximately $76,000 in leasing costs during 1995 in
connection with this lease.
The Carnegie Center property was 46% occupied at March 31, 1995. The
General Partner is actively seeking tenants for the remaining vacant space.
Should additional tenants not be located to take occupancy in the near
future, the Partnership's liquidity would be materially adversely affected.
Rental rates and concessions are priced competitively in order to secure
new tenants for the property.
12
<PAGE>
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Liquidity and Capital Resources (continued)
- -------------------------------------------
The tenant that leased all of the rentable space at the 1300 North Dutton
Avenue property notified the Partnership during 1994 that it would not
renew its lease upon its expiration on January 31, 1995. The General
Partner has been actively seeking a replacement tenant for the property.
Should a replacement tenant not be located to take occupancy of the
property before the end of 1995, the Partnership's liquidity would be
adversely affected. For the year ended December 31, 1994, the 1300 North
Dutton Avenue property generated approximately 11% of the rental income
earned by the Partnership.
During the first quarter of 1995, J.C. Penney extended its lease at the
J.C. Penney Credit Operations Center through June 2006. The tenant was
granted an option to terminate the lease during the year 2001 upon the
payment of $710,325. The Partnership did not incur any leasing costs in
connection with this lease extension.
During the three months ended March 31, 1995, approximately $7,900 of cash
from operations was used to fund non-recurring maintenance and repair costs
incurred at the Partnership's properties. The General Partner estimates
that the Partnership will incur additional non-recurring repair and
maintenance costs of approximately $113,000 at its properties during the
remainder of 1995. These additional costs will be funded from the
operations of the Partnership's properties and are not expected to have a
significant impact on the Partnership's liquidity.
Cash in the amount of $578,579 generated from the Partnership's operations,
was distributed to the General Partner and the Limited Partners during the
first quarter of 1995. The General Partner currently anticipates that the
Partnership will be able to make comparable distributions during each of
the three remaining quarters of 1995.
The General Partner evaluated the carrying value of the Carnegie Center
property during the third quarter of 1994 by comparing it to future
undiscounted cash flows and a recent internal appraisal in order to
determine whether a permanent impairment in value existed. Based on such
evaluation, the General Partner determined that a write-down of $512,000
was required at that time to reflect the estimated permanent impairment in
the value of the Carnegie Center property. Lower rental rates and weak
absorption for available office/industrial properties in Cincinnati, Ohio,
in general, have resulted in a decline in this property's market value.
The carrying value of the Carnegie Center property at December 31, 1994 was
evaluated in comparison to the estimated future cash flows and a recent
internal appraisal and, based upon such evaluation, the General Partner
determined that no further permanent impairment in value existed and,
therefore, an additional write-down in value was not required as of
December 31, 1994.
The General Partner also evaluated the carrying value of each of the
Partnership's other properties as of December 31, 1994 by comparing such
value to the respective property's future undiscounted cash flows and the
most recent independent or internal appraisals. Based on such evaluations,
the General Partner determined that no permanent impairment in values
existed with respect to these properties and no additional write-downs were
recorded as of December 31, 1994. The General Partner will continue to
conduct property valuations, using internal or independent appraisals, in
order to determine whether a permanent impairment in value exists on any of
the Partnership's properties.
13
<PAGE>
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Results of Operations
- ---------------------
Net income for the three months ended March 31, 1995 was $443,114, as
compared to net income of $551,435 for the same period in 1994. This
$108,321 decrease in net income is primarily due to declines in the
performance of the Carnegie Center and 1300 North Dutton Avenue properties
which were partially offset by increases in the performance of the
Crossroads Square and Warner Plaza properties.
Average occupancy for the Partnership's properties for the three months
ended March 31, 1995 was as follows:
1300 North Dutton Avenue Office Complex 33%
Marlboro Square Shopping Center 75%
Crossroads Square Shopping Center 97%
Carnegie Center Office/Warehouse 39%
Warner Plaza Shopping Center 98%
J.C. Penney Credit Operations Center 100%
Rental income for the three months ended March 31, 1995 decreased by
$130,293, or 14%, as compared to the same period in 1994. This decrease is
primarily due to decreases in rental income at the 1300 North Dutton Avenue
and Carnegie Center properties which were partially offset by increases in
rental income at the Crossroads Square and Warner Plaza properties. Rental
income at the 1300 North Dutton Avenue property decreased by 65% during the
three months ended March 31, 1995 as compared to the same period in 1994
due to the expiration on January 31, 1995 of the lease held by the sole
tenant at the property. Rental income at the Carnegie Center property
decreased by 75% during the three months ended March 31, 1995 as compared
to the same period in 1994 due to a decrease in average occupancy from 80%
to 39% between periods. These decreases in rental income were partially
offset by increases in rental income at the Crossroads Square and Warner
Plaza properties of 10% and 11%, respectively. These increases were
primarily due to increases in average occupancy at these properties between
periods. Rental income at the Marlboro Square and J.C. Penney properties
was consistent between periods.
Interest income for the three months ended March 31, 1995 increased by
$22,628, or 122%, as compared to the same period in 1994. This increase is
primarily due to an increase in the interest rates earned on the
Partnership's working capital reserves as well as an increase in the amount
of such reserves.
General and administrative expenses for the three months ended March 31,
1995 increased by $11,962, or 25%, as compared to the same period in 1994.
This increase is primarily due to legal fees incurred in connection with
the new leases entered into at two of the Partnership's properties during
the first quarter of 1995 and an increase in postage charges on investor
mailings resulting from the increase in postal rates.
Amortization of deferred expenses for the three months ended March 31, 1995
decreased by $5,657, or 15%, as compared to the same period in 1994. This
decrease is primarily due to the expiration of certain leases at the 1300
North Dutton Avenue, Carnegie Center and Marlboro Square properties and the
full amortization of the related deferred leasing costs.
14
<PAGE>
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Results of Operations (continued)
- ---------------------------------
The General Partner believes that inflation has had no significant impact
on the Partnership's operations during the three months ended March 31,
1995, and the General Partner anticipates that inflation will not have a
significant impact during the remainder of 1995.
Cash Flow
- ---------
The following table provides the calculations of Cash from Operations and
Distributable Cash from Operations which are calculated in accordance with
Section 17 of the Partnership Agreement:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1995 1994
---- ----
<S> <C> <C>
Net cash provided by operating activities (a) $765,464 $817,331
Net change in operating assets and liabilities (a) (52,048) (15,292)
-------- --------
Cash provided by operations (a) 713,416 832,623
Increase in working capital reserves (135,572) (254,044)
Add: Accrual basis Partnership
management fee 20,985 20,250
-------- --------
Cash from operations (b) 598,829 598,829
Decrease in working capital reserves - -
Less: Accrual basis Partnership
management fee (20,985) (20,250)
-------- --------
Distributable cash from operations (b) $578,579 $578,579
======== ========
Allocation to General Partner $5,786 $5,786
Allocation to John Hancock Limited Partner - -
Allocation to Investors 572,793 572,793
-------- --------
Distributable cash from operations (b) $578,579 $578,579
======== ========
</TABLE>
(a) Net cash provided by operating activities, net change in operating
assets and liabilities, and cash provided by operations are as
calculated in the Statements of Cash Flows included in Item 1 of this
Report.
(b) As defined in the Partnership Agreement. Distributable Cash from
Operations should not be considered as an alternative to net income
(i.e. not an indicator of performance) or to reflect cash flows or
availability of discretionary funds.
15
<PAGE>
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Cash Flow (continued)
- ---------------------
During the second quarter of 1995, the Partnership expects to make a cash
distribution of $572,793, representing a 5% annualized return, to all
Investors of record at March 31, 1995, based on Distributable Cash from
Operations for the quarter then ended. The General Partner anticipates
that the Partnership will make comparable cash distributions during each of
the remaining three quarters of 1995.
16
<PAGE>
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings, other than
ordinary routine litigation incidental to the business of the
Partnership, to which the Partnership is a party or to which any
of its properties are subject.
Item 2. Changes in Securities
There were no changes in securities during the first quarter of
1995.
Item 3. Defaults Upon Senior Securities
There were no defaults upon senior securities during the first
quarter of 1995.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders of
the Partnership the first quarter of 1995.
Item 5. Other information
Item 6. Exhibits and Reports on Form 8-K
(a) There are no exhibits to this report.
(b) There were no Reports on Form 8-K filed during the first
quarter of 1995.
17
<PAGE>
JOHN HANCOCK REALTY INCOME FUND LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
Signatures
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized, on the 12th day of May, 1995.
John Hancock Realty Income Fund
Limited Partnership
By: John Hancock Realty Equities, Inc.,
General Partner
By: WILLIAM M. FITZGERALD
--------------------------------
William M. Fitzgerald, President
By: RICHARD E. FRANK
--------------------------------
Richard E. Frank, Treasurer
(Chief Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000795196
<NAME> JOHN HANCOCK REALTY INCOME FUND, LP
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 3,277,320
<SECURITIES> 0
<RECEIVABLES> 144,498
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,399,652
<PP&E> 38,108,981
<DEPRECIATION> 7,691,410
<TOTAL-ASSETS> 34,317,966
<CURRENT-LIABILITIES> 428,133
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 33,889,833
<TOTAL-LIABILITY-AND-EQUITY> 34,317,966
<SALES> 0
<TOTAL-REVENUES> 872,568
<CGS> 0
<TOTAL-COSTS> 78,724
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 443,114
<INCOME-TAX> 0
<INCOME-CONTINUING> 443,114
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 443,114
<EPS-PRIMARY> 5
<EPS-DILUTED> 5
</TABLE>
