SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 2000
_______________________________________
Commission Registrant; State of Organization; IRS Employer
File No. Address and Telephone Number Identification No.
---------- ---------------------------------- ------------------
1-14507 Boston Celtics Limited Partnership 04-3416346
(a Delaware limited partnership)
151 Merrimac Street, Boston, Massachusetts 02114
(617) 523-6050
1-9324 Boston Celtics Limited Partnership II 04-2936516
(a Delaware limited partnership)
151 Merrimac Street, Boston, Massachusetts 02114
(617) 523-6050
Indicate by checkmark whether the registrant (1) has filed reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
As of September 30, 2000, there were 2,703,664 Units outstanding of Boston
Celtics Limited Partnership, and 2,703,664 units representing limited
partnership interests outstanding of Boston Celtics Limited Partnership II.
Part I - Financial Information
Item I - Financial Statements
BOSTON CELTICS LIMITED PARTNERSHIP
and Subsidiaries
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, June 30,
2000 2000
------------- --------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 6,107,180 $ 3,393,509
Other short-term investments 84,340,000 83,100,000
Prepaid expenses and other current assets 914,095 530,771
----------------------------
TOTAL CURRENT ASSETS 91,361,275 87,024,280
PROPERTY AND EQUIPMENT, net 10,653 11,734
OTHER ASSETS 1,014,788 1,053,843
----------------------------
$92,386,716 $88,089,857
============================
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES
Accounts payable and other current
liabilities $ 899,278 $ 611,360
Accrued interest 1,943,213
Federal and state income taxes payable 867,350 877,350
Notes payable to bank - current portion 10,000,000 10,000,000
----------------------------
TOTAL CURRENT LIABILITIES 13,709,841 11,488,710
DEFERRED FEDERAL AND STATE INCOME TAXES 9,710,875 9,710,875
NOTES PAYABLE TO BANK - noncurrent portion 50,000,000 50,000,000
SUBORDINATED DEBENTURES 33,894,379 33,789,695
INVESTMENT IN CAPITAL DEFICIENCY OF CELTICS
BASKETBALL HOLDINGS, L.P. 34,676,953 29,437,209
PARTNERS' CAPITAL (DEFICIT)
Boston Celtics Limited Partnership -
General Partner 124,481 156,332
Limited Partners (50,634,629) (47,481,412)
----------------------------
(50,510,148) (47,325,080)
Boston Celtics Limited Partnership II -
General Partner 51,153 79,705
Celtics Limited Partnership - General Partner 214,592 266,789
Boston Celtics Communications Limited
Partnership - General Partner 639,071 641,954
----------------------------
TOTAL PARTNERS' CAPITAL (DEFICIT) (49,605,332) (46,336,632)
----------------------------
$92,386,716 $88,089,857
============================
</TABLE>
See notes to condensed consolidated financial statements.
BOSTON CELTICS LIMITED PARTNERSHIP
and Subsidiaries
Condensed Consolidated Statements of Operations
Unaudited
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------
September 30, September 30,
2000 1999
------------- -------------
<S> <C> <C>
Costs and expenses:
General and administrative $ (997,320) $ (830,660)
Depreciation and amortization (13,688) (14,052)
------------------------------
(1,011,008) (844,712)
Equity in net loss of Celtics Basketball
Holdings, L.P. (1,374,797) (1,418,281)
Interest expense (2,074,080) (1,682,581)
Interest income 1,530,166 1,164,927
------------------------------
Loss before income taxes (2,929,719) (2,780,647)
Provision for income taxes 300,000 400,000
------------------------------
Net loss (3,229,719) (3,180,647)
Net loss applicable to interests of General
Partners (76,502) (71,642)
------------------------------
Net loss applicable to interests of Limited
Partners $(3,153,217) $(3,109,005)
==============================
Net loss per unit $ (1.17) $ (1.15)
</TABLE>
See notes to condensed consolidated financial statements.
BOSTON CELTICS LIMITED PARTNERSHIP
and Subsidiaries
Condensed Consolidated Statements of Cash Flows
Unaudited
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------
September 30, September 30,
2000 1999
------------- -------------
<S> <C> <C>
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
General and administrative expenses $ (894,073) $ (969,287)
Interest expense (770,708)
Interest income 1,339,570 1,147,719
Income taxes paid (310,000) (500,000)
---------------------------------
NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES 135,497 (1,092,276)
---------------------------------
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchases of short-term investments (177,440,000) (179,400,000)
Proceeds from sales of short-term investments 176,200,000 178,800,000
Capital expenditures (829)
Other receipts (expenditures) 1,922 3,748
---------------------------------
NET CASH FLOWS USED IN INVESTING ACTIVITIES (1,238,907) (596,252)
---------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank borrowings 1,500,000
Cash distribution from Celtics Basketball Holdings, L.P. 3,864,947
Cash distribution by Celtics Limited Partnership to
Boston Celtics Corporation (General Partner's share) (38,449)
Cash distribution by Boston Celtics Limited
Partnership II to BCLP II GP, Inc. (General Partner's
share) (9,417)
---------------------------------
NET CASH FLOWS FROM FINANCING ACTIVITIES 3,817,081 1,500,000
---------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,713,671 (188,528)
Cash and cash equivalents at beginning of period 3,393,509 2,607,725
---------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,107,180 $ 2,419,197
=================================
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Amortization of original issue discount on
Subordinated Debentures $ 104,684 $ 100,774
</TABLE>
See notes to condensed consolidated financial statements.
BOSTON CELTICS LIMITED PARTNERSHIP
and Subsidiaries
Notes to Condensed Consolidated Financial Statements
Note 1 - The condensed consolidated financial statements include the
accounts of Boston Celtics Limited Partnership ("BCLP," the "Partnership")
and its majority-owned and controlled subsidiaries and partnerships.
BCLP is a Delaware limited partnership that was formed on April 13, 1998 in
connection with a reorganization of Boston Celtics Limited Partnership II
("BCLP II"). Pursuant to the reorganization of BCLP II (the
"Reorganization"), which was completed on June 30, 1998, BCLP owns a 99%
limited partnership interest in BCLP II. In addition, BCLP, through its
subsidiaries, holds certain investments, including a 48.3123% limited
partnership investment in Celtics Basketball Holdings, L.P., ("Celtics
Basketball Holdings") which, through Celtics Basketball, L.P. ("Celtics
Basketball"), its 99.999% subsidiary partnership, owns and operates the
Boston Celtics professional basketball team (the "Boston Celtics") of the
National Basketball Association (the "NBA"). BCLP's investment in Celtics
Basketball Holdings is accounted for on the equity method, and accordingly,
the investment is carried at cost, effected by equity in income or loss of
Celtics Basketball Holdings and reduced by distributions received.
Note 2 - The unaudited interim condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial statements and with instructions to Form
10-Q and Article 10 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) necessary for a
fair presentation have been included therein. Operating results for interim
periods are not indicative of the results that may be expected for the full
year. Such financial statements should be read in conjunction with the
consolidated financial statements and footnotes thereto of Boston Celtics
Limited Partnership and Subsidiaries included in the annual report on Form
10-K for the year ended June 30, 2000.
Note 3 - BCLP, through its subsidiary partnerships and corporations, owns a
48.3123% limited partnership interest in Celtics Basketball Holdings.
Celtics Basketball Holdings, through Celtics Basketball, owns and operates
the Boston Celtics. BCLP's investment in Celtics Basketball Holdings is
accounted for on the equity method. Summary statement of operations data for
Celtics Basketball Holdings for the three months ended September 30, 2000
and 1999 is as follows:
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------
September 30, September 30,
2000 1999
------------- -------------
<S> <C> <C>
Total costs and expenses $(2,120,919) $(2,078,681)
Interest income (expense), net (724,754) (857,000)
-----------------------------
Net loss $(2,845,673) $(2,935,681)
=============================
</TABLE>
Note 4 - The following table sets forth the computation of loss per unit for
the three months ended September 30, 2000 and 1999:
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------
September 30, September 30,
2000 1999
------------- -------------
<S> <C> <C>
Numerator for loss per unit:
Net loss $(3,229,719) $(3,180,647)
Applicable to interests of General Partners of
subsidiary partnerships (44,651) (40,238)
-----------------------------
(3,185,068) (3,140,409)
Applicable to 1% General Partnership interest of BCLP (31,851) (31,404)
-----------------------------
Applicable to interests of Limited Partners $(3,153,217) $(3,109,005)
=============================
Denominator for loss per unit - weighted average units 2,703,664 2,703,664
=============================
Net loss per unit $ (1.17) $ (1.15)
=============================
</TABLE>
BOSTON CELTICS LIMITED PARTNERSHIP II
and Subsidiaries
Condensed Consolidated Balance Sheets
Unaudited
<TABLE>
<CAPTION>
September 30, June 30,
2000 2000
------------- --------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 6,058,071 $ 3,389,400
Other short-term investments 84,340,000 83,100,000
Due from related parties 382,486 6,323
Prepaid expenses and other current assets 900,497 522,005
----------------------------
TOTAL CURRENT ASSETS 91,681,054 87,017,728
PROPERTY AND EQUIPMENT, net 10,653 11,734
OTHER ASSETS 1,014,788 1,053,843
----------------------------
$92,706,495 $88,083,305
============================
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES
Accounts payable and other current liabilities $ 885,087 $ 607,654
Accrued interest 1,943,213
Federal and state income taxes payable 867,350 877,350
Notes payable to bank - current portion 10,000,000 10,000,000
----------------------------
TOTAL CURRENT LIABILITIES 13,695,650 11,485,004
DEFERRED FEDERAL AND STATE INCOME TAXES 9,710,875 9,710,875
NOTES PAYABLE TO BANK - noncurrent portion 50,000,000 50,000,000
SUBORDINATED DEBENTURES 33,894,379 33,789,695
INVESTMENT IN CAPITAL DEFICIENCY OF CELTICS
BASKETBALL HOLDINGS, L.P. 34,676,953 29,437,209
PARTNERS' CAPITAL (DEFICIT)
Boston Celtics Limited Partnership II -
General Partner 51,153 79,705
Limited Partners (50,176,178) (47,327,926)
----------------------------
(50,125,025) (47,248,221)
Celtics Limited Partnership - General Partner 214,592 266,789
Boston Celtics Communications Limited
Partnership - General Partner 639,071 641,954
----------------------------
TOTAL PARTNERS' CAPITAL (DEFICIT) (49,271,362) (46,339,478)
----------------------------
$92,706,495 $88,083,305
============================
</TABLE>
See notes to condensed consolidated financial statements.
BOSTON CELTICS LIMITED PARTNERSHIP II
and Subsidiaries
Condensed Consolidated Statements of Operations
Unaudited
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------
September 30, September 30,
2000 1999
------------- -------------
<S> <C> <C>
Costs and expenses:
General and administrative $ (609,769) $ (302,203)
Amortization (11,778) (11,778)
------------------------------
(621,547) (313,981)
Equity in net loss of Celtics Basketball
Holdings, L.P. (1,374,797) (1,418,281)
Interest expense (2,074,080) (1,682,581)
Interest income 1,530,166 1,164,927
------------------------------
Loss before income taxes (2,540,258) (2,249,916)
Provision for income taxes 300,000 400,000
------------------------------
Net loss (2,840,258) (2,649,916)
Net loss applicable to interests of General
Partners (44,651) (40,238)
------------------------------
Net loss applicable to interests of Limited
Partner $(2,795,607) $(2,609,678)
==============================
</TABLE>
See notes to condensed consolidated financial statements.
BOSTON CELTICS LIMITED PARTNERSHIP II
and Subsidiaries
Condensed Consolidated Statements of Cash Flows
Unaudited
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------
September 30, September 30,
2000 1999
------------- -------------
<S> <C> <C>
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
General and administrative expenses $ (886,428) $ (967,038)
Interest expense (770,708)
Interest income 1,339,570 1,147,719
Income taxes paid (310,000) (500,000)
---------------------------------
NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES 143,142 (1,090,027)
---------------------------------
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchases of short-term investments (177,440,000) (179,400,000)
Proceeds from sales of short-term investments 176,200,000 178,800,000
Capital expenditures (829)
Other receipts (expenditures) 1,922 3,748
---------------------------------
NET CASH FLOWS USED IN INVESTING ACTIVITIES (1,238,907) (596,252)
---------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank borrowings 1,500,000
Cash distribution from Celtics Basketball Holdings, L.P. 3,864,947
Cash distribution by Celtics Limited Partnership to
Boston Celtics Corporation (General Partner's share) (38,449)
Cash distribution by Boston Celtics Limited
Partnership II to Boston Celtics Limited Partnership (52,645)
Cash distribution by Boston Celtics Limited
Partnership II to BCLP II GP, Inc. (General Partner's
share) (9,417)
---------------------------------
NET CASH FLOWS FROM FINANCING ACTIVITIES 3,764,436 1,500,000
---------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,668,671 (186,279)
Cash and cash equivalents at beginning of period 3,389,400 2,597,546
---------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,058,071 $ 2,411,267
=================================
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Amortization of original issue discount on
Subordinated Debentures $ 104,684 $ 100,774
</TABLE>
See notes to condensed consolidated financial statements.
BOSTON CELTICS LIMITED PARTNERSHIP II
and Subsidiaries
Notes to Condensed Consolidated Financial Statements
Note 1 - The condensed consolidated financial statements include the
accounts of Boston Celtics Limited Partnership II ("BCLP II," the
"Partnership") and its majority-owned and controlled subsidiaries and
partnerships. All intercompany transactions are eliminated in
consolidation.
Pursuant to a reorganization of its partnership structure that was completed
on June 30, 1998 (the "Reorganization"), the Partnership's name was changed
to Boston Celtics Limited Partnership II. As a result of the
Reorganization, the Partnership's 99% limited partnership interest is owned
by Boston Celtics Limited Partnership (a Delaware limited partnership formed
in April 1998).
Prior to the Reorganization, BCLP II, through its subsidiaries, owned and
operated the Boston Celtics professional basketball team (the "Boston
Celtics") of the National Basketball Association (the "NBA") and held
investments. The Boston Celtics were owned by Celtics Limited Partnership
("CLP"), in which BCLP II has a 99% limited partnership interest.
Upon completion of the Reorganization, the Boston Celtics are owned and
operated by Celtics Basketball, L.P. ("Celtics Basketball"), a 99.999%
subsidiary of Celtics Basketball Holdings, L.P. ("Celtics Basketball
Holdings"). BCLP II, through its subsidiaries, holds certain investments,
including a 48.3123% limited partnership investment in Celtics Basketball
Holdings.
Accordingly, effective June 30, 1998, BCLP II's interest in the accounts and
operations of the Boston Celtics is reflected in its investment in Celtics
Basketball Holdings, which is accounted for on the equity method.
Accordingly, the investment is carried at cost, effected by equity in income
or loss of Celtics Basketball Holdings and reduced by distributions
received.
Note 2 - The unaudited interim condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial statements and with instructions to Form
10-Q and Article 10 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) necessary for a
fair presentation have been included therein. Operating results for interim
periods are not indicative of the results that may be expected for the full
year. Such financial statements should be read in conjunction with the
consolidated financial statements and footnotes thereto of Boston Celtics
Limited Partnership II and Subsidiaries included in the annual report on
Form 10-K for the year ended June 30, 2000.
Note 3 - BCLP II, through its subsidiary partnerships and corporations, owns
a 48.3123% limited partnership interest in Celtics Basketball Holdings.
Celtics Basketball Holdings, through Celtics Basketball, owns and operates
the Boston Celtics. BCLP II's investment in Celtics Basketball Holdings is
accounted for on the equity method. Summary statement of operations data for
Celtics Basketball Holdings for the three months ended September 30, 2000
and 1999 is as follows:
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------
September 30, September 30,
2000 1999
------------- -------------
<S> <C> <C>
Total costs and expenses $(2,120,919) $(2,078,681)
Interest income (expense), net (724,754) (857,000)
-----------------------------
Net loss $(2,845,673) $(2,935,681)
=============================
</TABLE>
BOSTON CELTICS LIMITED PARTNERSHIP
BOSTON CELTICS LIMITED PARTNERSHIP II
and Subsidiaries
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Forward Looking Statements
Certain statements and information included herein are "forward-looking
statements" within the meaning of the federal Private Securities Litigation
Reform Act of 1995, including statements relating to prospective game,
broadcast and other revenues, expenses (including player and other team
costs), estimates of future impacts of the player lockout, capital
expenditures, tax burdens, earnings and distributions, and expectations,
intentions and strategies regarding the future. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the
Partnership to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements.
Factors that could cause the Partnership's financial condition, results of
operation, liquidity and capital resources to differ materially include the
competitive success of the Boston Celtics, uncertainties as to increases in
players' salaries, the Boston Celtics' ability to attract and retain
talented players, the risk of injuries to key players, uncertainties
regarding media contracts, the performance of certain investments by
subsidiaries of the Partnership and the extent to which the Partnership's
subsidiaries generate, and are able to distribute, operating cash flow.
General
BCLP accounts for its indirect investment in the accounts and operations of
the Boston Celtics using the equity method, and accordingly, its equity in
the net income (loss) of the Boston Celtics is reported on a single line
item in its Condensed Consolidated Statements of Operations. Following is a
general description of certain matters related to the operations of the
Boston Celtics.
The Boston Celtics derive revenues principally from the sale of tickets to
home games and the licensing of television, cable network and radio rights.
The most significant expenses of the Boston Celtics are player and coaching
salaries. A large portion of the Boston Celtics' annual revenues and
operating expenses is determinable at the commencement of each basketball
season based on season ticket sales and the Boston Celtics' multi-year
contracts with its players, coaches and broadcast organizations.
The operations and financial results of the Boston Celtics are seasonal. On
a cash flow basis, the Boston Celtics receive a substantial portion of their
receipts from the advance sale of season tickets during the months of June
through October, prior to the commencement of the NBA regular season. Cash
receipts from playoff ticket sales are received in March of any year for
which the team qualifies for league playoffs. Most of the Boston Celtics'
operating expenses are incurred and paid during the regular season, which
normally extends from late October or early November through late April.
For financial reporting purposes the Boston Celtics recognize revenues and
expenses on a game-by-game basis. Because the NBA regular season normally
begins in late October or early November, the first fiscal quarter, which
ends on September 30, generally includes limited or no revenue and reflects
a net loss attributable to general and administrative expenses and selling
and promotional expenses incurred in the quarter. Based on the standard NBA
game schedule, the Boston Celtics historically recognize approximately one-
third of its annual regular season revenue in the second fiscal quarter,
approximately one-half of such revenue in the third fiscal quarter and the
remainder in the fourth fiscal quarter, and recognize its playoff revenue,
if any, in the fourth fiscal quarter. Accordingly, BCLP's and BCLP II's
equity in the net income (loss) of Celtics Basketball Holdings, which
indirectly owns and operates the Boston Celtics, will generally result in a
loss in its first fiscal quarter, income in its second and third fiscal
quarters and a loss in its fourth fiscal quarter unless there is significant
income from playoff revenues.
Results of Operations
The following discussion compares the operating results of BCLP and its
subsidiaries for the three months ended September 30, 2000 with the three
months ended September 30, 1999.
General and administrative expenses of $997,000 in the three months ended
September 30, 2000 increased by $166,000 compared to $831,000 in the three
months ended September 30, 1999. The increase in 2000 was primarily
attributable to increased professional expenses.
Equity in net loss of Celtics Basketball Holdings, L.P. represents BCLP's
48.3% interest in the net loss of the entity that indirectly owns and
operates the Boston Celtics. The Boston Celtics recognize revenues and
expenses on a game-by-game basis, and the NBA regular season normally begins
in late October or early November. As a result, Celtics Basketball
Holdings' first fiscal quarter, which ends on September 30, generally
includes limited or no revenue and reflects a net loss attributable to
general and administrative expenses and selling and promotional expenses
incurred in the quarter. BCLP's equity in the net loss of Celtics Basketball
Holdings of $1,375,000 in the three months ended September 30, 2000
decreased by $43,000 compared to $1,418,000 in the three months ended
September 30, 1999. The decrease is primarily a result of decreased
interest expense due to a reduction in borrowings under Celtics Basketball's
revolving credit agreement with its commercial bank in the three months
ended September 30, 2000 as compared to the three months ended September 30,
1999.
Interest expense of $2,074,000 in the three months ended September 30, 2000
increased by $391,000 compared to $1,683,000 in the three months ended
September 30, 1999. The increase is primarily attributable to an increase
in borrowings under BCLP's revolving credit agreement with its commercial
bank combined with the effect of an increase in interest rates on those
borrowings.
Interest income of $1,530,000 in the three months ended September 30, 2000
increased by $365,000 compared to $1,165,000 in the three months ended
September 30, 1999. The increase is primarily as a result of an increase in
interest rates earned on invested balances, combined with an increase in
funds available for investment.
BCLP's provision for income taxes relates to BCLP's subsidiary corporations.
The provision of $300,000 in the three months ended September 30, 2000
decreased by $100,000 compared to $400,000 in the three months ended
September 30, 1999. The decrease is primarily a result of a decrease in
income earned by BCLP's subsidiary corporations.
Liquidity and Capital Resources
BCLP generated approximately $135,000 in cash flows from operating
activities in the three months ended September 30, 2000. At September 30,
2000 the Partnership had approximately $6,107,000 of available cash and
$84,340,000 of other short-term investments. In addition to these amounts,
sources of funds available to the Partnership include funds generated by
operations and distributions from Celtics Basketball Holdings, which through
a subsidiary owns and operates the Boston Celtics. These resources may be
used to repay commercial bank borrowings and for general partnership
purposes, working capital needs or for possible investments and/or
acquisitions.
On May 20, 1998, BCLP II entered into a $60,000,000 revolving credit
agreement with its commercial bank. Interest on advances under the
revolving credit agreement accrues at BCLP II's option of either LIBOR plus
0.70% or the greater of the bank's Base Rate or the Federal Funds Effective
Rate plus 0.50%. The revolving credit agreement expires on June 30, 2003
and is secured by a pledge of certain short-term investments of Celtics
Capital Corporation, an indirect subsidiary of BCLP and BCLP II. At
September 30, 2000, $60,000,000 was outstanding under the revolving credit
agreement, $10,000,000 of which is payable on November 30, 2000 and
$50,000,000 of which is payable upon the maturity of the agreement. As
discussed below, on October 31, 2000, BCLP assumed all of BCLP II's
liability for $50,000,000 of borrowings under this agreement. Management
anticipates that amounts advanced under the revolving credit agreement will
be repaid by BCLP and BCLP II out of cash flows, principally distributions
from its subsidiaries.
BCLP II has outstanding 6% subordinated debentures due on June 30, 2038.
The subordinated debentures were recorded at $12.20 per debenture, the fair
market value at date of issue, or $32,984,700. The original issue discount
of $21,088,580 is being amortized over the 40-year life of the debentures
using the interest method and, accordingly, the subordinated debentures are
carried on the balance sheet at $33,894,379 at September 30, 2000. The
subordinated debentures bear interest at the rate of 6% per annum, payable
annually on June 30, and mature on June 30, 2038 at an aggregate principal
amount of $54,073,280. There is no mandatory redemption or sinking fund
requirements of the subordinated debentures.
In the three months ended September 30, 2000, BCLP and its subsidiaries
received distributions from Celtics Basketball Holdings aggregating
$3,865,000. Future distributions from Celtics Basketball Holdings will be
determined by Boston Celtics Corporation, the general partner of Celtics
Basketball Holdings, in its sole discretion subject to applicable credit
agreements and based, among other things, on available resources and the
needs of Celtics Basketball Holdings and Celtics Basketball, the ability of
Celtics Basketball Holdings and Celtics Basketball to generate sufficient
operating cash flow, and the funds available after debt service payments
related to Celtics Basketball's revolving credit agreement with its
commercial bank.
No cash distributions to unitholders of BCLP were declared or paid during
the three months ended September 30, 2000 and 1999. Future distributions
will be determined by BCLP GP, Inc., the general partner of BCLP, in its
sole discretion based, among other things, on available resources and the
needs of the Partnership, the ability of BCLP's subsidiaries to generate
sufficient operating cash flow, and the funds available after debt service
payments related to the revolving credit agreement with its commercial bank
and the subordinated debentures.
On October 31, 2000, in order to achieve certain efficiencies, BCLP II
distributed to BCLP all of the outstanding capital stock of BCCLP Holding
Corporation ("BCCLP Holdings"), and BCLP assumed all of BCLP II's liability
for borrowings under its revolving credit agreement aggregating $50,000,000.
As a result, BCCLP Holdings currently is a direct subsidiary of BCLP.
Management believes that BCLP's cash, cash equivalents and other short-term
investments together with cash from operating activities and distributions
from Celtics Basketball Holdings will provide adequate cash for the
Partnership and its subsidiaries to meet their cash requirements through
September 30, 2001.
Market Risk
At September 30, 2000, BCLP had invested approximately $84,340,000 in loan
participations issued by a commercial bank with maturities of less than
ninety days. Due to their short maturities and applicable transfer
restrictions, management believes that the loan participations are not
exposed to market risk. Management further believes that the partnership
has no other assets that are subject to market risk.
Part II - Other Information
ITEM 1
In July and August 1998, four separate class action complaints (the
"Complaints") were filed by Unitholders in the Court of Chancery of the
State of Delaware in and for New Castle County against BCLP II, Celtics,
Inc., Paul E. Gaston, Don F. Gaston, Paula B. Gaston, John H.M. Leithead and
John B. Marsh III, each a director or former director of Celtics, Inc. The
named plaintiffs, who each purported to bring their individual actions on
behalf of themselves and others similarly situated, are Kenneth L. Rilander,
Harbor Finance Partners, Maryann Kelly and Kathleen Kruse Perry. Each of
the Complaints alleges, among other things, that the Reorganization was
unfair to former BCLP II Unitholders, and seeks to recover an unspecified
amount of damages, including attorneys' and experts' fees and expenses. The
Partnership filed a Motion to Dismiss the complaint filed by Mr. Rilander on
July 29, 1998, and discovery in that case has been stayed by agreement of
the parties. The Complaints have been consolidated. On August 6, 1999, the
Court of Chancery issued an opinion granting in part, and denying in part,
the Partnership's Motion to Dismiss, and on September 3, 1999, the
plaintiffs filed an amended consolidated Complaint. On October 1, 1999, the
Partnership filed an answer to the Complaint.
Although the ultimate outcome of the Complaint cannot be determined at this
time, management of the Partnership does not believe that the outcome of
these proceedings will have a material adverse effect on the Partnership's
financial position or results of operations.
ITEM 6 - Exhibits and Reports on Form 8-K
(a) Exhibits -
Exhibit (10) - Amended and Restated Credit Agreement dated as of
October 31, 2000 among Boston Celtics Limited Partnership and
Boston Celtics Limited Partnership II as Borrowers, and The
Royal Bank of Scotland, plc, as the Existing Lender, and The
Other Lender Parties Hereto, and Citizens Bank of Massachusetts,
as Agent for the Lenders.
Exhibit (27) - Financial data schedule.
(b) Reports on Form 8-K -
None.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrants have duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
BOSTON CELTICS LIMITED PARTNERSHIP
(Registrant)
By: BCLP GP, Inc., its General Partner
Dated: November 3, 2000 By: /s/ Richard G. Pond
Richard G. Pond
Executive Vice President
Chief Financial Officer
and Chief Operating Officer
BOSTON CELTICS LIMITED PARTNERSHIP II
(Registrant)
By: BCLP II GP, Inc., its General Partner
Dated: November 3, 2000 By: /s/ Richard G. Pond
Richard G. Pond
Executive Vice President
Chief Financial Officer
and Chief Operating Officer
