SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended JUNE 30, 1995 COMMISSION FILE NUMBER 0-11884
NEW ENGLAND LIFE PENSION PROPERTIES;
A REAL ESTATE LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2774875
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
399 BOYLSTON STREET, 13TH FL.
BOSTON, MASSACHUSETTS 02116
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(617) 578-1200
Former Name, former address and former fiscal year if changed since
last report
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding twelve (12) months (or for
such shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days.
Yes X No ___
NEW ENGLAND LIFE PENSION PROPERTIES;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED JUNE 30, 1995
PART I
FINANCIAL INFORMATION
<PAGE>
NEW ENGLAND LIFE PENSION PROPERTIES;
A REAL ESTATE LIMITED PARTNERSHIP
BALANCE SHEET
(Unaudited)
June 30, 1995 December 31, 1994
ASSETS
Real estate investments:
Ground leases and mortgage
loans, net $ 11,143,875 $ 11,115,609
Property, net 4,901,714 4,886,582
Deferred leasing costs and
other assets, net 200,041 197,320
----------- ---------------
16,245,630 16,199,511
Cash and cash equivalents 1,445,579 2,431,089
Short-term investments 1,009,955 -
Interest, rent and other receivables 29,067 50,654
----------- ---------------
$ 18,730,231 $ 18,681,254
============ ===============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 70,497 $ 255,659
Accrued management fee 24,575 24,575
Deferred disposition fees 457,768 457,768
----------- ---------------
Total liabilities 552,840 738,002
----------- ---------------
Partners' capital:
Limited partners ($546.66 per unit;
30,000 units authorized,
issued and outstanding) 18,129,929 17,898,131
General partner 47,462 45,121
----------- ---------------
Total partners' capital 18,177,391 17,943,252
----------- ---------------
$ 18,730,231 $ 18,681,254
============ ===============
(See accompanying notes to financial statements)
<PAGE>
<TABLE>
NEW ENGLAND LIFE PENSION PROPERTIES;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS
(Unaudited)
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED QUARTER ENDED SIX MONTHS ENDED
JUNE 30, 1995 JUNE 30, 1995 JUNE 30, 1994 JUNE 30, 1994
<S>
INVESTMENT ACTIVITY <C> <C> <C> <C>
Property rentals $ 232,472 $ 426,582 $ 128,981 $ 281,574
Property operations (73,742) (144,991) (72,330) (150,041)
Depreciation and amortization (46,861) (95,065) (45,683) (93,344)
----------- -------------- ----------- -------------
111,869 186,526 10,968 38,189
Credit from (provision for)
impaired mortgage loans 30,000 30,000 100,000 100,000
Ground rentals and interest
on mortgage loans 276,860 554,270 449,699 893,793
----------- -------------- ----------- -------------
Total real estate operations 418,729 770,796 560,667 1,031,982
Gain on sale of property - - 1,385,561 1,385,561
----------- -------------- ----------- -------------
Total real estate activity 418,729 770,796 1,946,228 2,417,543
Interest on cash equivalents
and short-term investments 33,838 67,243 23,742 37,570
----------- -------------- ----------- -------------
Total investment activity 452,567 838,039 1,969,970 2,455,113
----------- -------------- ----------- -------------
Portfolio Expenses
Management fee 24,576 49,151 38,811 77,622
General and administrative 31,783 57,779 33,200 59,728
----------- -------------- ----------- -------------
56,359 106,930 72,011 137,350
----------- -------------- ----------- -------------
Net income $ 396,208 $ 731,109 $ 1,897,959 $ 2,317,763
=========== ============== =========== =============
Net income per limited
partnership unit $ 13.08 $ 24.13 $ 62.63 $ 76.49
=========== ============== =========== =============
Cash distributions per
limited partnership unit $ 8.20 $ 16.40 $ 12.95 $ 25.90
=========== ============== =========== =============
Number of limited partnership
units outstanding during
the period 30,000 30,000 30,000 30,000
========== ============== =========== =============
<FN>
(See accompanying notes to financial statements)
</TABLE>
<PAGE>
<TABLE>
NEW ENGLAND LIFE PENSION PROPERTIES;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
(Unaudited)
<CAPTION>
Quarter Ended Six Months Ended Quarter Ended Six Months Ended
June 30, 1995 June 30, 1995 June 30, 1994 June 30, 1994
General Limited General Limited General Limited General Limited
Partner Partners Partner Partners Partner Partners Partner Partners
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bal. at
beginning
ofperiod $45,985 $17,983,683 $45,121 $17,898,131 $28,633 $22,066,151 $28,359 $22,039,045
Cash dis-
tributions (2,485) (246,000) (4,970) (492,000) (3,924) (388,500) (7,848) (777,000)
Net income 3,962 392,246 7,311 723,798 18,980 1,878,979 23,178 2,294,585
------- ----------- ------- ----------- ------ ---------- ------- ----------
Balance at
end of
period $47,462 $18,129,929 $47,462 $ 18,129,929 $43,689 $23,556,630 $43,689 $23,556,630
======= =========== ======= =========== ====== =========== ======= ==========
<FN>
(See accompanying notes to financial statements)
</TABLE>
<PAGE>
NEW ENGLAND LIFE PENSION PROPERTIES;
A REAL ESTATE LIMITED PARTNERSHIP
SUMMARIZED STATEMENT OF CASH FLOWS
(Unaudited)
Six months ended June 30,
1995 1994
Net cash provided by operating activities $ 671,878 $ 899,764
---------- ---------
Cash flows from investing activities:
Net proceeds from sale of investment - 6,222,295
Capital expenditures on owned property (164,053) (116,910)
Decrease (increase) in short-term
investments, net (996,365) 581,914
Increase in deferred disposition fees - 192,442
---------- ---------
Net cash provided by (used in) investing
activities (1,160,418) 6,879,741
---------- ---------
Cash flows from financing activity:
Distributions to partners (496,970) (784,848)
---------- ---------
Net increase (decrease) in cash and
cash equivalents (985,510) 6,994,657
Cash and cash equivalents:
Beginning of period 2,431,089 1,038,303
---------- ---------
End of period $1,445,579 $8,032,960
========== =========
(See accompanying notes to financial statements)
<PAGE>
NEW ENGLAND LIFE PENSION PROPERTIES;
A REAL ESTATE LIMITED PARTNERSHIP
Notes to Financial Statements
(Unaudited)
In the opinion of management, the accompanying unaudited financial
statements contain all adjustments necessary to present fairly the
Partnership's financial position as of June 30, 1995, and December 31,
1994, and the results of its operations, its cash flows and changes in
partners' capital for the interim periods ended June 30, 1995, and
1994. These adjustments are of a normal recurring nature.
See notes to financial statements included in the Partnership's 1994
Annual Report on Form 10-K for additional information relating to the
Partnership's financial statements.
NOTE 1 - ORGANIZATION AND BUSINESS
New England Life Pension Properties; A Real Estate Limited Partnership
(the "Partnership") is a Massachusetts limited partnership organized
for the purpose of investing primarily in newly constructed and
existing income producing real properties. The Partnership commenced
operations in June 1983 and acquired several real estate investments
through 1985. It intends to dispose of its investments within twelve
years of their acquisition, and then liquidate; however, the general
partner could extend the investment period if it is in the best
interest of the limited partners.
NOTE 2 -INVESTMENTS IN GROUND LEASES AND MORTGAGE LOANS
In accordance with Statement of Financial Accounting Standards No. 114
which the Partnership adopted as of January 1, 1993, the mortgage loan
on Decatur TownCenter is impaired. Accordingly, a valuation allowance
has been established to adjust the carrying value of the loan to its
estimated fair market value less anticipated costs of sale. The
recorded and carrying values of the impaired mortgage loan at the
beginning and end of the respective periods are as follows:
Recorded Valuation Carrying
Value Allowance Value
Balance at January 1, 1994 $ 6,561,846 $(2,800,000) $3,761,846
========== =========
Increase in estimated fair market value
of collateral 100,000
-----------
Balance at June 30, 1994 $ 6,555,239 $(2,700,000) $3,855,239
========== =========== ==========
Balance at December 31, 1994 $ 6,646,927 $(2,600,000) $4,046,927
========== ==========
Increase in estimated fair market value of
collateral 30,000
-----------
Balance at June 30, 1995 $ 6,848,933 $(2,570,000) $4,278,933
========== =========== ==========
During the second half of 1994, the allowance was reduced by $100,000.
NOTE 3 - SUBSEQUENT EVENT
Distributions of cash from operations relating to the quarter ended
June 30, 1995 were made on July 27, 1995 in the aggregate amount of
$248,485 ($8.20 per limited partnership unit).
<PAGE>
NEW ENGLAND LIFE PENSION PROPERTIES;
A REAL ESTATE LIMITED PARTNERSHIP
Management's Discussion and Analysis of Financial Condition and Results
of Operations
LIQUIDITY AND CAPITAL RESOURCES
The Partnership completed its offering of units of limited partnership
interest in June, 1983. A total of 30,000 units were sold. The
Partnership received proceeds of $27,253,251, net of selling
commissions and other offering costs, which were invested in real
estate, used to pay related acquisition costs, or retained as working
capital reserves. The Partnership made six real estate investments;
one was sold in 1985, one in 1991 and another in 1994. As a result of
these sales and similar transactions, capital of $13,600,200 has been
returned to the limited partners as of June 30, 1995. One of the
Partnership's mortgage loan investments matured in 1994 and another
matured in February, 1995. The Partnership is in the process of
evaluating various alternatives to renewing these loans.
At June 30, 1995, the Partnership had $2,455,534 in cash, cash
equivalents and short-term investments, $248,485 of which was used for
cash distributions to partners on July 27, 1995; the remainder will be
used to fund the rehabilitation of the Willows Shopping Center or
retained as working capital reserves. The source of future liquidity
and cash distributions to partners is expected to be cash generated by
the Partnership's real estate investments and proceeds from the sale of
such investments. Distributions of cash from operations for the first
and second quarters of 1995 were made at the annualized rate of 6% on
the adjusted capital contribution. The cash distribution rate for the
comparative prior year quarters was 7%. The adjusted capital
contribution was reduced from $740 per unit to $546.66 per unit in
July, 1994, as a result of the distribution of sales proceeds from the
Ontario Distribution Center sale in June, 1994. The reduction in the
cash distribution rate is due to the absence of cash flow from Ontario.
The carrying value of real estate investments in the financial
statements, other than impaired mortgage loans, is at cost or is
reduced to its lower net realizable value if the investment's carrying
value is determined not to be recoverable through expected undiscounted
cash flows. At June 30, 1995, the carrying value of Willows Shopping
Center exceeded its appraised value by approximately $330,000 and the
appraised value of the Rivers Corporate Park exceeded its related
carrying value by approximately $40,000. The current appraised value
of real estate investments has been estimated by the general partner
and is generally based on a combination of traditional appraisal
approaches performed by the advisor and independent appraisers.
Because of the subjectivity inherent in the valuation process, the
estimated current appraised value may differ significantly from that
which could be realized if the real estate were actually offered for
sale in the marketplace.
RESULTS OF OPERATIONS
OPERATING FACTORS
Leasing at the Willows Shopping Center has remained at 91% during the
first half of 1995. (The Center was 78% leased at June 30, 1994.)
This property is undergoing a full rehabilitation, including the
complete renovation and reconfiguration of the Center. The general
partner has determined that it is in the best interest of the
Partnership to provide funding for the rehabilitation costs together
with its affiliate which shares in the ownership. The Partnership's
share of the remaining estimated rehabilitation cost is approximately
$750,000. Two tenants (totaling 3,200 square feet) that signed leases
in the first quarter are now scheduled to commence occupancy in the
third quarter; their occupancy was pushed back due to delays in
construction. In addition, two other tenants (totaling 15,700 square
feet) have signed leases and are scheduled to commence occupancy late
in the third quarter. During the second quarter, a lease buyout was
agreed upon with the tenant who had vacated the pad site at the
entrance to the Center. This space is now available for
rehabilitation; the focus is on finding an attractive long-term tenant
for this site.
Decatur TownCenter occupancy increased from 90% to 93% during the
second quarter of 1995 due to the signing of one lease. (The property
was 90% and 97% leased at December 31, 1994, and June 30, 1994,
respectively.) Market conditions have improved and the property faces
minimal lease rollover exposure during 1995. During the second quarter
the Partnership was negotiating a loan extension and modification with
the borrower in return for the Partnership's sole right to cause a
sale. The borrower, however, was not willing to grant the Partnership
the exclusive right to cause a sale. The Partnership is currently
exploring other avenues to resolve the dispute.
INVESTMENT RESULTS
In June, 1994, the Ontario Distribution Center investment was sold.
After the accrual of the disposition fee of $192,442 payable to the
advisor, the Partnership recognized a gain of $1,385,161. During the
six months ended June 30, 1994, $309,718 in ground rentals and interest
on mortgage loans was recognized from this investment.
The credit from (provision for) impaired mortgage loans relates solely
to changes in the net fair market value of the collateral underlying
the Decatur TownCenter mortgage loans. Exclusive of the credit from
(provision for) impaired mortgage loans and the activity from Ontario
Distribution Center, real estate investment results were $740,799 and
$622,264 for the six months ended June 30, 1995 and 1994, respectively.
This increase of $118,535 or 19%, was due to an increase in net
operating income generated by Willows Shopping Center as a result of
both improved occupancy and the Partnership's share of the lease buyout
proceeds (approximately $65,000), partially offset by a decrease of
approximately $30,000 in the operating income generated by Decatur
TownCenter due to lower average occupancy.
Interest on cash equivalents and short-term investments increased by
$29,673 or 79% due primarily to higher average investment balances.
Operating cash flow, exclusive of approximately $310,000 from Ontario
Distribution Center in 1994, increased by approximately $81,000 during
the respective periods. This change is reflective of the
aforementioned changes in operating results.
PORTFOLIO EXPENSES
The Partnership management fee is 9% of distributable cash flow from
operations after any increase or decrease in working capital reserves
as determined by the general partner. General and administrative
expenses primarily consist of real estate appraisal, printing, legal,
accounting and investor servicing fees.
The Partnership management fee for the first six months of 1995
decreased approximately $28,000 or 37% compared to the respective prior
year period due to the decrease in distributable cash flow. General
and administrative expenses remained relatively unchanged between these
respective periods.
<PAGE>
NEW ENGLAND LIFE PENSION PROPERTIES;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED JUNE 30, 1995
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits: NONE.
b. Reports on Form 8-K: No reports on Form 8-K were
filed during the quarter ended June 30, 1995
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
NEW ENGLAND LIFE PENSION PROPERTIES; A
REAL ESTATE LIMITED PARTNERSHIP
(Registrant)
August 11, 1995 Peter P. Twining
Managing Director and General Counsel of
Managing General Partner,
Copley Properties Company, Inc.
August 11, 1995 Marie A. Welch
Investment Officer and Chief Accounting
Officer of Managing General Partner,
Copley Properties Company, Inc.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 1445579
<SECURITIES> 1009955
<RECEIVABLES> 29067
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2484601
<PP&E> 16245630
<DEPRECIATION> 0
<TOTAL-ASSETS> 18730231
<CURRENT-LIABILITIES> 552840
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 18177391
<TOTAL-LIABILITY-AND-EQUITY> 18730231
<SALES> 0
<TOTAL-REVENUES> 1078095
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 346986
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 731109
<INCOME-TAX> 0
<INCOME-CONTINUING> 731109
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 731109
<EPS-PRIMARY> 24.13
<EPS-DILUTED> 24.13
</TABLE>
