<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
----------------------------------------------------------------------
For Quarter Ended March 31, 1997 Commission File Number 0-17808
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Massachusetts 04-2940131
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
225 Franklin Street, 25th Fl.
Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(617) 261-9000
- ----------------------------------------------------------------------------
Former name, former address and former fiscal year if changed since last report
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve (12) months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
<PAGE>
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED MARCH 31, 1997
PART I
FINANCIAL INFORMATION
----------------------
<PAGE>
BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
-------------- -----------------
<S> <C> <C>
ASSETS
Real estate investments:
Property, net $42,525,069 $42,828,754
Joint ventures 4,749,937 4,722,223
----------- -----------
47,275,006 47,550,977
Cash and cash equivalents 8,184,052 4,706,279
Short-term investments 3,805,534 7,332,878
----------- -----------
$59,264,592 $59,590,134
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 106,710 $ 108,026
Accrued management fee 59,452 57,064
Deferred management and
disposition fees 656,036 596,583
----------- -----------
Total liabilities 822,198 761,673
----------- -----------
Commitments to fund real estate
investments
Partners' capital (deficit):
Limited partners ($924 per
unit; 160,000 units
authorized, 82,388 and 82,426
units issued and outstanding,
respectively) 58,533,701 58,916,206
General partners (91,307) (87,745)
----------- -----------
Total partners' capital 58,442,394 58,828,461
----------- -----------
$59,264,592 $59,590,134
=========== ===========
</TABLE>
(See accompanying notes to financial statements)
<PAGE>
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended March 31,
-------------------------
1997 1996
---------- -----------
<S> <C> <C>
INVESTMENT ACTIVITY
Property rentals $1,631,801 $1,616,865
Interest income on loan to
ground lessor 38,568 37,649
Property operating expenses (436,796) (410,869)
Ground rent expense (97,500) (97,500)
Depreciation and amortization (383,470) (377,244)
---------- ----------
752,603 768,901
Joint venture earnings 85,221 88,857
---------- ----------
Total real estate operations 837,824 857,758
Interest on cash equivalents
and short-term investments 151,210 148,016
---------- ----------
Total investment activity 989,034 1,005,774
---------- ----------
PORTFOLIO EXPENSES
Management fee 118,904 114,281
General and administrative 72,289 84,969
---------- ----------
191,193 199,250
---------- ----------
Net Income $ 797,841 $ 806,524
========== ==========
Net income per weighted average
limited partnership unit $9.58 $9.67
========== ==========
Cash distributions per
limited partnership unit
outstanding for the entire
period $13.86 $12.13
========== ==========
Weighted average number of limited
partnership units outstanding during
the period 82,426 82,536
</TABLE>
========== ==========
(See accompanying notes to financial statements)
<PAGE>
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended March 31,
--------------------------------------------------
1997 1996
---------------------- ---------------------
General Limited General Limited
Partners Partners Partners Partners
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Balance at
beginning of
period $(87,745) $58,916,206 $(76,904) $60,073,461
Repurchase of
limited partnership
units - (29,944) - (35,468)
Cash
distributions (11,540) (1,142,424) (10,112) (1,001,162)
Net income 7,978 789,863 8,065 798,459
-------- ----------- -------- -----------
Balance at
end of period $(91,307) $58,533,701 $(78,951) $59,835,290
======== =========== ======== ===========
</TABLE>
(See accompanying notes to financial statements)
<PAGE>
SUMMARIZED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended March 31,
-------------------------
1997 1996
--------- ---------
<S> <C> <C>
Net cash provided by operating activities $ 1,234,812 $ 1,273,025
----------- -----------
Cash flows from investing activities:
Investment in property (61,195) (27,764)
Decrease in short-term investments, net 3,471,891 2,504,593
Repayment of loan to ground lessor 16,173 14,823
----------- -----------
Net cash provided by
investing activities 3,426,869 2,491,652
----------- -----------
Cash flows from financing activities:
Distributions to partners (1,153,964) (1,011,274)
Repurchase of limited partnership
units (29,944) (35,468)
----------- -----------
Net cash used in financing
activities (1,183,908) (1,046,742)
----------- -----------
Net increase in cash and
cash equivalents 3,477,773 2,717,935
Cash and cash equivalents:
Beginning of period 4,706,279 3,790,598
----------- -----------
End of period $ 8,184,052 $ 6,508,533
=========== ===========
</TABLE>
Non-cash transaction:
Effective January 1, 1996, the Partnership's joint venture investment in
University Business Park was converted to a wholly-owned property. The carrying
value of this investment at conversion was $5,630,581.
(See accompanying notes to financial statements)
<PAGE>
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 March 31, 1997 and December 31, 1996 and the results of its
operations, its cash flows and changes in partners' capital (deficit) for the
interim periods ended March 31, 1997 and 1996. These adjustments are of a
normal recurring nature.
See notes to financial statements included in the Partnership's 1996 Annual
Report on Form 10-K for additional information relating to the Partnership's
financial statements.
NOTE 1 - ORGANIZATION AND BUSINESS
- ----------------------------------
New England Pension Properties V; A Real Estate Limited Partnership (the
"Partnership") is a Massachusetts limited partnership organized for the purpose
of investing primarily in newly constructed and existing income producing real
properties. It primarily serves as an investment for qualified pension and
profit sharing plans and other entities intended to be exempt from federal
income tax. The Partnership commenced operations in May, 1987 and acquired the
seven real estate investments it currently owns prior to the end of 1989. The
Partnership intends to dispose of its investments within eight to twelve years
of their acquisition, and then liquidate.
The Partnership maintains a repurchase fund for the purpose of repurchasing
limited partnership units. Two percent of cash flow, as defined, is designated
for this fund which had a balance of $52,648 and $56,736 at March 31, 1997 and
December 31, 1996, respectively.
NOTE 2 - REAL ESTATE JOINT VENTURES
- -----------------------------------
Effective January 1, 1996, the University Business Park joint venture was
dissolved and the venture partner's ownership interest was assigned to the
Partnership. Accordingly, this investment is now a wholly-owned property.
The Waters Landing II joint venture was restructured and the investment has
been accounted for as a wholly-owned property since April 1, 1996.
The following summarized financial information is presented in the aggregate
for the Partnership's joint ventures (one at March 31, 1997 and December 31,
1996; two at March 31, 1996):
Assets and Liabilities
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
-------------- -----------------
<S> <C> <C>
Assets
Real property, at cost less
accumulated depreciation
of $1,903,907 and $1,852,988,
respectively $15,914,566 $15,670,283
Other 191,924 321,328
----------- -----------
16,106,490 15,991,611
Liabilities 65,949 43,521
----------- -----------
Net Assets $16,040,541 $15,948,090
=========== ===========
</TABLE>
<PAGE>
Results of Operations
<TABLE>
<CAPTION>
Quarter ended March 31,
-----------------------
1997 1996
---------- -----------
<S> <C> <C>
Revenue
Rental income $462,031 $496,341
-------- -----------
462,031 496,341
-------- -----------
Expenses
Operating expenses 118,144 140,532
Depreciation and amortization 64,475 64,475
-------- -----------
182,619 205,007
-------- -----------
Net income $279,412 $291,334
======== ===========
</TABLE>
Liabilities and expenses exclude amounts owed and attributable to the
Partnership and (with respect to one joint venture) its affiliate on behalf of
their financing arrangements with the joint ventures.
NOTE 3 - PROPERTY
- -----------------
Effective January 1, 1996, the University Business Park joint venture was
dissolved and the venture partner's ownership interest was assigned to the
Partnership. Since that date, the investment has been accounted for as a wholly-
owned property. The carrying value of the joint venture investment at
conversion ($5,630,581) was allocated to land, building and improvements and
other net operating assets. On March 28, 1997, the Partnership executed a
purchase and sale agreement to sell this property for a price that exceeds its
carrying value.
In the second quarter of 1996, the Waters Landing II joint venture was
restructured and the venture partner's ownership interest was assigned to the
Partnership. Since April 1, 1996, the investment has been accounted for as a
wholly-owned property. The carrying value of the joint venture investment at
conversion ($1,491,742) was allocated to land and the investment valuation
allowance.
A settlement with a former tenant at Dahlia for past due rent was secured
by an attachment on 36 acres of land in Scottsdale, Arizona. During the first
quarter of 1996, the land was sold. The Partnership received $332,489 in net
proceeds, which exceeded the carrying value of the receivable by approximately
$32,000.
<PAGE>
The following is a summary of the Partnership's six investments in
property:
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
--------------- ------------------
<S> <C> <C>
Land $11,475,045 $11,475,045
Building and improvements 34,444,451 34,383,256
Accumulated depreciation (3,130,019) (2,797,876)
Investment valuation allowance (3,500,000) (3,500,000)
Loan to ground lessor 1,648,353 1,664,726
Lease commissions and other
assets, net 1,657,662 1,667,594
Accounts receivable 559,931 576,334
Accounts payable (630,354) (640,325)
----------- -----------
$42,525,069 $42,828,754
=========== ===========
</TABLE>
NOTE 4 - SUBSEQUENT EVENT
- -------------------------
Distributions of cash from operations relating to the quarter ended March
31, 1997 were made on April 24, 1997 in the aggregate amount of $1,202,254
($14.44 per limited partnership unit.)
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Liquidity and Capital Resources
- -------------------------------
The Partnership completed its offering of limited partnership units in
December 1988. A total of 83,291 units were sold. The Partnership received
proceeds of $74,895,253, net of selling commissions and other offering costs,
which have been used for investment in real estate, for the payment of related
acquisition costs and for working capital reserves. The Partnership made nine
real estate investments, two of which were sold in 1994. As a result of the
sales, capital of $6,281,804 has been returned to the limited partners through
March 31, 1997. The adjusted capital contribution was reduced to $952 from
$1,000 per unit in 1994, and then to $924 in July 1995.
At March 31, 1997, the Partnership had $11,989,586 in cash, cash
equivalents and short-term investments, of which $1,202,254 was used for cash
distributions to partners on April 24, 1997; the remainder will be used to
complete the funding of real estate investments or be retained as working
capital reserves. The source of future liquidity and cash distributions to
partners will be cash generated by the Partnership's short-term and real estate
investments. Distributions of cash from operations relating to the first
quarter of 1996 were made at the annualized rate of 6% on the adjusted capital
contribution. Distributions of cash from operations relating to the first
quarter of 1997 were made at the annualized rate of 6.25% on the adjusted
capital contribution. The distribution rate was increased due to the
stabilization of property operations and the attainment of appropriate cash
reserve levels.
The Partnership maintains a fund for the purpose of repurchasing limited
partnership units pursuant to the terms and conditions set forth in the
Partnership Agreement. Two percent of cash flow, as defined, is designated for
this fund which had a balance of $52,648 and $56,736 at March 31, 1997, and
December 31, 1996, respectively. Through March 31, 1997, the Partnership
repurchased and retired 903 limited partnership units for an aggregate cost of
$843,180.
The carrying value of real estate investments in the financial statements
is at depreciated cost, or if the investment's carrying value is determined not
to be recoverable through expected undiscounted future cash flows, the carrying
value is reduced to estimated fair market value. The fair market value of such
investments is further reduced by the estimated cost of sale for properties held
for sale. Carrying value may be greater or less than current appraised value.
At March 31, 1997, the appraised values of certain investments exceeded their
related carrying values by an aggregate of $7,300,000, and the appraised values
of the remaining investments were less than their related carrying values by an
aggregate of $1,100,000. The current appraised value of real estate investments
has been estimated by the managing general partner and is generally based on a
combination of traditional appraisal approaches performed by the Partnership's
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
- ---------------------
Puente Street, Palms Business Center, Santa Rita Plaza and Dahlia are
wholly-owned properties. Effective January 1, 1996, the University Business
Park joint venture was dissolved and the venture partner's ownership interest
was assigned to the Partnership. Effective April 1, 1996, the Waters Landing II
joint venture was restructured and the venture partner's ownership interest was
assigned to the Partnership. Accordingly, these investments have been accounted
for as wholly-owned properties since their respective conversion
<PAGE>
dates. The remaining investment in the portfolio, Columbia Gateway Corporate
Park, is structured as a joint venture with a real estate development/management
firm and an affiliate of the Partnership.
Operating Factors
Occupancy at University Business Park increased to 100% at March 31, 1997,
up from 98% at March 31, 1996. On March 28, 1997, the Partnership executed a
purchase and sale agreement to sell this property for a price which exceeds its
carrying value.
Overall occupancy at Columbia Gateway Corporate Park increased to 95%
during the first quarter of 1997 compared to 92% at March 31, 1996. No leases
are due to expire until December 1997.
Occupancy at Puente Street has remained at 100% since the first quarter of
1994. Operations are stable and no leases are due to expire until May 1998.
During 1995, the joint venture undertook a number of feasibility studies of
alternative development plans for the Waters Landing II site. Based on the
results, it was determined that it was not in the best interest of the limited
partners to develop this site. Accordingly, the carrying value was reduced in
1995 to estimated fair market value less cost of sale.
Occupancy at the Palms Business Center III and IV increased to 100% at
March 31, 1997 from 95% at March 31, 1996 and 98% at December 31, 1996. No
leases are due to expire during the remainder of this year. Rental rates in Las
Vegas have increased over the past 12 months.
Occupancy at the Dahlia property remained at 100% during the first quarter
of 1997, where it has been since the first quarter of 1994. The Partnership had
previously received an interest in land located in Arizona as a rent settlement
from a former tenant. During the first quarter of 1996, upon liquidation of
this interest in land, the Partnership received cash of approximately $332,000.
Occupancy at Santa Rita Plaza during the first quarter of 1997 was 97%, up
from 92% at March 31, 1996 (occupancy was 98% at December 31, 1996). Although
occupancy is strong, performance at the Plaza has been affected by tenant
delinquencies and turnover due to business failures.
Investment Activity
Interest on cash equivalents and short-term investments for the first
quarter of 1997 increased 3% compared to the same period of 1996 due to higher
investment balances.
Real estate operations were relatively consistent between the first quarter
of 1997 and the comparable quarter of 1996, having decreased by $20,000 overall,
with no significant change at any of the properties.
Cash flow from operations for the first quarter of 1996 included $332,000
from the settlement of past due rents from a former tenant at the Dahlia
property. Exclusive of this amount, cash flow from operations increased by
$294,000 between the first quarter of 1997 and 1996. This increase is largely
attributable to changes in other working capital items.
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 managing general partner. General and administrative expenses
consist primarily of real estate appraisal, printing, legal, accounting and
investor servicing fees.
<PAGE>
The Partnership management fee increased slightly between the first quarter
of 1996 and 1997 due to an increase in distributable cash flow. General and
administrative expenses decreased 15% between the respective quarters, primarily
due to lower legal expenses.
<PAGE>
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED MARCH 31, 1997
PART II
OTHER INFORMATION
-------------------
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits: None.
b. Reports on Form 8-K: No Current Reports on
Form 8-K were filed during the quarter ended
March 31, 1997.
<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 PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
(Registrant)
May 13, 1997
/s/ James J. Finnegan
-------------------------------
James J. Finnegan
Managing Director and General Counsel
of Managing General Partner,
Fifth Copley Corp.
May 13, 1997
/s/ Daniel C. Mackowiak
--------------------------------
Daniel C. Mackowiak
Principal Financial and Accounting
Officer of Managing General Partner,
Fifth Copley Corp.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 8,184,052
<SECURITIES> 3,805,534
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 11,989,586
<PP&E> 47,275,006
<DEPRECIATION> 0
<TOTAL-ASSETS> 59,264,592
<CURRENT-LIABILITIES> 166,162
<BONDS> 656,036
0
0
<COMMON> 0
<OTHER-SE> 58,442,394
<TOTAL-LIABILITY-AND-EQUITY> 59,264,592
<SALES> 1,755,590
<TOTAL-REVENUES> 1,906,800
<CGS> 534,296
<TOTAL-COSTS> 534,296
<OTHER-EXPENSES> 574,663
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 797,841
<INCOME-TAX> 0
<INCOME-CONTINUING> 797,841
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 797,841
<EPS-PRIMARY> 9.58
<EPS-DILUTED> 9.58
</TABLE>
