<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 September 30, 2000 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)
World Trade Center East
Two Seaport Lane, 16th Fl.
Boston, Massachusetts 02210
(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
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NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 2000
PART I
FINANCIAL INFORMATION
----------------------
2
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NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
BALANCE SHEETS
September 30, 2000 December 31, 1999
(Unaudited) (Audited)
------------------- ------------------
ASSETS
Real estate investments:
Property, net $ - $ 8,695,906
Joint venture - 152,500
----------- -----------
- 8,848,406
Property held for disposition, net 8,427,606 1,491,742
Cash and cash equivalents 6,245,865 12,026,888
----------- -----------
$14,673,471 $22,367,036
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 121,649 $ 93,275
Accrued management fee 11,213 16,963
Deferred management and
disposition fees 2,006,447 1,930,523
----------- -----------
Total liabilities 2,139,309 2,040,761
----------- -----------
Partners' capital (deficit):
Limited partners ($273
and $367 per unit,
respectively; 160,000
units authorized, 82,228
units issued and outstanding) 12,547,877 20,339,363
General partners (13,715) (13,088)
----------- ----------
Total partners' capital 12,534,162 20,326,275
----------- ----------
$14,673,471 $22,367,036
=========== ===========
(See accompanying notes to unaudited financial statements)
3
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NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
September 30, 2000 September 30, 2000 September 30, 1999 September 30, 1999
------------------ ------------------ ------------------ ------------------
INVESTMENT ACTIVITY
<S> <C> <C> <C> <C>
Property rentals $ 444,313 $1,442,700 $ 239,544 $2,183,952
Interest income on loan to
ground lessor 21,392 86,162 33,533 101,365
Property operating expenses (151,239) (353,333) (216,052) (715,773)
Ground rent expense (97,500) (292,500) (97,500) (292,500)
Depreciation and amortization (122,718) (362,570) (131,000) (616,180)
--------- ---------- ---------- ----------
94,248 520,459 (171,475) 660,864
Joint venture earnings - - 184,576 403,528
--------- ---------- ---------- ----------
Total real estate operations 94,248 520,459 13,101 1,064,392
Gain on sale of property - 556,164 3,367,372 3,475,077
--------- ---------- ---------- ----------
Total real estate activity 94,248 1,076,623 3,380,473 4,539,469
Interest on cash equivalents 99,691 321,965 128,911 316,967
--------- ---------- ---------- ----------
Total investment activity 193,939 1,398,588 3,509,384 4,856,436
--------- ---------- ---------- ----------
</TABLE>
4
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NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
September 30, 2000 September 30, 2000 September 30, 1999 September 30, 1999
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Portfolio Expenses
Management fee 22,426 99,807 47,234 329,405
General and administrative 94,098 236,018 61,880 199,019
-------- ---------- ---------- ----------
116,524 335,825 109,114 528,424
-------- ---------- ---------- ----------
Net Income $ 77,415 $1,062,763 $3,400,270 $4,328,012
======== ========== ========== ==========
Net income per
limited partnership unit $ 0.93 $ 12.80 $ 40.94 $ 52.11
======== ========== ========== ===========
Cash distributions per
limited partnership unit $ 5.12 $ 107.55 $ 273.34 $ 292.21
======== ========== ========== ===========
Number of limited
partnership units outstanding
during the period 82,228 82,228 82,228 82,228
======== ========== ========== ===========
</TABLE>
(See accompanying notes to unaudited financial statements)
5
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NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
September 30, 2000 September 30, 2000 September 30, 1999 September 30, 1999
---------------------- ---------------------- ---------------------- ----------------------
General Limited General Limited General Limited General Limited
Partners Partners Partners Partners Partners Partners Partners Partners
-------- ----------- -------- ----------- -------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
beginning of
period $(10,237) $12,892,244 $(13,088) $20,339,363 $(34,228) $38,721,368 $(27,832) $39,354,545
Cash
distributions (4,253) (421,007) (11,255) (8,843,621) (20,216) (22,476,201) (35,889) (24,027,843)
Net income 775 76,640 10,628 1,052,135 34,003 3,366,267 43,280 4,284,732
--------- ----------- -------- ----------- ------- ----------- ------- -----------
Balance at
end of period $(13,715) $12,547,877 $(13,715) $12,547,877 $(20,441) $19,611,434 $(20,441) $19,611,434
========= =========== ======== =========== ======== =========== ======== ===========
</TABLE>
(See accompanying notes to unaudited financial statements)
6
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NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
SUMMARIZED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30,
-------------------------
2000 1999
---- ----
Net cash provided by operating activities $ 912,559 $ 1,659,957
----------- ------------
Cash flows from investing activities:
Deferred disposition fees 66,600 650,100
Investment in property (10,265) (8,717)
Repayment of loan to ground lessor 57,053 59,042
Net proceeds from sale of property 2,047,906 20,644,936
----------- ------------
Net cash provided by
investing activities 2,161,294 21,345,361
----------- ------------
Cash flows from financing activities:
Distributions to partners (8,854,876) (24,063,732)
----------- ------------
Net cash used in financing
activities (8,854,876) (24,063,732)
----------- ------------
Net decrease in cash and
cash equivalents (5,781,023) (1,058,414)
Cash and cash equivalents:
Beginning of period 12,026,888 7,220,155
----------- ------------
End of period $ 6,245,865 $ 6,161,741
=========== ============
(See accompanying notes to unaudited financial statements)
7
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NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
NOTES TO UNAUDITED 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 September 30, 2000 and December 31, 1999 and the
results of its operations and partners' capital (deficit) for the three and nine
month periods ended September 30, 2000 and 1999 and its cash flows for the nine
month periods ended September 30, 2000 and 1999. These adjustments are of a
normal recurring nature.
See notes to financial statements included in the Partnership's 1999 Annual
Report on Form 10-K for additional information relating to the Partnership's
financial statements. We prepared the unaudited financial statements following
the requirements of the SEC for interim reporting. As permitted under those
rules, certain footnotes or other financial information that are normally
required by generally accepted accounting principles can be condensed or
omitted.
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 its
real estate investments 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 has engaged AEW Real Estate Advisors, Inc.
(the "Advisor") to provide asset management services.
NOTE 2 - REAL ESTATE JOINT VENTURES
-----------------------------------
On December 20, 1999, the Columbia Gateway Corporate Park joint venture
investment in which the Partnership and an affiliate were entitled to 30.5% and
69.5%, respectively, of the operating activity, sold its property to an
unaffiliated third party for gross proceeds of $19,850,000, of which the
Partnership's share was $6,054,250. The Partnership received its 30.5% share of
the net proceeds, $5,891,032 after closing costs, and recognized a gain of
$957,057 ($11.52 per limited partnership unit) on the sale. On January 27, 2000,
the Partnership made a capital distribution of $5,755,960 ($70 per limited
partnership unit) from the proceeds of the sale. In addition, a portion of the
proceeds was used to pay previously accrued but deferred management fees to the
Advisor of $23,617. At December 31, 1999, $500,000 remained in the joint
venture, of which the Partnership's 30.5% share, $152,500, was distributed to
the Partnership in February 2000.
8
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NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
Summarized Financial Information
The following summarized financial information is presented in the
aggregate for the Columbia Gateway Corporate Park joint venture:
Results of Operations
---------------------
Nine Months Ended
September 30, 1999
------------------
Revenue
Rental income $1,902,873
----------
1,902,873
----------
Expenses
Operating expenses 386,406
Depreciation and amortization 193,425
----------
579,831
----------
Net income $1,323,042
==========
Expenses exclude amounts owed and attributable to the Partnership and its
affiliate on behalf of their financing arrangements with the joint venture.
NOTE 3 - PROPERTY
-----------------
On June 25, 1999, the Partnership sold the Puente Street property for
$11,770,000. The Partnership received net proceeds of $11,211,554 and
recognized a gain of $104,975 ($1.26 per limited partnership unit). A
disposition fee of $353,100 was accrued but not paid to the Advisor. On July
29, 1999, the Partnership made a capital distribution of $11,018,552 ($134 per
limited partnership unit) from the sale proceeds. In addition, a portion of the
proceeds was used to pay deferred management fees to the Advisor of $234,897.
On August 27, 1999, the Partnership sold the Dahlia property for $9,900,000.
The Partnership received net proceeds of $9,723,207 and recognized a gain of
$3,367,359 ($40.54 per limited partnership unit). A disposition fee of $297,000
was accrued but not paid to the Advisor. On September 22, 1999, the Partnership
made a capital distribution of $9,456,220 ($115 per limited partnership unit)
from the sale proceeds.
9
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NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
On February 17, 2000, the Partnership sold the Waters Landing II property
for $2,220,000. The Partnership received net proceeds of $2,114,506 and
recognized a gain of $556,164 ($6.70 per limited partnership unit).
A disposition fee of $66,600 was accrued but not paid to the Advisor.
On March 15, 2000 the Partnership made a capital distribution of $1,973,472
($24 per limited partnership unit) from the sale proceeds.
The following is a summary of the Partnership's investments in property
(one at September 30, 2000 and two at December 31, 1999):
September 30, 2000 December 31,1999
------------------ ----------------
Building and improvements $ $ 8,480,975
Accumulated depreciation (1,665,207)
Loan to ground lessor 1,445,320
Lease commissions and other
assets, net 249,698
Accounts receivable 311,195
Accounts payable (126,075)
Property held for disposition 8,427,606 1,491,742
---------- -----------
$8,427,606 $10,187,648
========== ===========
On October 13, 2000, the Partnership executed a Purchase and Sale Agreement
to sell the Santa Rita Plaza investment. Although there can be no assurances
that this sale will occur, it is expected to be concluded during the fourth
quarter of 2000. This investment is classified as Property held for
disposition, net on the Balance Sheet at September 30, 2000. During the nine
months ended September 30, 2000 and 1999, the Partnership recognized $478,081
and $210,539 in net income from this investment, respectively.
The Partnership recognized a net loss of $22,217 for the year ended 1999
from the Waters Landing investment which was held for disposition at
December 31, 1999.
NOTE 4 - SUBSEQUENT EVENT
-------------------------
Distributions of cash from operations relating to the quarter ended
September 30, 2000 were made on October 26, 2000 in the aggregate amount of
$226,750 ($2.73 per limited partnership unit). Also at this time, a capital
distribution was made from unallocated original working capital reserves in the
amount of $3,618,032 ($44.00 per limited partnership unit).
10
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NEW ENGLAND PENSION PROPERTIES V;
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 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, eight of which have been sold: two in 1994, two in
1997, three in 1999, and one in 2000. As a result of the sales, capital of
$59,850,280 has been returned to the limited partners through September 30,
2000. The adjusted capital contribution was reduced from $1,000 to $952 per
unit in 1994, to $924 in 1995, to $616 in 1997, to $367 in 1999 and then to $273
in 2000.
At September 30, 2000, the Partnership had $6,245,865 in cash and cash
equivalents, of which $226,750 was used for operating cash distributions and
$3,618,032 was used for capital distributions to partners on October 26, 2000;
the remainder will be retained as working capital reserves. The source of
future liquidity and cash distributions to partners will be cash generated by
the Partnership's invested cash and cash equivalents and its last remaining real
estate investment. Distributions of cash from operations relating to the first
quarter of 2000 were made at the annualized rate of 5.50% on the weighted
average adjusted capital contribution of $312.52, while distributions of cash
from operations relating to the second and third quarters of 2000 were made at
the annualized rates of 7.50% and 4%, respectively, on the adjusted capital
contribution of $273. At the time of the operating distribution relating the
third quarter of 2000, the Partnership also made a capital distribution from
unallocated original working capital reserves in the amount of $3,618,032
($44.00 per limited partnership unit). The rate decrease in the third quarter
of 2000 is primarily due to lower cash available for distribution due to timing
of distributions from the last remaining investment to the Partnership.
Distributions of cash from operations relating to the first two quarters of 1999
were made at the annualized rate of 6.50% on the adjusted capital contribution
of $616. At the time of the operating distribution related to the second
quarter of 1999, the Partnership also made a special distribution of $14.33 per
limited partnership unit from operating cash previously held in reserves.
Distributions of cash from operations relating to the third quarter of 1999 were
made at an annualized rate of 4.50% on the weighted average adjusted capital
contribution of $511.53.
11
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NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
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 September 30, 2000, the appraised value of the last remaining investment
exceeded its related carrying value by $340,000. The current appraised value of
the real estate investment has been estimated by the managing general partner
and is based on the amount negotiated in the Purchase and Sale Agreement
executed on October 13, 2000.
Results of Operations
---------------------
Santa Rita Plaza is a wholly-owned property. Waters Landing II, Puente
Street and Dahlia, which were sold in February 2000, June 1999 and August 1999,
respectively, were also wholly-owned properties. Columbia Gateway Corporate
Park was structured as a joint venture with a real estate development/management
firm and an affiliate of the Partnership. Columbia Gateway Corporate Park was
sold on December 20, 1999.
Operating Factors
As mentioned above, the Columbia Gateway Corporate Park joint venture
investment in which the Partnership and an affiliate were entitled to 30.5% and
69.5% of the operating activity, respectively, sold its property on December 20,
1999. The Partnership recognized its 30.5% share of the gain of $957,057. The
property was 100% leased at the time of sale.
As mentioned above, the Puente Street property was sold on June 25, 1999
and the Partnership recognized a gain of $104,975. The property was 100% leased
at the time of sale.
As mentioned above, the Dahlia property was sold on August 27, 1999 and the
Partnership recognized a gain of $3,367,359. The property was 100% leased at
the time of sale.
12
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NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
As mentioned above, the Waters Landing II property was sold on February 17,
2000 and the Partnership recognized an initial gain of $556,268. During the
second quarter of 2000, the Partnership incurred expenses of $104 relating to
the sale of Waters Landing, which subsequently reduced the overall gain to
$556,164 for the nine months ended September 30, 2000.
Occupancy at Santa Rita Plaza during the third quarter of 2000 was 100%
compared to 99% at September 30, 1999. On October 13, 2000, the Partnership
executed a Purchase and Sale Agreement to sell the Santa Rita Plaza investment.
Although there can be no assurances that this sale will occur, it is expected to
be concluded during the fourth quarter of 2000. This investment is classified
as Property held for disposition, net on the Balance Sheet as of September 30,
2000.
Investment Activity
Interest on cash equivalents for the three and nine months ended September
30, 2000 was $99,691 and $321,965, respectively, compared to $128,911 and
$316,967 for the same periods in 1999. Interest income for the three month
period ended September 30, 1999 was $29,220 higher than the respective three
month period of 2000 due to the temporary investment of sale proceeds prior to
distribution from the sales of Puente Street and Dahlia in June and August 1999,
respectively. The overall nine month balances remained relatively stable.
For the three and nine month periods ended September 30, 2000, real estate
operations were $94,248 and $520,459, respectively, compared to $13,101 and
$1,064,392 for the same periods in 1999. The comparative three month increase
is due to increased occupancy as well as lower operating expenses at Santa Rita
Plaza in 2000 as well as a reversal of previously recognized straight-line
rental revenue in prior year related to the sale of Dahlia in August 1999, which
was recognized during the three months ended September 30, 1999. The overall
nine month decrease is due to the sales of Puente Street, Dahlia and Columbia
Gateway in June 1999, August 1999 and December 1999, respectively.
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.
The Partnership management fee decreased between both the comparative three
and nine month periods ended September 30, 1999 and 2000, due to the decrease in
distributable operational cash flow as a result of the sales of Puente Street,
Dahlia and Columbia Gateway in June 1999, August 1999 and December 1999,
respectively. The nine month management fees in 1999 also included fees
recognized as a result of a special distribution from operating reserves.
During the respective three and nine month periods of 1999 and 2000, general and
administrative expenses increased by $32,218 and $36,999, respectively. The
increases are primarily due to an increase in investor servicing fees which were
offset by lower appraisal fees in 2000.
13
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NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 2000
PART II
OTHER INFORMATION
-------------------
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits: (27) Financial Data Schedule
b. Reports on Form 8-K: No current reports on Form 8-K were
filed during the quarter ended September 30, 2000.
14
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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)
November 9, 2000
/s/ Alison L. Husid
-------------------------------
Alison L. Husid
President, Chief Executive Officer
and Director of Managing General Partner
Fifth Copley Corp.
November 9, 2000
/s/ Jem A. Hudgins
--------------------------------
Jem A. Hudgins
Principal Financial and Accounting
Officer of Managing General Partner,
Fifth Copley Corp.
15
