<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, 1996 Commission File Number 0-17807
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Massachusetts 04-2988542
(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
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 1996
PART I
FINANCIAL INFORMATION
<PAGE>
BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
Assets
<S> <C> <C>
Real estate investments:
Joint ventures $ 15,681,433 $ 16,200,967
Property, net 8,349,370 8,371,374
------------ ----------
24,030,803 24,572,341
Cash and cash equivalents 3,342,552 2,997,934
Short-term investments 1,832,007 2,524,633
------------ ----------
$ 29,205,362 $ 30,094,908
============ ==========
Liabilities and Partners' Capital
Accounts payable $ 86,709 $ 79,597
Accrued management fee 51,517 60,924
Deferred disposition fees 582,677 582,677
------------ -----------
Total liabilities 720,903 723,198
------------ -----------
Partners' capital (deficit):
Limited partners ($768.98
per unit; 160,000 units
authorized; 48,788 units
issued and outstanding) 28,519,569 29,397,948
General partners (35,110) (26,238)
------------ -----------
Total partners' capital 28,484,459 29,371,710
------------ -----------
$ 29,205,362 $ 30,094,908
============ ===========
<FN>
(See accompanying notes to financial statements)
</TABLE>
<PAGE>
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended Quarter Ended Nine Months Ended
September 30, 1996 September 30, 1996 September 30, 1995 September 30, 1995
------------------- ------------------- ------------------- ------------------
<S> <C> <C> <C> <C>
Investment Activity
Property rentals $ 187,566 $ 577,408 $ 301,912 $ 1,002,214
Property operating expenses (99,985) (312,241) (72,178) (224,274)
Depreciation and amortization (71,958) (214,929) (126,517) (399,305)
------------- ------------ ------------- -------------
15,623 50,238 103,217 378,635
Joint venture earnings 314,860 829,809 305,753 885,964
Investment valuation allowance -- -- -- (1,500,000)
------------- ------------ ------------- -------------
Total real estate activity 330,483 880,047 408,970 (235,401)
------------- ------------ ------------- -------------
Interest on cash equivalents
and short-term investments 67,339 200,107 74,123 225,863
------------- ------------ ------------- -------------
Total investment activity 397,822 1,080,154 483,093 (9,538)
------------- ------------ ------------- -------------
Portfolio Expenses
Management fee 51,517 154,552 60,924 182,772
General and administrative 47,248 155,047 44,973 155,437
------------- ------------ ------------- -------------
98,765 309,599 105,897 338,209
------------- ------------ ------------- -------------
Net income (loss) $ 299,057 $ 770,555 $ 377,196 $ (347,747)
============= ============ ============= =============
Net income (loss) per limited
partnership unit $ 6.07 $ 15.64 $ 7.65 $ (7.06)
============= ============ ============= =============
Cash distributions per limited
partnership unit $ 10.57 $ 33.64 $ 12.50 $ 37.50
============= ============ ============= =============
Number of limited partnership
units outstanding during the
period 48,788 48,788 48,788 48,788
============= ============ ============= =============
<FN>
(See accompanying notes to financial statements)
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended Quarter Ended Nine Months Ended
September 30, 1996 September 30, 1996 September 30, 1995 September 30, 1995
-------------------- -------------------- --------------------- ---------------------
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 $ (32,892) $28,739,192 $ (26,238) $29,397,948 $ (19,105) $ 30,104,096 $ 464 $ 32,041,490
Cash distributions (5,209) (515,689) (16,578) (1,641,228) (6,160) (609,850) (18,480) (1,829,550)
Net income (loss) 2,991 296,066 7,706 762,849 3,772 373,424 (3,477) (344,270)
--------- ----------- --------- ---------- --------- ----------- --------- ----------
Balance at end
of period $ (35,110) $28,519,569 $ (35,110) $28,519,569 $ (21,493) $ 29,867,670 $ (21,493) $ 29,867,670
========== =========== ========== ========== ========= =========== ========== ===========
<FN>
(See accompanying notes to financial statements)
</TABLE>
<PAGE>
SUMMARIZED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1996 1995
----------- ----------
<S> <C> <C>
Net cash provided by operating
activities $ 1,444,001 $ 1,917,412
------------ ------------
Cash flows from investing activities:
Investment in property (134,203) (12,014)
Decrease (increase) in short-term
investments, net 692,626 (231,891)
------------ ------------
Net cash provided by (used in)
investing activities 558,423 (243,905)
------------ ------------
Cash flows from financing activity:
Distributions to partners (1,657,806) (1,848,030)
------------ ------------
Net increase (decrease) in cash
and cash equivalents 344,618 (174,523)
Cash and cash equivalents:
Beginning of period 2,997,934 4,652,903
------------ ------------
End of period $ 3,342,552 $ 4,478,380
============ ============
<FN>
(See accompanying notes to financial statements)
</TABLE>
<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 September 30, 1996 and December 31,
1995 and its operations, its cash flows and changes in partners' capital
(deficit) for the interim periods ended September 30, 1996 and 1995.
These adjustments are of a normal recurring nature.
See notes to financial statements included in the Partnership's 1995
Annual Report on Form 10-K for additional information relating to the
Partnership's financial statements.
Note 1 - Organization and Business
- ----------------------------------
Copley Pension Properties VI; 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 organizations
intended to be exempt from federal income tax. The Partnership commenced
operations in July 1988, and acquired the five real estate investments it
currently owns prior to the end of 1991. It intends to dispose of its
investments within eight to twelve years of their acquisition, and then
liquidate.
<PAGE>
Note 2 - Investments in Joint Ventures
- --------------------------------------
Summarized Financial Information
The following summarized financial information is presented in the
aggregate for the Partnership's joint ventures:
Assets and Liabilities
------------------------
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
<S> <C> <C>
Assets
Real property, at cost less
accumulated depreciation
of $5,996,889 and $5,295,528,
respectively $ 17,287,052 $ 18,062,468
Other 900,042 885,699
-------------- --------------
18,187,094 18,948,167
Liabilities 316,879 354,196
-------------- --------------
Net assets $ 17,870,215 $ 18,593,971
============== ==============
</TABLE>
<PAGE>
Results of Operations
----------------------
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1996 1995
--------- ---------
<S> <C> <C>
Revenue:
Rental income $ 2,749,886 $ 2,714,578
Other income 3,891 5,750
------------- ------------
2,753,777 2,720,328
------------- ------------
Expenses:
Operating expenses 1,020,926 910,746
Depreciation and amortization 670,932 680,986
------------- ------------
1,691,858 1,591,732
------------- ------------
Net income $ 1,061,919 $ 1,128,596
============= ============
</TABLE>
Liabilities and expenses exclude amounts owed and attributable
to the Partnership and (with respect to two joint ventures) its affiliates
on behalf of their various financing arrangements with the joint ventures.
<PAGE>
Note 3 - Property
- -----------------
The following is a summary of the Partnership's investment in
property at September 30, 1996 and December 31, 1995:
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------- -----------------
<S> <C> <C>
Land $ 3,408,203 $ 3,408,203
Buildings, improvements and
other capitalized costs 8,869,061 8,702,871
Investment valuation allowance (1,500,000) (1,500,000)
Accumulated depreciation and
amortization (2,262,413) (2,058,235)
Net operating liabilities (165,481) (181,465)
------------- --------------
$ 8,349,370 $ 8,371,374
============= ==============
</TABLE>
The Wilmington Industrial building is being depreciated over 30 years
and capitalized improvements are being depreciated over seven years. The
building and improvements of Stemmons Industrial are being depreciated
over 25 years.
During the second quarter of 1995, as a result of a revision to long-
term rental assumptions, the managing general partner determined that the
carrying value of the Wilmington Industrial property would not be
recovered through expected future undiscounted cash flows. Accordingly,
the carrying value was reduced to the estimated net fair market value
through the recognition of an investment valuation allowance of
$1,500,000.
<PAGE>
Note 4 - Subsequent Event
- -------------------------
Distributions of cash from operations relating to the quarter ended
September 30, 1996 were made on October 24, 1996 in the aggregate amount
of $520,898 ($10.57 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 units of limited
partnership interest on December 31, 1988. A total of 48,788 units were
sold. The Partnership received proceeds of $43,472,858, 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 seven real estate
investments; one was sold in 1990, and another in 1994. As a result of
these sales, capital of $11,271,004 has been returned to the limited
partners ($231.02 per limited partnership unit).
At September 30, 1996, the Partnership had $5,174,559 in cash, cash
equivalents and short-term investments, of which $520,898 was used for
cash distributions to partners on October 24, 1996; the remainder is being
retained as working capital reserves. The source of cash distributions to
partners is primarily cash generated by the Partnership's short-term and
real estate investments. Based on an adjusted capital contribution of
$768.98 per limited partnership unit, distributions of cash from
operations relating to the first, second and third quarters of 1996 were
made at the annualized rate of 5.5%. The distribution rate for the
comparative prior year quarters was 6.5%. The decrease in the
distribution rate is due to the decline in cash flow from operations as a
result of the vacancy at Stemmons Industrial.
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, 1996,
the carrying value of one investment exceeded its appraised value by
$200,000. The appraised value of each of the other investments exceeded
their related carrying values by a total of $4,700,000. 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.
<PAGE>
Results of Operations
- ---------------------
Form of Real Estate Investments
The Wilmington Industrial and Stemmons Industrial investments are
wholly-owned properties. The other three real estate investments in the
portfolio are joint ventures.
Operating Factors
Three of the Partnership's four industrial properties (Prentiss
Copystar, Wilmington and White Phonic) were 100% leased at September 30,
1996. Wilmington was 73% occupied at the beginning of the third quarter.
Upon expiration of its lease on September 30, 1995, the sole tenant at
Stemmons Industrial vacated the property. The Partnership negotiated a
four-month lease for 82% of the space, beginning November 1, 1995, with a
corporation that needed temporary warehouse capacity. That lease expired
at the end of February 1996 and the tenant vacated. The Partnership is
marketing this space to potential long-term tenants. There are no firm
prospects at this time.
During the second quarter of 1995, the managing general partner
determined the Partnership would likely not recover the carrying value of
its investment in the Wilmington Industrial Property over the projected
holding period. Accordingly, the carrying value was reduced to estimated
net fair market value, with a charge to operations of $1,500,000.
Occupancy at Waterford Apartments, the Partnership's multi-family
residential property, remained in the mid 90% range during the first nine
months of 1996, which is consistent with the prior year.
<PAGE>
Investment Results
- ------------------
Interest income on cash equivalents and short-term investments
decreased by $26,000, or 11%, between the first nine months of 1996 and
1995, due primarily to lower average investment balances and lower average
yields.
The investment valuation allowance of $1,500,000 recognized during
the second quarter of 1995 relates to the reduction in the carrying value
of the Wilmington Industrial property to its estimated net fair market
value.
Total real estate activity for the first nine months of 1996 was
$880,047, a decrease from $1,264,599 for the comparable period of 1995,
exclusive of the investment valuation allowance in 1995. Operating income
at Stemmons Industrial decreased $502,000 due to lower rental revenue and
higher expenses as a result of the vacancy and lease rollover. In
addition, operating results at Waterford Apartments decreased by $52,000
due to higher operating expenses for repairs and maintenance. These
decreases were partially offset by lower depreciation and amortization
expense at Wilmington since the related assets have been fully
depreciated.
Cash flow from operations decreased by $473,000 between the first
nine months of 1996 and 1995. This decrease is primarily attributable to
the operating results at Stemmons Industrial and Waterford Apartments,
partially offset by changes in property working capital.
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 the first nine
months of 1996 and 1995 due to a decrease in the distributable cash flow.
General and administrative expenses were relatively unchanged during the
comparative nine month periods.
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 1996
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 September 30, 1996.
<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.
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
(Registrant)
November 12, 1996
/s/ Peter P. Twining
-------------------------------
Peter P. Twining.
Managing Director and General Counsel
of Managing General Partner,
Sixth Copley Corp.
November 12, 1996
/s/ Daniel C. Mackowiak
--------------------------------
Daniel C. Mackowiak
Principal Financial and Accounting
Officer of Managing General Partner,
Sixth Copley Corp.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 3342552
<SECURITIES> 1832007
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5174559
<PP&E> 24030803
<DEPRECIATION> 0
<TOTAL-ASSETS> 29205362
<CURRENT-LIABILITIES> 138226
<BONDS> 582677
0
0
<COMMON> 0
<OTHER-SE> 28484459
<TOTAL-LIABILITY-AND-EQUITY> 29205362
<SALES> 1407217
<TOTAL-REVENUES> 1607324
<CGS> 312241
<TOTAL-COSTS> 312241
<OTHER-EXPENSES> 524528
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 770555
<INCOME-TAX> 0
<INCOME-CONTINUING> 770555
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 770555
<EPS-PRIMARY> 15.64
<EPS-DILUTED> 15.64
</TABLE>
