<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, 2000 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)
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>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED MARCH 31, 2000
PART I
FINANCIAL INFORMATION
2
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
(Unaudited) (Audited)
--------------- ------------------
<S> <C> <C>
Assets
Real estate investments:
Joint venture $1,553,933 $1,595,569
Property, net 4,167,277 4,061,102
---------- ----------
5,721,210 5,656,671
Cash and cash equivalents 2,138,701 2,305,383
---------- ----------
$7,859,911 $7,962,054
========== ==========
Liabilities and Partners' Capital
Accounts payable $ 62,382 $ 75,335
Accrued management fee - 13,696
Deferred disposition fees 1,369,577 1,369,577
---------- ----------
Total liabilities 1,431,959 1,458,608
---------- ----------
Partners' capital:
Limited partners ($223.49
per unit; 160,000 units authorized;
48,788 units issued and outstanding) 6,417,496 6,492,235
General partners 10,456 11,211
---------- ----------
Total partners' capital 6,427,952 6,503,446
---------- ----------
$7,859,911 $7,962,054
========== ==========
</TABLE>
(See accompanying notes to unaudited financial statements)
3
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
2000 1999
------------ ------------
<S> <C> <C>
INVESTMENT ACTIVITY
Property rentals $ 192,500 $ 183,255
Property operating expenses (48,516) (54,451)
Depreciation and amortization (31,594) (32,851)
---------- -----------
112,390 95,953
Joint venture earnings (loss) (41,636) 51,538
---------- -----------
Total real estate activity 70,754 147,491
---------- -----------
Interest on cash equivalents 32,244 42,149
---------- -----------
Total investment activity 102,998 189,640
---------- -----------
PORTFOLIO EXPENSES
Management fee - 15,304
General and administrative 40,013 54,640
---------- -----------
40,013 69,944
---------- -----------
Net income $ 62,985 $ 119,696
========== ===========
Net income per limited
partnership unit $ 1.28 $ 2.43
========== ===========
Cash distributions per limited
partnership unit $ 2.81 $ 3.61
========== ===========
Number of limited partnership units
outstanding during the period 48,788 48,788
========== ===========
</TABLE>
(See accompanying notes to unaudited financial statements)
4
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
2000 1999
--------------------- ---------------------
General Limited General Limited
Partners Partners Partners Partners
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Balance at beginning
of period $ 11,211 $6,492,235 $ 13,832 $6,981,503
Cash distributions (1,385) (137,094) (1,779) (176,125)
Net income 630 62,355 1,197 118,499
-------- ---------- -------- ----------
Balance at end
of period $ 10,456 $6,417,496 $ 13,250 $6,923,877
======== ========== ======== ==========
</TABLE>
(See accompanying notes to unaudited financial statements)
5
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
SUMMARIZED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
2000 1999
----------- ----------
<S> <C> <C>
Net cash provided by (used in)
operating activities $ (24,567) $ 151,298
---------- ----------
Cash flows from investing activities:
Investment in property (3,636) -
---------- ----------
Net cash used in investing activities (3,636) -
---------- ----------
Cash flows from financing activity:
Distributions to partners (138,479) (177,904)
---------- ----------
Net cash used in financing activities (138,479) (177,904)
---------- ----------
Net decrease in cash and cash equivalents (166,682) (26,606)
Cash and cash equivalents:
Beginning of period 2,305,383 2,605,486
---------- ----------
End of period $2,138,701 $2,578,880
========== ==========
</TABLE>
(See accompanying notes to unaudited financial statements)
6
<PAGE>
COPLEY PENSION PROPERTIES VI;
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 March 31, 2000 and December 31, 1999 and its
operations, its cash flows and partners' capital for the three months ended
March 31, 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.
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
two 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; however, the managing general partner could
extend the investment period if it is considered to be in the best interest of
the limited partners. The Partnership has engaged AEW Real Estate Advisors, Inc.
(the "Advisor") to provide asset management advisory services.
Note 2 - Investment in Joint Venture
Summarized Financial Information
The following summarized financial information is presented in the
aggregate for the Prentiss Copystar joint venture:
7
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
Assets and Liabilities
----------------------
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
-------------- -----------------
<S> <C> <C>
Assets
Real property, at cost less
accumulated depreciation
of $436,246 and $423,431,
respectively $2,342,621 $2,355,436
Other 1,920 11,877
---------- ----------
2,344,541 2,367,313
Liabilities 92,226 73,813
---------- ----------
Net assets $2,252,315 $2,293,500
========== ==========
</TABLE>
Results of Operations
---------------------
<TABLE>
<CAPTION>
Three Months Ended March 31,
2000 1999
--------- ---------
<S> <C> <C>
Revenue:
Rental income $ - $ 121,601
--------- ---------
- 121,601
--------- ---------
Expenses:
Operating expenses 28,370 26,780
Depreciation and amortization 12,815 17,357
--------- ---------
41,185 44,137
--------- ---------
Net income (loss) $ (41,185) $ 77,464
========= =========
</TABLE>
Liabilities and expenses exclude amounts owed and attributable to the
Partnership and its affiliate on behalf of their various financing arrangements
with the joint venture.
8
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
Note 3 - Property
The following is a summary of the Partnership's remaining wholly-owned
property (Wilmington Industrial):
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
-------------- -----------------
<S> <C> <C>
Land $ 2,770,056 $ 2,770,056
Buildings, improvements and
other capitalized costs 4,911,714 4,908,078
Investment valuation allowance (1,500,000) (1,500,000)
Accumulated depreciation and
amortization (2,208,345) (2,176,751)
Net operating assets 193,852 59,719
------------- -------------
$ 4,167,277 $ 4,061,102
============= =============
</TABLE>
9
<PAGE>
COPLEY PENSION PROPERTIES VI;
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 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 and for
the payment of related acquisition costs, or retained as working capital
reserves. The Partnership made seven real estate investments; one investment was
sold in each of 1990, 1994 and 1997 and two investments were sold in 1998.
Through March 31, 2000, capital of $37,884,369 ($776.51 per limited partnership
unit) has been returned to the limited partners; $36,194,353 as a result of
sales and $1,690,016, as a result of a discretionary reduction of original
working capital previously held in reserves.
At March 31, 2000, the Partnership had $2,138,701 in cash and cash
equivalents which is being retained as working capital reserves. The source of
future liquidity and cash distributions to partners will primarily be cash
generated by the Partnership's invested cash and cash equivalents and real
estate investments, and proceeds from the sale of such investments. There were
no cash distributions made during the first quarter of 2000 due to insufficient
cash flow from the properties. One property has been vacant since September 30,
1999 and the other remaining property has had property level obligations which
has reduced its cash flow to the Partnership. Distributions of cash from
operations relating to the first quarter of 1999 were made at the annualized
rate of 5.5% based on an adjusted capital contribution of $228.20 per limited
partnership unit.
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, 2000, the appraised value of each real estate investment exceeded its
carrying value; the aggregate of such excess was approximately $2,470,000. 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 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.
10
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
Results of Operations
- ---------------------
Form of Real Estate Investments
The Wilmington Industrial investment is a wholly-owned property. The
Prentiss Copystar real estate investment is structured as a joint venture.
Operating Factors
One of the Partnership's two industrial properties, Wilmington Industrial,
was 67% leased at March 31, 2000 compared to 100% leased at March 31, 1999. The
other industrial property, Prentiss Copystar was vacant at March 31, 2000
compared to 100% leased at March 31, 1999. Subsequent to quarter end, the
Partnership negotiated a long-term lease with a single tenant, which is expected
to commence on August 1, 2000, upon completion of tenant improvements.
Investment Results
Interest income on cash equivalents decreased $9,905 between the first
quarter of 1999 and 2000 due to lower average investment balances.
Real estate operating results were $70,754 for the first three months of
2000, and $147,491 for the comparable period of 1999. The decrease of $76,737 is
primarily due to a loss in joint venture earnings as a result of Prentiss
Copystar's vacancy. Operating results from the Partnership's remaining
investment has increased by approximately $17,000 during the first three months
of 2000, compared to the first three months of 1999. The increase is primarily
due to an increase in rental income resulting from higher rental rates as well
as a decrease in expenses.
Cash flow from operations decreased by approximately $176,000 between the
first three months of 1999 and 2000. The decrease is primarily due to the
decrease in distributions from the joint venture as a result of the property
being vacant as well as an increase 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 did not incur a management fee during the three months
ended March 31, 2000 due to the suspension of cash distributions for the first
quarter of 2000 as discussed above. General and administrative expenses
decreased approximately $15,000 between the first quarter of 2000 and 1999
primarily due to lower taxes offset by an increase in investor servicing fees.
11
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED MARCH 31, 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 March 31, 2000.
12
<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)
May 9, 2000
/s/ Alison Husid Cutler
-------------------------------
Alison Husid Cutler
President, Chief Executive Officer
And Director of Managing General Partner, Sixth
Copley Corp.
May 9, 2000
/s/ Karin J. Lagerlund
--------------------------------
Karin J. Lagerlund
Principal Financial and Accounting
Officer of Managing General Partner,
Sixth Copley Corp.
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 2,138,701
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,138,701
<PP&E> 5,721,210
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,859,911
<CURRENT-LIABILITIES> 62,382
<BONDS> 1,369,577
0
0
<COMMON> 0
<OTHER-SE> 6,427,952
<TOTAL-LIABILITY-AND-EQUITY> 7,859,911
<SALES> 150,864
<TOTAL-REVENUES> 183,108
<CGS> 48,516
<TOTAL-COSTS> 48,516
<OTHER-EXPENSES> 71,607
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 62,985
<INCOME-TAX> 0
<INCOME-CONTINUING> 62,985
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 62,985
<EPS-BASIC> 1.28
<EPS-DILUTED> 1.28
</TABLE>
