<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999 Commission
File No. 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
incorporation or organization) Identification No.)
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
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of Class)
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 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
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
No voting stock is held by nonaffiliates of the Registrant.
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE>
Part I
Item 1. Business.
Copley Pension Properties VI; A Real Estate Limited Partnership (the
"Partnership") (formerly New England Pension Properties VI; A Real Estate
Limited Partnership) was organized under the Uniform Limited Partnership
Act of the Commonwealth of Massachusetts on October 16, 1987, to invest
primarily in newly constructed and existing income-producing real
properties.
The Partnership was initially capitalized with contributions of $2,000
in the aggregate from Sixth Copley Corp. (the "Managing General Partner")
and GCOP Associates Limited Partnership (the "Associate General Partner")
(collectively, the "General Partners") and $10,000 from Copley Real Estate
Advisors, Inc. (the "Initial Limited Partner"). The Partnership filed a
Registration Statement on Form S-11 (the "Registration Statement") with the
Securities and Exchange Commission on October 26, 1987, with respect to a
public offering of 80,000 units of limited partnership interest at a price
of $1,000 per unit (the "Units") with an option to sell up to an additional
80,000 Units (an aggregate of $160,000,000). The Registration Statement was
declared effective on January 20, 1988.
The first sale of Units occurred on July 28, 1988, at which time the
Initial Limited Partner withdrew its contribution from the Partnership.
Investors were admitted to the Partnership thereafter at monthly closings;
the offering terminated and the last group of subscription agreements was
accepted by the Partnership on December 31, 1988. At the termination of the
offering, a total of 48,788 Units had been sold, a total of 6,396 investors
had been admitted as limited partners (the "Limited Partners") and a total
of $48,511,620 net of discounts had been contributed to the capital of the
Partnership. The remaining 111,212 Units were de-registered on February 10,
1989.
As of December 31, 1999 the Partnership is invested in the two real
property investments described below. During 1990, a joint venture in which
the Partnership was a partner sold its interest in a third real estate
investment located in Chino Hills, California. The Partnership made a
distribution to the Limited Partners in the amount of $48.17 per Unit.
During 1994, a joint venture in which the Partnership was a partner sold
its interest in a fourth investment located in Phoenix, Arizona. The
Partnership made a distribution to the Limited Partners of $182.85 per
Unit. In 1997, the Partnership sold a fifth investment located in Farmers
Branch, Texas. The Partnership made a distribution to the Limited Partners
of $88.84 per Unit. During 1998, two joint ventures in which the
Partnership was a partner sold their respective interests in a sixth and a
seventh investment located in Petaluma, California and Frederick, Maryland,
respectively. The Partnership made distribution to the Limited Partners of
$87.72 and $334.29 per Unit, respectively. The Partnership has no current
plans to renovate, improve or further develop any of its real property
investments. In the opinion of the Managing General Partner of the
Partnership, the properties are adequately covered by insurance.
The Partnership has no employees. Services are performed for the
Partnership by the Managing General Partner and affiliates of the Managing
General Partner.
A. Industrial Building in Carson, California ("Wilmington
Industrial").
On July 18, 1988 the Partnership acquired a 60% interest in a joint
venture with an affiliate of The Hewson Company. On November 15, 1989, the
Partnership agreed to increase its maximum commitment from $6,685,000 to
$7,285,000. On February 1, 1991, the Partnership agreed to further increase
its maximum commitment to $8,085,000. The Partnership made capital
contributions totaling $7,774,402. As of December 31, 1991,
2
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because of the developer partner's inability to fund its share of capital
contributions, the Partnership assumed 100% ownership of the joint
venture's assets, which consisted primarily of approximately 5.77 acres of
land in Carson, California and an approximately 115,732 square foot
multi-tenant industrial building located thereon. As of December 31, 1999,
the building was 100% leased.
B. Industrial Building in Itasca, Illinois ("Prentiss Copystar").
On May 23, 1991, the Partnership acquired a 51.75% interest in a joint
venture formed with Copley Pension Properties VII; A Real Estate Limited
Partnership, an affiliate of the Partnership (the "Affiliate") with a
23.25% interest, and with an affiliate of Prentiss Properties, Ltd. As of
December 31, 1999, the Partnership had contributed $2,418,312 to the
capital of the joint venture, of which $63,563 had been returned to the
Partnership. Of the capital contributed and not returned, $1,602,186 is
characterized as Senior Capital and $690,000 is characterized as Junior
Capital. The joint venture agreement entitles the Partnership to receive a
preferred compounded monthly return of 11% per annum of which the return on
Senior Capital will be payable currently and the return on Junior Capital
may accrue and compound monthly if sufficient cash flow is not available
therefor. If the Senior Capital is repaid prior to the termination of the
joint venture, the Partnership will be entitled to receive a return on the
Senior Capital at the lesser of 11% per annum or the interest rate for
treasury bonds having a maturity date coinciding with the termination of
the joint venture, plus 75 basis points. The joint venture agreement also
entitles the Partnership to receive 51.75% of the net proceeds of sales and
financings after return of its capital and 51.75% of cash flow remaining
after payment of the preferred return.
The joint venture owns approximately 3.75 acres of land in Itasca,
Illinois and during 1991 completed construction thereon of an approximately
70,535 square foot single-story industrial building. At December 31, 1999,
the building was vacant. The Partnership is currently negotiating a long
term lease with a single tenant.
3
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Item 2. Properties
The following table sets forth the annual realty taxes for the
Partnership's properties and information regarding tenants who occupy 10% or
more of gross leasable area (GLA) in the Partnership's properties:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Number
of
Estimated Tenants Annual
2000 with 10% Contract Line of
Annual or Square Rent Business
Realty More of Names (s) of Feet of per Lease Renewal of Principal
Property Taxes GLA Tenant(s) Each Tenant Sq. Ft. Expiration Options Tenants
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Industrial Building in $69,925 4 Practical Packaging 57,183 $5.04 Mar, 2001 N/A Packaging
Carson, CA
Del Monte 26,545 $5.42 Dec, 1999 Two 5 year Fruit and Fruit
Products
Continental Wire 11,682 $4.49 Dec, 1999 N/A Wire Fabrication
Haagen-Dazs 12,000 $6.48 June, 2001 N/A Ice Cream
Industrial Building, $74,605 0 N/A 70,535 -- N/A
Itasca, IL
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
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The following table sets forth for each of the last five years the gross
leasable area, occupancy rates, rental revenue, and net effective rent for the
Partnership's properties:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Rental
PROPERTY Gross Leasable Year-End Revenue Net Effective
Area Occupancy Recognized Rent ($/sf/yr)*
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Industrial Building in Carson, CA
1995 115,732 89% $620,300 $6.58
1996 115,732 100% $709,199 $7.08
1997 115,732 100% $752,941 $6.51
1998 115,732 100% $726,314 $6.28
1999 115,732 100% $761,603 $6.58
Industrial Building, Itasca, IL
1995 70,535 100% $479,000 $6.79
1996 70,535 100% $492,000 $6.98
1997 70,535 100% $462,000 $6.55
1998 70,535 100% $468,095 $6.64
1999 70,535 0% $367,942 $6.96
- ------------------------------------------------------------------------------------------------------------
</TABLE>
* Net effective rent calculation is based on average occupancy during the
respective years.
5
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Following is a schedule of lease expirations for each of the next ten years
for the Partnership's properties based on the annual contract rent in effect at
December 31, 1999:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
TENANT AGING REPORT
Property # of Lease Total Total Percentage of
Expirations Square Feet Annual Rental Gross Annual
Rental*
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Industrial Building in Carson, CA
2000 0 0 $0 0%
2001 3 77,475 $412,729 100%
2002 0 0 $0 0%
2003 0 0 $0 0%
2004 0 0 $0 0%
2005 0 0 $0 0%
2006 0 0 $0 0%
2007 0 0 $0 0%
2008 0 0 $0 0%
2009 0 0 $0 0%
Industrial Building, Itasca, IL
2000 0 0 $0 0%
2001 0 0 $0 0%
2002 0 0 $0 0%
2003 0 0 $0 0%
2004 0 0 $0 0%
2005 0 0 $0 0%
2006 0 0 $0 0%
2007 0 0 $0 0%
2008 0 0 $0 0%
2009 0 0 $0 0%
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
o Does not include expenses paid by tenants.
6
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The following table sets forth for each of the Partnership's properties
the: (i) federal tax basis, (ii) rate of depreciation, (iii) method of
depreciation, (iv) life claimed for purposes of depreciation, and (v)
accumulated depreciation.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Rate of Life Accumulated
Entity / Property Tax Basis Depreciation Method in years Depreciation
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Industrial Building in Carson, CA
Building & Improvements $3,733,428 2.50% SL 40 $927,100
----------- ----------
Total Depreciable Assets $3,733,428 $927,100
Industrial Building in Itasca, IL
Building $ 2,121,478 2.50% SL 40 $439,154
----------- ----------
Total Depreciable Assets $2,121,478 $439,154
Total Depreciable Assets $5,854,906 $1,366,254
=========== ==========
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
SL = Straight Line
7
<PAGE>
Following is information regarding the competitive market conditions for
each of the Partnership's properties. This information has been gathered from
sources deemed reliable. However, the Partnership has not independently verified
the information and, as such, cannot guarantee its accuracy or completeness:
Industrial Building in Carson, California
The property is located in the South Bay sub-market, within the greater Los
Angeles industrial market. The South Bay sub-market, with 3,972 industrial
buildings totaling approximately 204 million square feet, represents
approximately 24% of the total Los Angeles industrial market. Leasing activity
in 1999 in the South Bay industrial market totaled 11 million square feet,
approximately 8% lower than in 1998, and the vacancy rate dipped to 4.7% at
year-end, compared to 5.5% in 1998.
Industrial Building in Itasca, Illinois
The Metropolitan Chicago Industrial Market contains approximately 933 million
square feet of inventory with a year-end 1999 vacancy rate of 8.0%, an increase
from the 6.9% vacancy at year-end 1998. Currently, there is more than 3.2
million square feet of inventory under construction and an additional 8.5
million square feet proposed. Due to the scarcity of land located close to our
property, new construction has moved out, mainly west and south along the I-55
and I-80 corridors. The availability of new competitively priced product will
limit the growth of rental rates, but more so in the outlying markets with ample
land available for development. The property is located in the North DuPage
County submarket. Most tenants in this submarket rely on close proximity to the
O'Hare International Airport, and to convenient access to interstates 355, 290,
90, and the Elgin-O'Hare Expressway.
Item 3. Legal Proceedings.
The Partnership is not a party to, nor are any of its properties subject
to, any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this Annual Report on Form 10-K.
8
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PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
There is no active market for the Units. Trading in the Units is sporadic
and occurs solely through private transactions.
As of December 31, 1999, there were 6,308 holders of Units.
The Partnership's Amended and Restated Agreement of Limited Partnership
dated July 28, 1988, as amended to date (the "Partnership Agreement"), requires
that any Distributable Cash (as defined therein) be distributed quarterly to the
partners in specified proportions and priorities. There are no restrictions on
the Partnership's present or future ability to make distributions of
Distributable Cash. For the year ended December 31, 1999 cash distributions paid
in 1999 or distributed after year end with respect to 1999 to the Limited
Partners as a group totaled $821,319. For the year ended December 31, 1998, cash
distributions paid in 1998 or distributed after year end with respect to 1998 to
the Limited Partners as a group totaled $22,855,715, including $20,589,024 of
returned capital from the proceeds of joint venture sales and $491,783 of
returned capital from original working capital reserves.
Cash distributions exceeded net income in 1999 and 1998 and therefore
resulted in a reduction of partners' capital. Cash distributions in 1999 and
1998 exceeded cash provided by operating activities. Reference is made to the
Partnership's Statements of Partners' Capital (Deficit) and Statements of Cash
Flows in Item 8 hereof.
9
<PAGE>
Item 6. Selected Financial Data.
<TABLE>
<CAPTION>
For Year For Year For Year For Year For Year
Ended or Ended or Ended or Ended or Ended or
as of : as of : as of : as of : as of :
12/31/99 12/31/98 (1) 12/31/97 (2) 12/31/96 12/31/95 (3)
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $ 992,399 $ 9,098,258 $ 2,688,336 $ 2,250,424 $ 2,662,452
Net Income (Loss) $ 365,739 $ 8,384,390 $ 1,588,309 $ 1,186,133 $ (206,204)
Net Income (Loss)
per Limited
Partnership Unit $ 7.42 $ 170.13 $ 32.23 $ 24.07 $ (4.18)
Total Assets $ 7,962,054 $ 8,497,702 $ 22,706,302 $ 29,099,680 $ 30,094,908
Total Cash
Distributions
per Limited
Partnership
Unit, including
amounts
distributed
after year end
with respect to
such year $ 16.65 $ 468.47 $ 166.26 $ 42.28 $ 50.00
</TABLE>
(1) Revenues and net income in 1998 include a gain $7,563,334 on the sales of
the White Phonic and Waterford Apartments investments.
(2) Revenues and net income in 1997 include a gain of $248,172 on the sale of
the Stemmons Industrial property.
(3) Net loss in 1995 includes a provision of $1,500,000 to recognize the
impairment of a real estate investment.
10
<PAGE>
Item 7.
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 December 1988 and 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 or retained as working capital reserves. The
Partnership currently holds the two investments described in A. and B. of Item 1
hereof. In addition, one investment was sold in each of 1990, 1994 and 1997 and
two investments were sold in 1998. Through December 31, 1999, 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.
On August 7, 1998, the Waterford Apartments, in Frederick, Maryland, which
was owned by the Partnership (75%) and an affiliate (25%), was sold to an
institutional buyer which is unaffiliated with the Partnership. The Partnership
received its share of the net proceeds totaling $16,338,750, after closing
costs, and recognized a gain of $6,227,526 ($126.37 per Limited Partnership
Unit). A disposition fee of $490,500 was accrued but not paid to AEW Real Estate
Advisors, Inc. (the "Advisor"). On August 26, 1998, the Partnership made a
capital distribution of $16,309,341 ($334.29 per Limited Partnership Unit) from
the proceeds of the sale.
On July 14, 1998, a joint venture in which the Partnership held a 50%
interest sold the White Phonic property in Petaluma, Cafifornia, to an
unaffiliated third party for a total gross sale price of $5,380,000. The
Partnership received its share of the net proceeds of $4,279,751 after closing
costs, representing a return of capital and accrued interest plus its
participation in net sales proceeds of $965,671 and recognized a gain of
$1,335,808 ($27.06 per Limited Partnership Unit). A disposition fee of $161,400
was accrued but not paid to the Advisor. On July 30, 1998, the Partnership made
a capital distribution of $4,279,683 ($87.72 per limited partnership unit) from
the proceeds of the sale.
At December 31, 1999, the Partnership had $2,305,383 in cash and cash
equivalents, of which $138,479 was used for cash distributions to partners on
January 27, 2000; the remainder is being retained as working capital reserves.
The source of future liquidity and cash distributions to partners will be
primarily cash generated by the Partnership's cash and cash equivalents and real
estate investments. Based on an adjusted capital contribution of $228.20 per
Limited Partnership Unit, distributions of cash from operations relating to the
first and second quarters of 1999 were made at the annualized rate of 5.5%,
while operating distributions related to the third and fourth quarters of 1999
were made at the annualized rate of 5.0%. Distributions of cash from operations
relating to the first and second quarters of 1998 were made at an annualized
rate of 6.25% on the adjusted capital contribution. Distributions of cash from
operations relating to the third and fourth quarters of 1998 were made at an
annualized rate of 6.25% on the weighted average adjusted capital contribution,
which was adjusted due to the mid-quarter sales of White Phonic and Waterford
Apartments as well as a distribution of original working capital during the
fourth quarter of 1998. Also during the fourth quarter of 1998, a distribution
of $4.76 per Limited Partnership Unit was made from operational cash previously
held in reserves.
The carrying value of real estate investments in the financial statements
at December 31, 1999 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.
11
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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 December 31, 1999, the appraised value of each
of the Partnership's real estate investments exceeded their related carrying
value by an aggregate of approximately $2,446,000. 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.
Results of Operations
Form of Real Estate Investments
The Wilmington Industrial investment is a wholly-owned property and
Prentiss Copystar investment is a joint venture.
Operating Factors
One of the Partnership's two industrial properties, Wilmington Industrial
was 100% leased at December 31, 1999 and December 31, 1998, respectively,
whereas the other industrial property, Prentiss Copystar, was vacant at December
31, 1999 and 100% leased at December 31, 1998. The Partnership is currently
negotiating a long term lease with a single tenant.
As discussed above, the White Phonic industrial property was sold on July
14, 1998, and the Partnership recognized a gain of $1,335,808. At the time of
the sale, White Phonic was 100% leased to a single tenant, as it had been since
September 30, 1997.
In addition, the Waterford Apartments was sold on August 7, 1998, and the
Partnership recognized a gain of $6,227,526. At the time of the sale, the
Waterford Apartments was 96% leased. At December 31, 1997 it was 93% leased.
Investment Activity
Interest income on cash equivalents and short-term investments in 1999
decreased by approximately $81,000 or 37% compared to 1998 due primarily to
lower average investment balances as a result of the sale of investments.
Interest income on cash equivalents and short-term investments decreased in 1998
by approximately $56,000 compared to 1997 due primarily to lower average
investment balances as a result of the sale of investments.
1999 Compared to 1998
Total real estate operations for 1999 was $457,162, a decrease from
$962,716 for the comparable period of 1998. The decrease of approximately
$500,000 or 53% is primarily due to lower joint venture earnings as a result of
the sale of White Phonic and Waterford Apartments in 1998 and the vacancy at
Prentiss Copystar during the last three months of 1999.
The decrease in operating cash flow of approximately $1,166,000 between
1998 and 1999 is primarily due to the decrease in distributions from joint
ventures as a result of sales, which is offset by a decrease in working capital.
12
<PAGE>
1998 Compared to 1997
Exclusive of net losses from operations from Stemmons Industrial of
($172,798) in 1997, total real estate operations for 1998 was $962,716, a
decrease from $1,698,187 for the comparable period of 1997. The decrease of
approximately $735,000 or 43% is primarily due to lower joint venture earnings
as a result of the sale of White Phonic and Waterford Apartments.
The decrease in operating cash flow of approximately $330,000 between 1997
and 1998 is primarily due to the decrease in distributions from joint ventures
as a result of sales and increases in 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.
1999 Compared to 1998
The Partnership management fee decreased approximately $119,000 between
1999 and 1998 due to less operational cash available for distributions as a
result of the sales of White Phonic and Waterford Apartments in 1998. General
and administrative expenses decreased approximately $12,000 or 6% primarily due
to a decrease in legal fees incurred in 1998.
1998 Compared to 1997
The Partnership management fee decreased approximately $103,000 between
1998 and 1997 due to less operational cash available for distributions as a
result of the sale of Stemmons Industrial in 1997, and the sales of White Phonic
and Waterford Apartments in 1998. General and administrative expenses increased
approximately $3,500 or 2% primarily due to an increase in investor servicing
fees in 1998.
Inflation
By their nature, real estate investments tend not to be adversely affected
by inflation. Inflation may result in appreciation in the value of real estate
investments over time if rental rates and replacement costs increase. Declines
in property values during the period of Partnership operations, due to market
and economic conditions, have overshadowed the positive affect inflation may
have on the value of the Partnership's investments.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The Partnership was not party to derivative financial instruments or
derivative commodity instruments at or during the year ended December 31, 1999.
The Partnership's only other financial instruments (as defined by Financial
Accounting Standards Board Statement No. 107) are its cash and cash equivalents
for which cost approximates market value.
Item 8. Financial Statements and Supplementary Data.
The independent auditor's reports, financial statements and financial
statement schedule listed in the accompanying index are filed as part of this
report. See Index to the Financial Statements and Financial Statement Schedules
on page 19.
13
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Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
The Partnership has had no disagreements with its accountants on any
matters of accounting principles or practices or financial statement disclosure.
PART III
Item 10. Directors and Executive Officers of the Registrant.
(a) and (b) Identification of Directors and Executive Officers.
The following table sets forth the names of the directors and executive
officers of the Managing General Partner and the age and position held by each
of them as of December 31, 1999.
<TABLE>
<CAPTION>
Name Position(s) with the Managing General Partner Age
- ---- --------------------------------------------- ---
<S> <C> <C>
Alison Husid Cutler President, Chief Executive Officer and Director 37
Pamela J. Herbst Vice President and Director 44
J. Grant Monahon Vice President 54
James J. Finnegan Vice President 39
Karin J. Lagerlund Treasurer and Principal Financial and Accounting Officer 35
</TABLE>
(c) Identification of Certain Significant Employees.
None.
(d) Family Relationships.
None.
(e) Business Experience.
The Managing General Partner was incorporated in Massachusetts on October
13, 1987. The background and experience of the executive officers and directors
of the Managing General Partner are as follows:
Alison Husid Cutler is a Portfolio Manager in AEW Institutional Real Estate
Services, with responsibility for several real estate equity portfolios
representing approximately $800 million in client capital. She has over 12 years
of experience in real estate finance and investment management. Ms. Cutler
joined the predecessor of AEW Capital Management, L.P. ("AEW Capital
Management") in 1987 as Controller for a portfolio management team responsible
for the acquisition, management, restructuring and disposition of client assets
in New England and the western U.S. She later served as Asset Manager for a
portfolio of assets in Arizona and the West Coast. Prior to joining AEW, Ms.
Cutler worked for several years as a Senior Auditor with Peat Marwick, Main &
Co. She is a Certified Public Accountant and a graduate of the University of
Massachusetts (B.A.).
Pamela J. Herbst directs AEW Capital Management, L.P.'s ("AEW Capital
Management") Institutional Real Estate Services, with oversight responsibility
for the direct equity investing and asset and portfolio management of existing
core and core-plus commingled funds and separate accounts. Ms. Herbst is a
member of AEW Capital Management's Investment Policy Group and Operating
Committee. She came to AEW Capital Management in December 1996 as a result of
the firm's merger with Copley Real Estate
14
<PAGE>
Advisors, Inc. where she held various senior level positions in asset and
portfolio management, acquisitions and corporate operations since 1982. Ms.
Herbst is a graduate of the University of Massachusetts (B.A.) and Boston
University (M.B.A.).
J. Grant Monahon is AEW Capital Management's Chief Operating Officer and a
member of the firm's Management Committee and Investment Policy Group. He has
over 25 years of experience in real estate law and investments. Prior to joining
the predecessor of AEW Capital Management in 1987, Mr. Monahon was a partner
with a major Boston law firm. As the head of that firm's real estate finance
department, he represented a wide variety of institutional clients, both
domestic and international, in complex equity and debt transactions. He is the
former Chairman of the General Counsel section of the National Association of
Real Estate Investment Managers. Mr. Monahon is a graduate of Dartmouth College
(B.A.) and Georgetown University Law Center (J.D.).
James J. Finnegan is the General Counsel of AEW Capital Management. Mr. Finnegan
served as Vice President and Assistant General Counsel of Aldrich, Eastman &
Waltch, L.P., a predecessor to AEW Capital Management. Mr. Finnegan has over ten
years of experience in real estate law, including seven years of experience in
private practice with major New York City and Boston law firms. Mr. Finnegan
also serves as AEW's securities and regulatory compliance officer. Mr. Finnegan
is a graduate of the University of Vermont (B.A.) and Fordham University School
of law (J.D.).
Karin J. Lagerlund directs the Institutional Real Estate Services Portfolio
Accounting Group at AEW Capital Management, overseeing portfolio accounting,
performance measurement and client financial reporting for AEW's private equity
investment portfolios. Ms. Lagerlund is a Certified Public Accountant and has
over ten years experience in real estate consulting and accounting. Prior to
joining AEW Capital Management in 1994, she was an Audit Manager at EY/Kenneth
Leventhal LLP. Ms. Lagerlund is a graduate of Washington State University
(B.A.).
(f) Involvement in Certain Legal Proceedings.
None.
Item 11. Executive Compensation.
Under the Partnership Agreement, the General Partners and their affiliates
are entitled to receive various fees, commissions, cash distributions,
allocations of taxable income or loss and expense reimbursements from the
Partnership. See Notes 1, 2 and 6 of Notes to Financial Statements.
The following table sets forth the amounts of the fees and cash
distributions and reimbursements for out-of-pocket expenses which the
Partnership paid to or accrued for the account of the General Partners and their
affiliates for the year ended December 31, 1999:
<TABLE>
<CAPTION>
Amount of
Compensation
and
Receiving Entity Type of Compensation Reimbursement
- ---------------- -------------------- -------------
<S> <C> <C>
General Partners Share of Distributable Cash $5,884
AEW Real Estate Advisors, Inc. Management Fees and 75,195
Expense Reimbursements
New England Securities Corporation Servicing Fees and 11,187
---------
Expense Reimbursement
TOTAL: $ 92,266
=========
</TABLE>
15
<PAGE>
For the year ended December 31, 1999, the Partnership allocated $4,624 of
taxable income to the General Partners.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
(a) Security Ownership of Certain Beneficial Owners
No person or group is known by the Partnership to be the beneficial owner
of more than 5% of the outstanding Units at December 31, 1999. Under the
Partnership Agreement, the voting rights of the Limited Partners are limited
and, in some circumstances, are subject to the prior receipt of certain opinions
of counsel or judicial decisions.
Except as expressly provided in the Partnership Agreement, the right to
manage the business of the Partnership is vested exclusively in the Managing
General Partner.
(b) Security Ownership of Management.
The General Partners of the Partnership owned no Units at December 31, 1999.
(c) Changes in Control.
There exists no arrangement known to the Partnership the operation of which
may at a subsequent date result in a change in control of the Partnership.
Item 13. Certain Relationships and Related Transactions.
The Partnership has no relationships or transactions to report other than
as reported in Item 11, above.
16
<PAGE>
PART IV
Item 14. Exhibits, Financial Statements, and Reports on Form 8-K.
(a) The following documents are filed as part of this report:
(1) Financial Statements -- The Financial Statements listed on the
accompanying Index to Financial Statements and Schedule, and Financial
Statements Index No. 2 are filed as part of this Annual Report.
(2) Financial Statement Schedules -- The Financial Statement Schedule
listed on the accompanying Index to Financial Statements and Schedule is
filed as part of this Annual Report.
(3) Exhibits -- The Exhibits listed in the accompanying Exhibit Index
are filed as a part of this Annual Report and incorporated in this Annual
Report as set forth in said Index.
(b) Reports on Form 8-K. During the last quarter of the year ended
December 31, 1999, the Partnership filed no Current Report on Form
8-K.
17
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
Financial Statements
* * * * * * * * * * * *
December 31, 1999
18
<PAGE>
COPLEY PENSION PROPERTIES VI
A REAL ESTATE LIMITED PARTNERSHIP
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
Report of Independent Accountants
Financial Statements:
Balance Sheets - December 31, 1999 and 1998
Statements of Operations - Years ended December 31, 1999, 1998 and 1997
Statements of Partners' Capital (Deficit) - Years ended December 31, 1999,
1998 and 1997
Statements of Cash Flows - Years ended December 31, 1999, 1998 and 1997
Notes to Financial Statements
Financial Statement Schedule:
Schedule III - Real Estate and Accumulated Depreciation at December 31,
1999
All other schedules are omitted because they are not applicable
19
<PAGE>
Report of Independent Accountants
To the Partners of Copley Pension Properties VI; A Real Estate Limited
Partnership:
In our opinion, the financial statements listed in the accompanying index
present fairly, in all material respects, the financial position of Copley
Pension Properties VI; A Real Estate Limited Partnership (the "Partnership") at
December 31, 1999 and 1998, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1999 in conformity
with accounting principles generally accepted in the United States. In addition,
in our opinion, the financial statement schedule listed in the accompanying
index presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related financial statements. These
financial statements and the financial statement schedule are the responsibility
of Sixth Copley Corp., the Managing General Partner of the Partnership (the
"Managing General Partner"); our responsibility is to express an opinion on
these financial statements and the financial statement schedule based on our
audits. We conducted our audits of these statements in accordance with auditing
standards generally accepted in the United States, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by the Managing General Partner, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
Boston, Massachusetts
March 21, 2000
20
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
------------------------
1999 1998
---------- ----------
<S> <C> <C>
Assets
Real estate investments:
Joint ventures $1,595,569 $1,649,433
Property, net 4,061,102 4,242,783
---------- ----------
5,656,671 5,892,216
Cash and cash equivalents 2,305,383 2,605,486
---------- ----------
$7,962,054 $8,497,702
========== ==========
Liabilities and Partners' Capital
Accounts payable $ 75,335 $ 115,195
Accrued management fee 13,696 17,595
Deferred disposition fees 1,369,577 1,369,577
---------- ----------
Total liabilities 1,458,608 1,502,367
---------- ----------
Partners' capital:
Limited partners ($224.87 and $228.20 per
Unit, respectively; 160,000 units authorized;
48,788 units issued and outstanding) 6,492,235 6,981,503
General partners 11,211 13,832
---------- ----------
Total partners' capital 6,503,446 6,995,335
---------- ----------
$7,962,054 $8,497,702
========== ==========
</TABLE>
(See accompanying notes to financial statements)
21
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Investment Activity
Property rentals $ 726,612 $ 729,877 $ 813,691
Property operating expenses (268,902) (216,377) (374,736)
Depreciation and amortization (128,053) (136,912) (264,913)
----------- ----------- -----------
329,657 376,588 174,042
Joint venture earnings 127,505 586,128 1,351,347
----------- ----------- -----------
Total real estate operations 457,162 962,716 1,525,389
Gain on sales of property -- 7,563,334 248,172
----------- ----------- -----------
Total real estate activity 457,162 8,526,050 1,773,561
Interest on cash equivalents
and short-term investments 138,282 218,919 275,126
----------- ----------- -----------
Total investment activity 595,444 8,744,969 2,048,687
----------- ----------- -----------
Portfolio Expenses
Management fee 58,195 177,313 280,592
General and administrative 171,510 183,266 179,786
----------- ----------- -----------
229,705 360,579 460,378
----------- ----------- -----------
Net Income $ 365,739 $ 8,384,390 $ 1,588,309
=========== =========== ===========
Net income per limited
partnership unit $ 7.42 $ 170.13 $ 32.23
=========== =========== ===========
Cash distributions per limited
partnership unit $ 17.45 $ 475.74 $ 165.95
=========== =========== ===========
Number of limited partnership
units outstanding during the year 48,788 48,788 48,788
=========== =========== ===========
</TABLE>
(See accompanying notes to financial statements)
22
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
<TABLE>
<CAPTION>
Year ended December 31,
---------------------------------------------------------------------------------------------
1999 1998 1997
----------------------------- ----------------------------- -----------------------------
General Limited General Limited General Limited
Partners Partners Partners Partners Partners Partners
------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at beginning
of year $ 13,832 $ 6,981,503 $ (48,500) $ 21,891,360 $ (36,164) $ 28,415,303
Cash distributions (6,278) (851,350) (21,512) (23,210,403) (28,219) (8,096,369)
Net income 3,657 362,082 83,844 8,300,546 15,883 1,572,426
------------ ------------ ------------ ------------ ------------ -------------
Balance at end
of year $ 11,211 $ 6,492,235 $ 13,832 $ 6,981,503 $ (48,500) $ 21,891,360
============ ============ ============ ============ ============ =============
</TABLE>
(See accompanying notes to financial statements)
23
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 365,739 $ 8,384,390 $ 1,588,309
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 128,053 136,912 264,913
Equity in joint venture income (127,505) (586,128) (1,351,347)
Cash distributions from joint ventures 184,210 1,511,850 1,849,700
Gain on sales of joint ventures -- (7,563,334) (248,172)
Increase in property deferred leasing costs
and other assets (4,860) (8,577) (556)
(Increase) decrease in investment income
receivable -- 27,032 (1,152)
Increase in property working capital 58,488 (162,397) (52,369)
Increase (decrease) in operating liabilities (43,759) (12,975) 7,903
------------ ------------ ------------
Net cash provided by operating activities 560,366 1,726,773 2,057,229
------------ ------------ ------------
Cash flows from investing activities:
Investment in joint venture (2,841) -- --
Net proceeds from sale of investment -- 19,947,381 4,199,193
Deferred disposition fee -- 651,900 135,000
Decrease in short-term
investments, net -- 1,405,619 762,791
------------ ------------ ------------
Net cash provided (used) by
investing activities (2,841) 22,004,900 5,096,984
------------ ------------ ------------
Cash flows from financing activity:
Distributions to partners (857,628) (23,231,915) (8,124,588)
------------ ------------ ------------
Net cash used in financing activity (857,628) (23,231,915) (8,124,588)
------------ ------------ ------------
Net increase (decrease) in cash and
cash equivalents (300,103) 499,758 (970,375)
Cash and cash equivalents:
Beginning of year 2,605,486 2,105,728 3,076,103
------------ ------------ ------------
End of year $ 2,305,383 $ 2,605,486 $ 2,105,728
============ ============ ============
</TABLE>
(See accompanying notes to financial statements)
24
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
Note 1 - Organization and Business
General
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.
The Managing General Partner of the Partnership is Sixth Copley Corp., a
wholly-owned subsidiary of AEW Real Estate Advisors, Inc. ("AEW"), formerly
known as Copley Real Estate Advisors, Inc. ("Copley"). The associate general
partner is GCOP Associates Limited Partnership, a Massachusetts limited
partnership. Subject to the Managing General Partner's overall authority, the
business of the Partnership is managed by AEW pursuant to an advisory contract.
On December 10, 1996, Copley's parent, New England Investment Companies,
Limited Partnership ("NEIC") a publicly traded master limited partnership,
acquired certain assets subject to then existing liabilities from Aldrich,
Eastman & Waltch, Inc. and its affiliates and principals (collectively, "the AEW
operations"). Simultaneously, a new entity, AEW Capital Management, L.P., was
formed into which NEIC contributed its interest in Copley and its affiliates. As
a result, the AEW operations were combined with Copley to form the business
operations of AEW Capital Management, L.P. At year end 1997, NEIC completed a
restructuring plan under which it contributed all of its operations to a newly
formed private partnership, NEIC Operating Partnership, L.P., in exchange for a
general partnership interest in the newly formed entity. Accordingly, at
December 31, 1997, AEW Capital Management, L.P. was wholly owned by NEIC
Operating Partnership, L.P. AEW is a subsidiary of AEW Capital Management, L.P.
Effective April 1, 1998, NEIC changed its name to Nvest, L.P. and NEIC Operating
Partnership, L.P. changed its name to Nvest Companies, L.P.
Prior to August 30, 1996, New England Mutual Life Insurance Company ("The
New England") was NEIC's principal unit holder and owner of all of the
outstanding stock of NEIC's general partner. On August 30, 1996, The New England
merged with and into Metropolitan Life Insurance Company ("Met Life"). Met Life
is the surviving entity and, therefore, through a wholly owned subsidiary,
became the owner of the units of partnership interest previously owned by The
New England and of the stock of NEIC's general partner.
Management
AEW, as advisor, is entitled to receive stipulated fees from the
Partnership in consideration of services performed in connection with the
management of the Partnership and the acquisition and disposition of Partnership
investments in real property. Partnership management fees are 9% of
distributable cash from operations, as defined, before deducting such fees. The
deferred management fees of $112,441 incurred through 1990 were paid to AEW in
September 1994 with a portion of the proceeds from the sale of Lakewood
Apartments. AEW is also reimbursed for expenses incurred in connection with
administering the Partnership ($17,000 in 1999, $17,000 in 1998, and $17,026 in
1997). Acquisition fees were paid in an amount equal to 2% of the gross proceeds
from the offering, at the time commitments were initially funded. Disposition
fees are limited to the lesser of 3% of the selling price of the property, or
50% of the standard real estate commission customarily charged by an independent
real estate broker. Payments of disposition fees are subject to the prior
receipt by the limited partners of their capital contributions plus a stipulated
return thereon. Deferred disposition fees were $1,369,577 at December 31, 1999
and 1998.
New England Securities Corporation ("NESC"), an indirect subsidiary of Met
Life, is engaged by the Partnership to act as its unit holder servicing agent.
Fees and out-of-pocket expenses for such services totaled $11,187, $10,287 and
$9,669 in 1999, 1998 and 1997, respectively. Fees to Back Bay Advisors, L.P., a
wholly-owned subsidiary of Nvest Companies, L.P., for short-term investment
advisory services totaled $0, $0 and $5,200, for the same annual periods.
25
<PAGE>
Note 2 - Summary of Significant Accounting Policies
Accounting Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Managing General Partner to make
estimates affecting the reported amounts of assets and liabilities, and of
revenues and expenses. In the Partnership's business, certain estimates require
an assessment of factors not within management's control, such as the ability of
tenants to perform under long-term leases and the ability of the properties to
sustain their occupancies in changing markets. Actual results, therefore, could
differ from those estimates.
Real Estate Joint Ventures
Investments in joint ventures including loans, which are in substance real
estate investments, are stated at cost plus (minus) equity in undistributed
joint venture income (losses). Allocations of joint venture income (losses) were
made to the Partnership's venture partners as long as they had substantial
economic equity in the project. Economic equity is measured by the excess of the
appraised value of the property over the Partnership's total cash investment
plus accrued preferential returns thereon. The Partnership recorded an amount
equal to 100% of the operating results of each joint venture, after the
elimination of all inter-entity transactions, except for the venture which
includes an affiliate of the Partnership, which has substantial economic equity
in its project.
Property
Property includes land and buildings, which are stated at cost less
accumulated depreciation, and other operating net assets (liabilities). The
Partnership's initial carrying value of a property previously owned by a joint
venture equals the Partnership's carrying value of the prior investment on the
conversion date.
Capitalized Costs, Depreciation and Amortization
Maintenance and repair costs are expensed as incurred. Significant
improvements and renewals are capitalized. Depreciation is computed using the
straight-line method based on estimated useful lives of the buildings and
improvements. Leasing costs are also capitalized and amortized over the related
lease term.
Acquisition fees have been capitalized as part of the cost of real estate
investments. Amounts not related to land are being amortized using the
straight-line method over the estimated useful lives of the underlying property.
Certain tenant leases provide for rental increases over the respective
lease terms. Rental revenue is being recognized on a straight-line basis over
the lease terms.
Realizability of Real Estate Investments
The Partnership considers a real estate investment to be impaired when it
determines the carrying value of the investment is not recoverable through
expected undiscounted cash flows generated from the operations and disposition
of the property. The impairment loss is based on the excess of the investment's
carrying value over its estimated fair market value. For investments held for
sale, the impairment loss also includes estimated costs of sale. Property held
for sale is not depreciated during the holding period. Investments are
considered to be held for disposition at the time management commits the
Partnership to a plan to dispose of the investment.
Cash Equivalents
Cash equivalents are stated at cost, plus accrued interest. The Partnership
considers all highly liquid instruments purchased with a maturity of ninety days
or less to be cash equivalents; otherwise, they are classified as short-term
investments.
Deferred Disposition Fees
Disposition fees due to AEW related to sales of investments are included in
the determination of gains or losses resulting from such transactions. According
to the terms of the advisory contract, payment of such fees has been deferred
until the limited partners first receive their capital contributions, plus
stipulated returns thereon.
26
<PAGE>
Income Taxes
A partnership is not liable for income taxes and, therefore, no provision
for income taxes is made in the financial statements of the Partnership. A
proportionate share of the Partnership's income is reportable on each partner's
tax return.
Per Unit Computations
Per unit computations are based on the number of units of limited
partnership interest outstanding during the year. The actual per unit amount
will vary by partner depending on the date of admission to, or withdrawal from,
the Partnership.
Segment Data
Effective January 1, 1998, the Partnership adopted Financial Accounting
Standards Board Statement No. 131, "Disclosure about Segments on an Enterprise
and Related Information" (FAS 131). Based on the criteria established in FAS
131, the Managing General Partner has determined that the Partnership operates
in one operating segment: investing in real estate properties which are
domiciled in the United States of America.
Note 3 - Real Estate Joint Ventures
The Partnership had invested in seven real estate joint ventures, organized
as general partnerships with a real estate management/development firm and, in
three cases, with an affiliate of the Partnership. One joint venture sold its
property in 1990; another joint venture investment was restructured into a
wholly-owned property in 1991. During 1994, the Lakewood joint venture sold its
property and the Stemmons Industrial investment was converted to a wholly-owned
property; the latter property was subsequently sold in 1997. In 1998, the White
Phonic and Waterford Apartments joint ventures sold their properties in July and
August, respectively. The Partnership committed to make capital contributions to
the ventures, which are or were generally subject to preferential cash
distributions at a specified rate and to priority distributions with respect to
sale or refinancing proceeds. The joint venture agreements provide or provided,
as the case may be, for the funding of cash flow deficits by the venture
partners in proportion to ownership interests, and for the dilution of their
ownership share in the event a venture partner does not contribute
proportionately.
The respective real estate management/development firm is responsible for
day-to-day development and operating activities, although overall authority and
responsibility for the business is shared by the venturers. The real estate
management/development firm, or its affiliates, also provides or provided, as
the case may be, various services to the respective joint venture for a fee.
The following is a summary of cash invested in joint ventures, net of
returns of capital and excluding acquisition fees:
<TABLE>
<CAPTION>
Preferential
Investment/ Rate of Ownership December 31,
Location Return Interest 1999 1998
-------- ------ -------- ----------- -----------
<S> <C> <C> <C> <C>
Prentiss Copystar
Itasca, IL 11.0% 51.75% $ 2,292,186 $ 2,232,848
</TABLE>
Waterford Apartments
On March 20, 1989, the Partnership entered into a joint venture with an
affiliate of Bozzuto and Associates, and with an affiliate of the Partnership,
to develop and operate a garden-style apartment complex. The Partnership and its
affiliate collectively had a 65% ownership interest in the joint venture. The
Partnership committed to contribute up to $14,100,000 to the capital of the
joint venture. The preferential return related to $3,525,000 was payable
currently only to the extent of available cash flow. In the event of a sale or
refinancing prior to the tenth anniversary of the joint venture agreement, 25%
of the Partnership's contribution would be repaid without premium. The remaining
75% would be entitled to a premium designed to preserve the stipulated rate of
return through the ninth anniversary of the joint venture agreement.
On August 7, 1998, the joint venture sold the Waterford Apartments to an
institutional buyer which is unaffiliated with the Partnership. The total gross
sale price was $21,800,000. The Partnership received its share of the net
proceeds in the amount of $16,338,750, after closing costs, and recognized a
gain of $6,227,526 ($126.37 per Limited Partnership Unit). A disposition fee of
$490,500 was accrued but not paid to AEW Real Estate Advisors, Inc. On August
26, 1998, the Partnership made a capital distribution of $16,309,341 ($334.29
per Limited Partnership Unit) from the proceeds of the sale.
27
<PAGE>
White Phonic
On April 30, 1990, the Partnership entered into a joint venture with an
affiliate of William C. White and George Vila to develop and operate an
office/industrial building. The Partnership committed to make a maximum capital
contribution of $3,450,000. During the first ten years, up to 1% of the
preferential return could be deferred to the extent payments could not be made
from operating and extraordinary cash flow.
On July 14, 1998, the joint venture, in which the Partnership held a 50%
interest, sold the White Phonic property in Petaluma, California, to an
unaffiliated third party for a total gross sale price of $5,380,000. The
Partnership received its share of the net proceeds of $4,279,751 after closing
costs, representing a return of capital and accrued interest plus its
participation in net sales proceeds of $965,671 and recognized a gain of
$1,335,808 ($27.11 per Limited Partnership Unit). A disposition fee of $161,400
was accrued but not paid to AEW Real Estate Advisors, Inc. On July 30, 1998, the
Partnership made a capital distribution of $4,279,683 ($87.72 per Limited
Partnership Unit) from the proceeds of the sale.
Prentiss Copystar
On May 23, 1991, the Partnership entered into a joint venture with an
affiliate of Prentiss Properties, Ltd., and an affiliate of the Partnership, to
develop and operate an industrial facility. The Partnership and its affiliate
collectively have a 75% interest in the joint venture. The Partnership committed
to make a maximum capital contribution of $2,300,000. The preferential return
related to $690,000 is payable currently only to the extent of available cash
flow. If $1,610,000, or any portion thereof, is returned to the Partnership
between the second and tenth anniversary of the joint venture agreement, the
return will be increased by an amount sufficient to preserve the stipulated rate
of return through the tenth anniversary. As of December 31, 1999, the property
is vacant. The Partnership is currently negotiating a long term lease with a
single tenant.
Summarized Financial Information
The following summarized financial information is presented in the
aggregate for the joint ventures:
Assets and Liabilities
<TABLE>
<CAPTION>
December 31,
----------------------------
1999 1998
---------- -----------
<S> <C> <C>
Assets
Real property, at cost less
accumulated depreciation
of $423,431 and $832,160 at
December 31, 1999 and
1998, respectively $2,355,436 $2,421,223
Other 11,877 30,891
---------- ----------
2,367,313 2,452,114
Liabilities 73,813 88,618
---------- ----------
Net assets $2,293,500 $2,363,496
========== ==========
</TABLE>
28
<PAGE>
Results of Operations
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Revenue:
Rental income $ 367,942 $2,353,857 $3,883,758
Interest and other income -- 11,666 6,410
---------- ---------- ----------
367,942 2,365,523 3,890,168
---------- ---------- ----------
Expenses:
Operating expenses 109,644 1,018,966 1,395,823
Depreciation and amortization 65,787 419,451 766,748
---------- ---------- ----------
175,431 1,438,417 2,162,571
---------- ---------- ----------
Net income $ 192,511 $ 927,106 $1,727,597
========== ========== ==========
</TABLE>
Liabilities and expenses exclude amounts owed and attributable to the
Partnership and its affiliates on behalf of their various financing arrangements
with the joint ventures.
Note 4 - Property
On July 18, 1988, the Partnership entered into a joint venture with an
affiliate of The Hewson Company to acquire and operate an industrial building
known as Wilmington Industrial in Carson, California. The Partnership made
capital contributions totaling $7,774,402. In 1991, when the venture partner did
not fund its proportionate share of the cash flow deficit, the Partnership's
ownership interest increased to 100%.
On December 7, 1988, the Partnership entered into a joint venture with an
affiliate of The Trammell Crow Company to acquire, rehabilitate and operate an
industrial building known as Stemmons Industrial in Farmers Branch, Texas. The
Partnership made a capital contribution of $5,307,504. Effective July 1, 1994,
this joint venture was dissolved and the venture partner's interest was assigned
to the Partnership. Accordingly, since this date, the investment has been
accounted for as a wholly-owned property.
On September 29, 1997, the Partnership sold the Stemmons Industrial
property for a gross sales price of $4,500,000. The Partnership received net
proceeds of $4,334,193, after closing costs, and recognized a gain of $248,172
($5.04 per Limited Partnership Unit). A disposition fee of $135,000 was accrued
but not paid to AEW. On October 30, 1997, the Partnership made a capital
distribution of $4,334,326 ($88.84 per Limited Partnership Unit) from the
proceeds of the sale.
The following is a summary of the Partnership's remaining investment in
property:
<TABLE>
<CAPTION>
December 31,
------------------------------
1999 1998
----------- -----------
<S> <C> <C>
Land $ 2,770,056 $ 2,770,056
Buildings, improvements and
other capitalized costs 4,908,078 4,903,218
Impairment provision (1,500,000) (1,500,000)
Accumulated depreciation and
amortization (2,176,751) (2,048,698)
Net operating assets (liabilities) 59,719 118,207
----------- -----------
$ 4,061,102 $ 4,242,783
=========== ===========
</TABLE>
The Wilmington Industrial building is being depreciated over 30 years and
capitalized improvements are being depreciated over seven years. The $1,500,000
impairment provision was recorded in 1995.
Tenant leases provide for minimum rents, subject to adjustment as stated in
each lease. Tenants are also obligated to reimburse their pro-rata share of
operating expenses. The minimum rents due under non-cancelable operating leases
at Wilmington Industrial are as follows: $412,729 in 2000 and $155,748 in 2001.
29
<PAGE>
Note 5 - Income Taxes
The Partnership's income for federal income tax purposes differs from that
reported in the accompanying statement of operations as follows:
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------------
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Net income per financial
statements $ 365,739 $ 8,384,391 $ 1,588,309
Timing differences:
Joint venture earnings (1,666) (2,393,561) 33,639
Property rentals 71,247 595,319 12,550
Depreciation 27,078 15,276 49,547
Expenses -- 7,166 14,332
Gain on sale -- 1,911,966 99,284
----------- ----------- -----------
Taxable income $ 462,398 $ 8,520,557 $ 1,797,661
=========== =========== ===========
</TABLE>
Note 6 - Partners' Capital
Allocation of net income (losses) from operations and distributions of
distributable cash from operations, as defined, are in the ratio of 99% to the
limited partners and 1% to the general partners. Cash distributions are made
quarterly.
Net sale proceeds and financing proceeds are allocated first to limited
partners to the extent of their contributed capital plus a stipulated return
thereon, as defined, second to pay disposition fees, and then 85% to the limited
partners and 15% to the general partners. The adjusted capital contribution per
limited partnership unit was reduced from $1,000 to $951.83 during 1990, from
$951.83 to $768.98 during 1994, from $768.98 to $660.29 during 1997, from
$660.29 to $228.20 during 1998, and from 228.20 to 224.87 during 1999. Income
from a sale is allocated in proportion to the distribution of related proceeds,
provided that the general partners are allocated at least 1%. Losses from a
sale, and income from a sale if there are no residual proceeds after the
repayment of the related debt, will be allocated 99% to the limited partners and
1% to the general partners.
Note 7 - Subsequent Event
Distributions of cash from operations relating to the quarter ended
December 31, 1999 were made on January 27, 2000 in the aggregate amount of
$138,479 ($2.81 per Limited Partnership Unit).
30
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
Schedule III
REAL ESTATE AND ACCUMULATED DEPRECIATION
AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
Initial Cost to the Partnership Costs Subsequent to Acquisition
------------------------------------- -------------------------------------
Buildings,
improvements, Change in
and other Other Capitalized Other Valuation
Description Land Capital Costs Net Assets Improvements Net Assets Allowance
- ---------------------------------- ---------- ------------- ---------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
CARSON, CA. (See Note A)
- - Industrial bldg. $2,770,056 $4,380,463 $8,285 $527,606 $51,431 ($1,500,000)
DALLAS, TX (See Note A) $638,147 $3,966,791 $46,661 $8,581 ($46,672) --
- -Idustrial bldg.
---------- ------------- ---------- ------------ ---------- ---------
Total wholly-owned property $3,408,203 $8,347,254 $54,946 $536,187 $4,759 ($1,500,000)
========== ============= ========== ============ ========== =========
ITASCA, IL.
- - 51.75% interest in Prentiss
Copley/Itasca Assoc. J/V
- - Develop and operate ---------- See Note B ---------- ------------ ---------- ---------
an industrial building
FREDERICK, MD.
- - 48.75% interest in Frederick
Partners Joint Venture ---------- See Note B ---------- ------------ ---------- ---------
- - Develop and operate
an apartment complex
PETALUMA, CA.
- - 50% interest in White Phonic
Associates Joint Venture ---------- See Note B ---------- ------------ ---------- ---------
- - Develop and operate
an industrial building
---------- ------------- ---------- ------------ ---------- ---------
Total joint venture investments:
========== ============= ========== ============ ========== =========
<CAPTION>
Gross Amount at which Carried
at Close of Period
--------------------------------------
Buildings,
improvements,
and other Disposal Accum. Depr.
Description Land Capital Costs Net Assets of Asset Total & Amort.
- ---------------------------------- ---------- -------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CARSON, CA. (See Note A)
- - Industrial bldg. $2,770,056 $3,408,069 $59,716 0 $6,237,841 ($2,176,739)
DALLAS, TX (See Note A) $638,147 $3,975,372 ($11) ($4,613,508) $0 $0
- -Idustrial bldg.
---------- -------------- ---------- ------------ ---------- ------------
Total wholly-owned property $3,408,203 $7,383,441 $59,705 ($4,613,508) $6,237,841 ($2,176,739)
========== ============== ========== ============ ========== ============
ITASCA, IL.
- - 51.75% interest in Prentiss
Copley/Itasca Assoc. J/V
- - Develop and operate ---------- -------------- ---------- 1,595,569 N/A Completed
an industrial building 1991
FREDERICK, MD.
- - 48.75% interest in Frederick
Partners Joint Venture ---------- -------------- ---------- 0 N/A Completed
- - Develop and operate Ph I - 1990
an apartment complex Ph I - 1991
PETALUMA, CA.
- - 50% interest in White Phonic
Associates Joint Venture ---------- -------------- ---------- 0 N/A Completed
- - Develop and operate 1991
an industrial building
---------- -------------- ---------- ------------ ---------- ------------
Total joint venture investments: $1,595,569
========== ============== ========== ============ ========== ============
<CAPTION>
Status of Date Depreciable
Description Construction Acquired Life
- ---------------------------------- ------------ --------- ----------
<S> <C> <C> <C>
CARSON, CA. (See Note A)
- - Industrial bldg. Completed 7/18/88 30 years
1990
DALLAS, TX (See Note A)
- -Idustrial bldg. Completed 12/7/88 40 Years
1989
Total wholly-owned property
ITASCA, IL.
- - 51.75% interest in Prentiss
Copley/Itasca Assoc. J/V
- - Develop and operate 5/20/91 35 Years
an industrial building
FREDERICK, MD.
- - 48.75% interest in Frederick
Partners Joint Venture 03/20/89 27.5 Years
- - Develop and operate
an apartment complex
PETALUMA, CA.
- - 50% interest in White Phonic
Associates Joint Venture 04/30/90 40 Years
- - Develop and operate
an industrial building
Total joint venture investments:
</TABLE>
31
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION - WHOLLY OWNED PROPERTY
SCHEDULE III NOTE A
AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
Balance Conversion to Additions to
as of Wholly-Owned Lease Additions to
Description 01/01/97 Property Commissions Property
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stemmons 4,511,917 0 0 0
Hewson/Wilmington 6,169,161 0 556 0
----------------------------------------------------------------------------------------
Total Wholly-Owned Property 10,681,078 0 556 0
========================================================================================
<CAPTION>
Balance Conversion to Additions to
as of Wholly-Owned Lease Additions to
Description 01/01/98 Property Commissions Property
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hewson/Wilmington 6,120,495 0 8,577 0
----------------------------------------------------------------------------------------
Total Wholly-Owned Property 6,120,495 0 8,577 0
========================================================================================
<CAPTION>
Balance Conversion to Additions to
as of Wholly-Owned Lease Additions to
Description 01/01/1999 Property Commissions Property
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hewson/Wilmington 6,291,469 0 4,860 0
----------------------------------------------------------------------------------------
Total Wholly-Owned Property 6,291,469 0 4,860 0
========================================================================================
<CAPTION>
Change in Balance
Write down Property Working Disposal as of
Description of Property Capital of Asset 12/31/1997
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stemmons 0 101,591 (4,613,508) 0
Hewson/Wilmington (49,222) 0 6,120,495
---------------------------------------------------------------------------------------
Total Wholly-Owned Property 0 52,369 6,120,495
=======================================================================================
<CAPTION>
Change in Balance
Write down Property Working Disposal as of
Description of Property Capital of Asset 12/31/1998
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hewson/Wilmington 162,397 0 6,291,469
---------------------------------------------------------------------------------------
Total Wholly-Owned Property 0 162,397 6,291,469
=======================================================================================
<CAPTION>
Change in Balance
Write down Property Working Disposal as of
Description of Property Capital of Asset 12/31/1999
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hewson/Wilmington 58,488 0 6,354,817
---------------------------------------------------------------------------------------
Total Wholly-Owned Property 0 58,488 6,354,817
=======================================================================================
<CAPTION>
12/31/1996 1997 12/31/97 1997
Accumulated Depreciation Accumulated Disposal Balance per
Description Depreciation Amort/Expense Depreciation of Asset G/L @ 12/31/1997
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Stemmons 548,158 (114,312) 662,470 (662,470) 0
Hewson/Wilmington 1,782,688 (136,254) 1,918,942 0 4,201,553
--------------------------------------------------------------------------------------
Total Wholly-Owned Property 2,330,846 (250,566) 2,581,412 4,201,553
======================================================================================
<CAPTION>
12/31/1997 1998 12/31/1998 1998
Accumulated Depreciation Accumulated Disposal Balance per
Description Depreciation Amort/Expense Depreciation of Asset G/L @ 12/31/1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Hewson/Wilmington 1,918,942 (129,744) 2,048,686 0 4,242,783
--------------------------------------------------------------------------------------
Total Wholly-Owned Property 1,918,942 (129,744) 2,048,686 4,242,783
======================================================================================
<CAPTION>
12/31/1998 1999 12/31/1999 1999
Accumulated Depreciation Accumulated Disposal Balance per
Description Depreciation Amort/Expense Depreciation of Asset G/L @ 12/31/1999
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Hewson/Wilmington 2,048,686 (128,053) 2,176,739 0 4,178,078
--------------------------------------------------------------------------------------
Total Wholly-Owned Property 2,048,686 (128,053) 2,176,739 4,178,078
======================================================================================
</TABLE>
32
<PAGE>
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
SCHEDULE III NOTE B - JOINT VENTURES
AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
BALANCE
AS OF EQUITY IN
PERCENT OF DECEMBER 31, INVESTMENT IN INCOME/
DESCRIPTION OWNERSHIP 1996 J/V (LOSS)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Prentiss Copystar 51.75% 1,765,281 0 191,536
Waterford Apartments 48.75% 10,559,789 0 865,614
White Phonic 50% 3,153,986 0 294,197
-----------------------------------------------------------
Investments in Joint Ventures at December 31, 1997: $15,479,056 $1,351,347
===========================================================
<CAPTION>
BALANCE
AS OF EQUITY IN
PERCENT OF DECEMBER 31, INVESTMENT IN INCOME/
DESCRIPTION OWNERSHIP 1997 J/V (LOSS)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Prentiss Copystar 51.75% 1,711,204 0 183,843
Waterford Apartments 48.75% 10,163,029 0 517,650
White Phonic 50% 3,092,137 0 (115,365)
------------------------------------------------------------
Investments in Joint Ventures at December 31, 1998: $14,966,370 $586,128
============================================================
<CAPTION>
BALANCE
AS OF EQUITY IN
PERCENT OF DECEMBER 31, INVESTMENT IN INCOME/
DESCRIPTION OWNERSHIP 1998 J/V (LOSS)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Prentiss Copystar 51.75% 1,649,433 2,841 127,505
------------------------------------------------------------
Investments in Joint Ventures at December 31, 1999: $1,649,433 $2,841 $127,505
============================================================
<CAPTION>
BALANCE
1997 AMORTIZATION CASH AS OF
OF DEFERRED DISTRIBUTED DECEMBER 31,
DESCRIPTION ACQUISITION FEES FROM J/V 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Prentiss Copystar - (245,613) 1,711,204
Waterford Apartments (10,273) (1,252,101) 10,163,029
White Phonic (4,060) (351,986) 3,092,137
-------------------------------------------------------------------------------
Investments in Joint Ventures at December 31, 1997: ($14,333) ($1,849,700) $14,966,370
===============================================================================
<CAPTION>
BALANCE
1998 AMORTIZATION CASH DISPOSALS AS OF
OF DEFERRED DISTRIBUTED 1998 DECEMBER 31,
DESCRIPTION ACQUISITION FEES FROM J/V 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Prentiss Copystar -- (245,614) 1,649,433
Waterford Apartments (5,136) (1,054,818) (9,620,725) 0
White Phonic (2,030) (211,419) (2,763,324) 0
-------------------------------------------------------------------------------
Investments in Joint Ventures at December 31, 1998: ($7,166) ($1,511,851) ($12,384,049) $1,649,433
===============================================================================
<CAPTION>
BALANCE
1999 AMORTIZATION CASH DISPOSALS AS OF
DEFERRED DISTRIBUTED 1999 DECEMBER 31,
DESCRIPTION ACQUISITION FEES FROM J/V 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Prentiss Copystar -- (184,210) 1,595,569
-------------------------------------------------------------------------------
Investments in Joint Ventures at December 31, 1999: $0 ($184,210) $ 0 $1,595,569
===============================================================================
</TABLE>
33
<PAGE>
FINANCIAL STATEMENTS
INDEX NO. 2
Auditor's Report and Financial Statements
of Prentiss/Copley Itasca Associates
Report of Independent Accountants from PricewaterhouseCoopers LLP
Balance Sheets - December 31, 1999 and 1998
Statements of Operations - For the Years ended December 31, 1999, 1998 and
1997
Statements of Partners' Equity - For the Years ended December 31, 1999,
1998 and 1997
Statements of Cash Flows - For the Years ended December31, 1999, 1998 and
1997
Notes to Financial Statements
34
<PAGE>
PRENTISS/COPLEY ITASCA ASSOCIATES
FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
35
<PAGE>
[LETTERHEAD OF PRICEWATERHOUSECOOPERS LLP]
Report of Independent Accountants
February 4, 2000
To the Partners of
Prentiss/Copley Itasca Associates
In our opinion, the accompanying balance sheets and the related statements of
operations, of partners' equity and of cash flows present fairly, in all
material respects, the financial position of Prentiss/Copley Itasca Associates
at December 31, 1999 and 1998, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.
These financial statements are the responsibility of the Partnership's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
36
<PAGE>
PRENTISS/COPLEY ITASCA ASSOCIATES
BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998
------ ------
(thousands of dollars)
<S> <C> <C>
Assets
Income-producing property $2,387 $2,453
Accruable rental income -- 9
Accrued receivables -- 1
Cash and cash equivalents 12 21
------ ------
Total assets $2,399 $2,484
====== ======
Liabilities
Accounts payable and other liabilities $ 74 $ 87
Amounts due to affiliates 37 30
------ ------
Total liabilities 111 117
------ ------
Partners' equity 2,288 2,367
------ ------
Total liabilities and partners' equity $2,399 $2,484
====== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
37
<PAGE>
PRENTISS/COPLEY ITASCA ASSOCIATES
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998 1997
----- ----- -----
(thousands of dollars)
<S> <C> <C> <C>
Rental operations
Rental income $ 368 $ 468 $ 462
Property operating expenses 110 126 115
----- ----- -----
258 342 347
Interest expense 356 355 355
Depreciation 52 53 53
Amortization 14 18 18
----- ----- -----
Net loss $(164) $ (84) $ (79)
===== ===== =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
38
<PAGE>
PRENTISS/COPLEY ITASCA ASSOCIATES
STATEMENTS OF PARTNERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Developer CPP 6 CPP 7 Total
--------- ------- ------- -------
(thousands of dollars)
<S> <C> <C> <C> <C>
Partners' equity (deficit), December 31, 1996 $ (175) $ 1,868 $ 837 $ 2,530
Net loss (20) (41) (18) (79)
------- ------- ------- -------
Partners equity (deficit), December 31, 1997 (195) 1,827 819 2,451
Net loss (21) (43) (20) (84)
------- ------- ------- -------
Partners' equity (deficit), December 31, 1998 (216) 1,784 799 2,367
Contributions -- 59 26 85
Net loss (41) (85) (38) (164)
------- ------- ------- -------
Partners equity (deficit), December 31, 1999 $ (257) $ 1,758 $ 787 $ 2,288
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
39
<PAGE>
PRENTISS/COPLEY ITASCA ASSOCIATES
STATEMENTS OF CASH FLOWS
FOR ThE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998 1997
----- ----- -----
(thousands of dollars)
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(164) $ (84) $ (79)
Adjustment to reconcile net loss to cash used in
operating activities:
Depreciation and amortization 66 71 71
Non-cash interest 85 -- --
Changes in assets and liabilities:
Accruable rental income 9 2 (8)
Accrued receivables 1 4 (5)
Accounts payable and other liabilities (13) -- 16
Amounts due to affiliates 7 (5) 4
----- ----- -----
Net cash used in operating activities (9) (12) (1)
----- ----- -----
Net change in cash and cash equivalents (9) (12) (1)
Cash and cash equivalents, beginning of year 21 33 34
----- ----- -----
Cash and cash equivalents, end of year $ 12 $ 21 $ 33
===== ===== =====
Supplemental information:
Interest paid $ 264 $ 355 $ 355
===== ===== =====
</TABLE>
The accompanying notes are an integral part of the financial statements.
40
<PAGE>
PRENTISS/COPLEY ITASCA ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION
Prentiss/Copley Itasca Associates (the "Partnership") was formed
effective May 20, 1991, pursuant to a general partnership agreement
between Prentiss Properties Itasca, L.P. (the "Developer") (25%), as
managing partner; Copley Pension Properties VI, a Real Estate Limited
Partnership ("CPP 6") (51.75%); and Copley Pension Properties VII, a Real
Estate Limited Partnership ("CPP 7") (23.25%), for the purpose of owning,
constructing and operating an industrial building in Itasca, Illinois.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Income-producing property
The income-producing property, which became operational in September
1991, is recorded at cost. Depreciation on the building and improvements
is provided under the straight-line method over an estimated useful life
of 35 years. Management of the Partnership reviews the carrying value of
the property to determine if circumstances exist indicating an impairment
in the carrying value of the investment in income-producing property or
that depreciation periods should be modified. If facts or circumstances
support the possibility of impairment, management of the Partnership will
prepare a projection of the undiscounted future cash flows, without
interest charges, of the property and determine if the investment in
income-producing property is recoverable based on the undiscounted future
cash flows. Management of the Partnership does not believe that there are
any factors or circumstances indicating impairment of the property.
Maintenance and repairs are charged to operations as incurred; major
renewals and betterments are capitalized. Upon the sale or disposition of
a fixed asset, the asset and the related accumulated depreciation are
removed from the accounts and the gain or loss is included in operations.
Leasing charges are deferred and amortized over the term of the lease.
Income taxes
No provision for income taxes is necessary in the financial statements of
the Partnership because, as a partnership, it is not subject to income
tax and the tax effect of its activities accrues to the individual
partners.
Leases
The Partnership, as a lessor, has retained substantially all of the risks
and benefits of ownership and accounts for the lease as an operating
lease. Rental income is recognized over the term of the lease as it is
earned. Accruable rental income represents rental income earned in excess
of rent payments received pursuant to the terms of the lease agreement.
Assets held for leasing purposes are classified as income-producing
property.
Cash and cash equivalents
For purposes of reporting cash flows, cash and cash equivalents consists
of cash on hand and investments with maturities of three months or less
when purchased.
41
<PAGE>
PRENTISS/COPLEY ITASCA ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. INCOME-PRODUCING PROPERTY
<TABLE>
<CAPTION>
1999 1998
---------- ----------
(thousands of dollars)
<S> <C> <C>
Land $ 983 $ 983
Building and improvements 1,837 1,837
Deferred leasing charges -- 474
---------- ----------
2,820 3,294
Acceumlated depreciation and amortization 433 841
---------- ----------
$ 2,387 $ 2,453
========== ==========
</TABLE>
4. LEASING ACTIVITES
A manufacturer and distributor of high-tech office equipment was the sole
lessee of the income-producing property. The tenant vacated the entire
building upon expiration of their lease on September 30, 1999. The
Partnership is actively seeking to relet the property but has no binding
commitments at this time.
5. RELATED PARTY TRANSACTIONS
The operations of the Partnership are managed by an affiliate of the
Developer in accordance with a management agreement. Management fees
charged to the Partnership during the years ended December 31, 1999 and
1998, totaled $8,000 and $11,000, respectively.
The partnership agreement provides for a priority return, which has been
reflected in the financial statements as a payment of interest, on the
capital contributions made by CPP 6 and CPP 7; interest is charged at a
rate of 11% per annum. The partnership agreement provides for a senior
and a junior priority return. In the event of reduced cash flow the
senior priority return must be paid and, if necessary, funded from
deficit contributions. During 1999, deficit contributions of
approximately $85,000 were recorded to satisfy the senior priority return
obligations. The junior priority return may accrue and has been accrued
by the partnership since September 1999. Amounts due to affiliates at
December 31, 1999 consist of the accrued junior priority return.
As a result of vacancy in the building, the Partnership's ability to
service its obligations has been impaired. The partners are, however,
obligated by the partnership agreement to fund all other Partnership
obligations, including the preferred returns discussed above, in the
event of insufficient cash flow from operations.
42
<PAGE>
FINANCIAL STATEMENTS
INDEX NO.3
Auditor's Report and Financial Statements
of Frederick Partners
Report of Independent Auditors from Reznick Fedder & Silverman
Balance Sheets - August 6, 1998 and December 31,1997
Statements of Operations - For the Period ended January 1, 1998 through August
6, 1998, and the years ended December 31, 1997 and 1996
Statements of Partners' Capital - For the Period ended January 1, 1998 through
August 6, 1998, and the years ended December 3l, 1997 and 1996
Statements of Cash Flows - For the Period ended January 1,1998 through August
6, 1998, and the years ended December 31, 1997 and 1996
Notes to Financial Statements
43
<PAGE>
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS' REPORT
FREDERICK PARTNERS
AUGUST 6, 1998 AND DECEMBER 31, 1997
44
<PAGE>
Frederick Partners
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 3
FINANCIAL STATEMENTS
BALANCE SHEETS 4
STATEMENTS OF OPERATIONS 5
STATEMENTS OF PARTNERS' EQUITY 6
STATEMENTS OF CASH FLOWS 7
NOTES TO FINANCIAL STATEMENTS 8
</TABLE>
45
<PAGE>
[LOGO]
Reznick Fedder & Silverman
Certified Public Accountants o A Professional Corporation
Two Hopkins Plaza o Suite 2100 o Baltimore, Maryland 21201-2911
o Phone (410) 783-4900 o Fax (410) 727-0460
INDEPENDENT AUDITORS' REPORT
To the Partners
Frederick Partners
We have audited the accompanying balance sheets of Frederick Partners as of
August 6, 1998 and December 31, 1997, and the related statements of operations,
partners' equity and cash flows for the period January 1, 1998 through August 6,
1998, and for the years ended December 31, 1997 and 1996. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Frederick Partners as of
August 6, 1998 and December 31, 1997, and the results of its operations, changes
in partners' equity and its cash flows for the period January 1, 1998 through
August 6, 1998, and for the years ended December 31, 1997 and 1996, in
conformity with generally accepted accounting principles.
/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 5, 1999
4520 East West Highway 212 S. Tryon Street
Suite 300 Suite 1180
Bethesda, MD 20814-3319 Charlotte, NC 28281-8100
Phone (301) 652-9100 Phone (704) 332-9100
745 Atlantic Avenue Two Premier Plaza, Suite 500
Suite 800 5605 Glenridge Drive
Boston, MA 02111-2735 Atlanta, GA 31150-1298
Phone (617) 423-5855 Phone (770) 844-0644
46
<PAGE>
Frederick Partners
BALANCE SHEETS
August 6, 1998 and December 31, 1997
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
ASSETS
INVESTMENT IN REAL ESTATE
Land $ 3,099,120 $ 3,099,120
Building and improvements 12,919,662 12,919,662
Personal property 1,601,830 1,601,830
----------- -----------
17,620,612 17,620,612
Less accumulated depreciation 6,013,592 5,695,652
----------- -----------
11,607,020 11,924,960
Cash -- 341,988
Tenant receivables -- 2,120
Tenants' security deposits -- 55,241
Prepaid expenses 259,422 149,521
----------- -----------
$11,866,442 $12,473,830
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Accounts payable $ 72,705 $ 6,047
Accrued expenses 35,139 --
Deferred rental income 225,630 154,323
Accrued distributions 2,787,044 2,709,187
Accrued guaranteed payments 1,500,717 1,458,793
Tenants' security deposits payable 56,019 55,241
Due to affiliates -- 18,197
----------- -----------
4,677,254 4,401,788
PARTNERS' EQUITY 7,189,188 8,072,042
----------- -----------
$11,866,442 $12,473,830
=========== ===========
</TABLE>
See notes to financial statements
47
<PAGE>
Frederick Partners
STATEMENTS OF OPERATIONS
For the period ended January 1, 1998 through August 6, 1998 and
the years ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Revenue
Rent $1,759,025 $2,794,683 $2,629,810
Other lease related income 64,493 118,158 96,688
Interest 6,399 5,796 7,153
---------- ---------- ----------
Total revenue 1,829,917 2,918,637 2,733,651
---------- ---------- ----------
Expenses
Operating expenses
Advertising and promotion 28,787 53,690 63,263
Salaries 189,487 303,412 262,844
Administrative 54,813 57,442 61,019
Management fee 63,789 102,152 95,681
Maintenance 145,964 251,807 270,429
Utilities 73,378 93,679 91,077
Real estate taxes 166,778 275,285 247,279
Insurance 13,707 24,686 27,764
Depreciation 317,868 613,371 675,378
Guaranteed payments 486,236 797,252 776,988
---------- ---------- ----------
Total operating expenses 1,540,807 2,572,776 2,571,722
---------- ---------- ----------
EXCESS OF REVENUE OVER
EXPENSES $ 289,110 $ 345,861 $ 161,929
========== ========== ==========
</TABLE>
See notes to financial statements
48
<PAGE>
Frederick Partners
STATEMENTS OF PARTNERS' EQUITY
For the period ended January 1, 1998 through August 6, 1998 and
the years ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
Frederick Frederick Copley
Bonuto Bozzuto Two Copley Pension
Limited Limited Pension Properties Total
Partnership Partnership Properties VI VII Equity
------------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Partners' equity, (deficit),
December 31, 1995 $ (110,796) $ (63,178) $ 7,996,457 $ 2,665,472 $ 10,487,955
Distributions -- -- (1,082,233) (360,745) (1,442,978)
Excess of revenue over expenses -- -- 121,477 40,482 161,929
------------ ------------ ------------ ------------ ------------
Partners' equity (deficit)
December 31, 1996 (110,796) (63,178) 7,035,671 2,345,209 9,206,906
Distributions -- -- (1,110,542) (370,183) (1,480,725)
Excess of revenue over expenses -- -- 259,396 86,465 345,861
------------ ------------ ------------ ------------ ------------
Partners' equity (deficit),
December 31, 1997 (110,796) (63,178) 6,184,525 2,061,491 8,072,042
Distributions -- -- (878,973) (292,991) (1,171,964)
Excess of revenue over expenses -- -- 219,724 69,386 289,110
------------ ------------ ------------ ------------ ------------
Partners' equity (deficit),
December 31, 1998 $ (110,796) $ (63,178) $ 5,525,276 $ 1,837,886 $ 7,189,188
============ ============ ============ ============ ============
</TABLE>
See notes to financial statements
49
<PAGE>
Frederick Partners
STATEMENTS OF CASH FLOWS
For the period ended January 1, 1998 through August 6, 1998 and
the years ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities
Excess of revenue over expenses $ 289,110 $ 345,861 $ 161,929
Adjustments to reconcile excess of revenue over expenses
to net cash provided by operating activities
Depreciation 317,868 613,371 675,378
Changes in assets and liabilities
Decrease in tenant receivables 2,120 2,217 1,792
(Increase) decrease in prepaid expenses (109,901) 930 (25,860)
Increase (decrease) in deferred rental income 71,307 84,943 (45,542)
Increase (decrease) in accounts payable 66,730 5,218 (25,124)
Net security deposits received 56,019 -- 4,239
Increase in accrued guaranteed payments 41,924 211,821 204,391
Increase in accrued expenses 35,139 -- --
Increase (decrease) in due to affiliates (18,197) 3,676 (36,734)
----------- ----------- -----------
Net cash provided by operating activities 752,119 1,268,037 914,469
----------- ----------- -----------
Cash flows from investing activities:
Capital additions -- (13,600) --
----------- ----------- -----------
Net cash used in investing activities -- (13,600) --
----------- ----------- -----------
Cash flows from financing activities
Capital distributions paid (1,094,107) (1,087,342) (1,063,396)
----------- ----------- -----------
Net cash used in financing activities (1,094,107) (1,087,342) (1,063,396)
----------- ----------- -----------
NET (DECREASE) INCREASE IN CASH (341,988) 167,095 (148,927)
Cash, beginning 341,988 174,893 323,820
----------- ----------- -----------
Cash, ending $ -- $ 341,988 $ 174,893
=========== =========== ===========
Supplemental disclosure of cash flow information
Cash paid during the year for guaranteed payments $ 444,312 $ 585,431 $ 572,597
=========== =========== ===========
</TABLE>
See notes to financial statements
50
<PAGE>
Frederick Partners
NOTES TO FINANCIAL STATEMENTS
August 6, 1998 and December 31, 1997
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Frederick Partners (the Partnership) was formed as a general partnership under
the laws of the State of Maryland on March 20, 1989, for the purpose of
constructing, owning and operating a rental housing project. The project
consists of 314 units located in Frederick County, Maryland, and is operating as
Crystal Park. During 1990, the construction of the first phase (Phase I) was
completed and rental operations commenced. During 1991,construction of a second
phase of the project (Phase II) was completed and rental operations commenced.
On August 6,1998, Copley Pension Properties VI and VII (CPPVI and VII), sold
their entire interest in the partnership and Frederick Bozzuto Limited
Partnership (FBLP) and Frederick Bozzuto Two Limited Partnership (FBLP Two) sold
34% of their 35% interest in the Partnership and distributed the remaining 1% to
an affiliate. Prior to such sale, all leases between the Partnership and tenants
of the property were operating leases.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported mounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Investment in Real Estate
Investment in real estate is carried at cost. Depreciation is provided for in
amounts sufficient to relate the cost of depreciable assets to operations over
their estimated service lives using accelerated methods.
Rental Income
Rental income is recognized as rentals become due. Rental payments received in
advance are deferred until earned.
Income Taxes
No provision or benefit for income taxes has been included in these financial
statements since taxable income or loss passes through to, and is reportable by,
the partners individually.
51
<PAGE>
Frederick Partners
NOTES TO FINANCIAL STATEMENTS - CONTINUED
August 6, 1998 and December 31, 1997
NOTE B - SALE OF PARTNERSHIP INTEREST
At the close of business on August 6, 1998, CPP VI and VII, sold their entire
interest in the Partnership and FBLP and FBLP Two sold 34% of their 35% interest
in the Partnership and distributed the remaining 1% to an affiliate. The
contract sales price for this transactions was $21,800,000. Property and
equipment transferred had a net book value of $11,607,020. In addition, assets
totaling $259,422 and liabilities totaling $389,493, which includes tenant
security deposits of $56,019, were transferred in the sale to the new partners.
The additional liabilities of $4,287,761 were assumed by the selling partners.
NOTE C - RELATED PARTY TRANSACTIONS
Expenses Incurred and Reimbursed to Affiliates
The Partnership reimbursed payroll and other costs incurred by Bozzuto &
Associates, Inc., an affiliate of Frederick Bozzuto Limited Partnership and
Frederick Bozzuto Two Limited Partnership, general partners, for various
administrative and operating services relating to the project and performed by
their employees. During 1998, 1997 and 1996, $189,922, $345,675, and $299,261
were incurred, respectively. At December 31, 1997, $9,489 remained unpaid.
Management Fees
The Partnership is required to pay an annual property management fee to Bozzuto
Management Company, an affiliate of Frederick Bozzuto Limited Partnership and
Frederick Bozzuto Two Limited Partnership, general partners, in an mount equal
to 3.5% of gross receipts collected. Management fees of $63,789, $102,152 and
$95,681 were expensed in 1998, 1997 and 1996, respectively. At December 31,
1997, $8,708 remained unpaid.
NOTE D - PARTNERS' EQUITY
The acquisition and development of Phase I was funded by capital contributions
from Copley Pension Properties VI and VII, (CPP VI and VII), general partners,
in the amounts of $9,000,000 and $3,000,000, respectively. The amended and
restated Partnership agreement (the Agreement) provides for capital
contributions to be characterized as senior and junior capital. CPP VI capital
consists of $6,750,000 of senior capital and $2,250,000 of junior capital. CPP
VII capital consists of $2,250,000 of senior capital and $750,000 of junior
capital. Capital contributed by both CPP VI and CPP VII has been contributed pro
rata, whereby 75% has been characterized as Phase I senior capital and 25% as
Phase I junior capital.
52
<PAGE>
Frederick Partners
NOTES TO FINANCIAL STATEMENTS - CONTINUED
August 6, 1998 and December 31, 1997
NOTE D - PARTNERS' EQUITY (Continued)
The Agreement provided for both a "Senior and Junior Priority Return," on a
monthly basis, which was calculated at the rate of 10.09% per annum on the
outstanding capital. The Phase I Priority Returns were payable monthly from
Operating Cash Flow as defined in the Agreement; however, (a) to the extent
Senior Priority Returns are required to be paid currently, they will be funded,
if necessary, Out of the proceeds of Deficit Contributions and Default Capital
Contributions as defined in the Agreement, and (b) to the extent the full amount
of the Junior Priority Return cannot be made from such sources on a monthly
basis, the amount of the Junior Priority Return will accrue with interest
compounded monthly.
At August 6, 1998 and December 31, 1997, the Phase I Junior Priority Return
(including accrued interest of $1,179,935 and $1,015,108, respectively) and
Senior Priority Returns (including accrued interest at $2,928 and $5,775,
respectively) payable totaled $2,798,099 (of which $2,111,528 was due to CPP VI
and $686,571 was due to CPP VII), and $2,827,913 (of which $2,132,315 was due to
CPP VI and $695,598 was due to CPP VII), respectively.
The acquisition and development of Phase II was funded by capital contributions
from CPP VI and CPP VII in the amounts of $5,100,000 and $1,700,000,
respectively. The Agreement provides for capital contributions to be
characterized as senior and junior capital. CPP VI capital consists of
$3,825,000 of senior capital and $1,275,000 of junior capital. CPP VII capital
consists of $1,275,000 of senior capital and $425,000 of junior capital. Capital
contributed by both CPP VI and CPP VII has been contributed pro rata, whereby
75% has been characterized as Phase II senior capital and 25% as Phase II junior
capital.
The Agreement provided for both a Senior and Junior Priority Return, on a
monthly basis, which was calculated at the rate of 10.09% per annum on their
outstanding capital. The Phase II Priority Returns were payable monthly from
Operating Cash Flow as defined in the Agreement, but, (a) to the extent Senior
Priority Returns were required to be paid currently, they will be funded, if
necessary, out of the proceeds of Deficit Contributions and Default Capital
Contributions as defined in the Agreement, and (b) to the extent the full amount
of the Junior Priority Return was not made from such sources on a monthly basis,
the amount of the Junior Priority Return accrued with interest compounded
monthly.
53
<PAGE>
Frederick Partners
NOTES TO FINANCIAL STATEMENTS - CONTINUED
August 6, l998 and December 3l, 1997
NOTE D - PARTNERS' EQUITY (Continued)
At August 6,1998 and December 31, 1997, the Phase II Junior Priority Return
(including accrued interest of $448,808 and $368,415, respectively) and Senior
Priority Returns payable totaled $1,489,662 (of which $1,114,564 was due to CPP
VI and $375,098 was due to CPP VII), and $1,340,067 (of which $1,000,804 was due
to CPP VI and $339,263 was due to CPP VII). Effective August 7,1998, the
Partnership is no longer subject to this agreement.
Subsequent to the financial statement date and in connection with the August 6,
1998 sale of its partnership interests, CPP VI and VII received $21,669,858 out
of the sale proceeds and applied it to the repayment of the following accounts:
<TABLE>
<S> <C>
Accrued distributions $ 2,787,044
Accrued guaranteed payments 1,500,717
Return of initial capital contribution 17,382,097
-----------
$21,669,858
===========
</TABLE>
Additionally, the Partnership distributed the remaining operating proceeds in
the amount of $268,955 to CPP VI and VII.
NOTE E - RECONCILIATION OF FINANCIAL STATEMENTS TO TAX RETURN
The following is a reconciliation of the excess of revenue over expenses and
partners' equity per the financial statements to the tax basis excess of revenue
over expenses and partners' equity for the period ended August 6, 1998, and the
year ended December 31, 1997 and 1996.
<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Excess of revenue over expenses
(financial statement basis) $ 289,110 $ 345,861 $ 161,929
Deferred rental income (154,322) 84,943 (45,542)
Real estate taxes deductible under IRS
Code Section 461 138,097 (908) (27,098)
--------- --------- ---------
Tax basis excess of revenue
over expenses $ 272,885 $ 429,896 $ 89,289
========= ========= =========
</TABLE>
54
<PAGE>
Frederick Partners
NOTES TO FINANCIAL STATEMENTS - CONTINUED
August 6, 1998 and December 31, 1997
NOTE B-RECONCILIATION OF FINANCIAL STATEMENTS TO TAX RETURN (Continued)
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Partners' equity (financial statement basis) $ 7,189,188 $ 8,072,042 $ 9,206,906
Deferred rental income -- 154,323 69,380
Real estate taxes deductible under IRS
Code Section 46l -- (138,097) (137,189)
Net adjustment for technical termination (7,189,188) -- --
----------- ----------- -----------
Tax basis $ -- $ 8,088,268 $ 9,139,097
=========== =========== ===========
</TABLE>
55
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit Page
Number Exhibit Number
- ------ ------- ------
<S> <C> <C>
10H. First Amendment to Hewson Wilmington Associates *
General Partnership Agreement dated as of
December 31, 1989 by and between Hewson/Wilmington,
L.P., a California limited partnership and the
Registrant.
27. Financial Data Schedule
</TABLE>
*Previously filed and incorporated herein by reference.
56
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
Date: March 29, 2000 By: /s/ Alison Husid Cutler
------------------------
Alison Husid Cutler
President of the
Managing General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
President, Chief
Executive Officer and
/s/ Alison Husid Cutler Director of the Managing March 29, 2000
- --------------------------
Alison Husid Cutler General Partner
Vice President and
/s/ Pamela J. Herbst Director of the Managing March 29, 2000
- --------------------------
Pamela J. Herbst General Partner
Vice President and
/s/ J. Grant Monahon Director of the Managing March 29, 2000
- --------------------------
J. Grant Monahon General Partner
/s/ James J. Finnegan Vice President of the Managing March 29, 2000
- --------------------------
James J. Finnegan General Partner
Treasurer and Principal Financial
/s/ Karin J. Lagerlund and Accounting Officer of the March 29, 2000
- --------------------------
Karin J. Lagerlund Managing General Partner
57
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Dec-31-1999
<CASH> 2,305,383
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,305,383
<PP&E> 5,656,671
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,962,054
<CURRENT-LIABILITIES> 89,031
<BONDS> 1,369,577
0
0
<COMMON> 0
<OTHER-SE> 6,503,446
<TOTAL-LIABILITY-AND-EQUITY> 7,962,054
<SALES> 854,117
<TOTAL-REVENUES> 992,399
<CGS> 268,902
<TOTAL-COSTS> 268,902
<OTHER-EXPENSES> 357,758
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 365,739
<INCOME-TAX> 0
<INCOME-CONTINUING> 365,739
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 365,739
<EPS-BASIC> 7.42
<EPS-DILUTED> 7.42
