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SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
-----------------------------------------
For Quarter Ended September 30, 2000 Commission File Number 0-17807
COPLEY PENSION PROPERTIES VI;
(Exact name of registrant as specified in its charter)
Massachusetts 04-2988542
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
World Trade Center East
Two Seaport Lane, 16th Fl.
Boston, Massachusetts 02210
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(617) 261-9000
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Former name, former address and former fiscal year if changed since last report:
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve (12) months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
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COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 2000
PART I
FINANCIAL INFORMATION
2
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COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, 2000 December 31, 1999
(Unaudited) (Audited)
------------------- ------------------
<S> <C> <C>
ASSETS
Real estate investments:
Joint venture $1,760,708 $1,595,569
Property, net 4,311,467 4,061,102
---------- ----------
6,072,175 5,656,671
Cash and cash equivalents 1,937,666 2,305,383
---------- ----------
$8,009,841 $7,962,054
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 78,144 $ 75,335
Accrued management fee - 13,696
Deferred disposition fees 1,369,577 1,369,577
---------- ----------
Total liabilities 1,447,721 1,458,608
---------- ----------
Partners' capital:
Limited partners ($223.49
per unit; 160,000 units authorized,
48,788 units issued and outstanding) 6,550,322 6,492,235
General partners 11,798 11,211
---------- ----------
Total partners' capital 6,562,120 6,503,446
---------- ----------
$8,009,841 $7,962,054
========== ==========
</TABLE>
(See accompanying notes to unaudited financial statements)
3
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COPLEY PENSION
PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
September 30, 2000 September 30, 2000 September 30, 1999 September 30, 1999
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY
Property rentals $203,759 $ 538,484 $205,093 $ 577,108
Property operating expenses (47,926) (156,746) (52,316) (151,449)
Depreciation and amortization (47,737) (125,549) (48,537) (96,589)
-------- --------- -------- ---------
108,096 256,189 104,240 329,070
Joint venture earnings (losses) 37,274 (30,336) 45,031 144,666
-------- --------- -------- ---------
Total real estate activity 145,370 225,853 149,271 473,736
-------- --------- -------- ---------
Interest on cash equivalents 29,695 92,849 31,506 104,969
-------- --------- -------- ---------
Total investment activity 175,065 318,702 180,777 578,705
-------- --------- -------- ---------
PORTFOLIO EXPENSES
Management fee - - 13,891 44,499
General and administrative 42,813 121,549 42,570 135,526
-------- --------- -------- ---------
42,813 121,549 56,461 180,025
-------- --------- -------- ---------
Net income $132,252 $ 197,153 $124,316 $ 398,680
======== ========= ======== =========
Net income per limited
partnership unit $ 2.68 $ 4.00 $ 2.52 $ 8.09
======== ========= ======== =========
Cash distributions per limited
partnership unit $ - $ 2.81 $ 3.14 $ 9.89
======== ========= ======= =========
Number of limited partnership units
outstanding during the period 48,788 48,788 48,788 48,788
======= ========= ======= =========
</TABLE>
(See accompanying notes to unaudited financial statements)
4
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COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
September 30, 2000 September 30, 2000 September 30, 1999 September 30, 1999
-------------------- ---------------------- ---------------------- ----------------------
General Limited General Limited General Limited General Limited
Partners Partners Partners Partners Partners Partners Partners Partners
-------- ---------- --------- ----------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at beginning
of period $10,475 $6,419,393 $11,211 $6,492,235 $13,250 $6,923,804 $13,832 $6,981,503
Cash distributions - - (1,385) (137,094) (1,547) (153,194) (4,873) (482,513)
Net income 1,323 130,929 1,972 195,181 1,243 123,073 3,987 394,693
-------- ---------- -------- ---------- -------- ---------- -------- ----------
Balance at end
of period $11,798 $6,550,322 $11,798 $6,550,322 $12,946 $6,893,683 $12,946 $6,893,683
======== ========== ======== ========== ======== ========== ======== ==========
</TABLE>
(See accompanying notes to unaudited financial statements)
5
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COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
SUMMARIZED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
--------------------------
September 30,
2000 1999
------------ -----------
Net cash provided by operating activities $ 265,667 $ 492,531
---------- -----------
Cash flows from investing activities:
Investment in property (299,431) -
Investment in joint venture (195,474) -
---------- -----------
Net cash used in investing activities (494,905) -
---------- -----------
Cash flows from financing activities:
Distributions to partners (138,479) (487,386)
---------- -----------
Net cash used in financing activities (138,479) (487,386)
---------- -----------
Net (decrease)/increase in cash and
cash equivalents (367,717) 5,145
Cash and cash equivalents:
Beginning of period 2,305,383 2,605,486
---------- -----------
End of period $1,937,666 $ 2,610,631
========== ===========
(See accompanying notes to unaudited financial statements)
6
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COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (Unaudited)
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments necessary to present fairly the Partnership's financial
position as of September 30, 2000 and December 31, 1999, its results of
operations, and partners' capital for the three and nine months ended September
30, 2000 and 1999 and its cash flows for the nine month periods ended September
30, 2000 and 1999. These adjustments are of a normal recurring nature.
See notes to financial statements included in the Partnership's 1999 Annual
Report on Form 10-K for additional information relating to the Partnership's
financial statements. We prepared the unaudited financial statements following
the requirements of the SEC for interim reporting. As permitted under those
rules, certain footnotes or other financial information that are normally
required by generally accepted accounting principles can be condensed or
omitted.
Note 1 - Organization and Business
----------------------------------
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 twelve years of their acquisition,
and then liquidate; however, the managing general partner could extend the
investment period if it is considered to be in the best interest of the limited
partners. The Partnership has engaged AEW Real Estate Advisors, Inc. (the
"Advisor") to provide asset management advisory services.
Note 2 - Investments in Joint Ventures
--------------------------------------
Summarized Financial Information
The following summarized financial information is presented in the
aggregate for the Prentiss Copystar joint venture:
7
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COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
Assets and Liabilities
----------------------
September 30, December 31,
2000 1999
------------ ------------
Assets
Real property, at cost less
accumulated depreciation
of $461,877 and $423,431,
respectively $2,726,943 $2,355,436
Other 73,940 11,877
---------- ----------
2,800,883 2,367,313
Liabilities 209,973 73,813
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Net assets $2,590,910 $2,293,500
========== ==========
Results of Operations
---------------------
Nine Months Ended September 30,
2000 1999
------------- ------------
Revenue:
Rental income $ 58,173 $ 357,827
---------- ----------
58,173 357,827
---------- ----------
Expenses:
Operating expenses 63,474 95,266
Depreciation and amortization 38,446 52,680
---------- ----------
101,920 147,946
---------- ----------
Net income (loss) $ (43,747) $ 209,881
========== ==========
Liabilities and expenses exclude amounts owed and attributable to the
Partnership and its affiliates on behalf of financing arrangements with the
joint venture.
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COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
Note 3 - Property
-----------------
The following is a summary of the Partnership's last remaining wholly-owned
property (Wilmington Industrial):
<TABLE>
<CAPTION>
September 30, 2000 December 31, 1999
------------------- ------------------
<S> <C> <C>
Land $ 2,770,056 $ 2,770,056
Buildings, improvements and
other capitalized costs 5,315,371 4,908,078
Investment valuation allowance (1,500,000) (1,500,000)
Accumulated depreciation and
amortization (2,302,300) (2,176,751)
Other assets and liabilities, net 28,340 59,719
----------- -----------
$ 4,311,467 $ 4,061,102
=========== ===========
</TABLE>
9
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COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
Liquidity and Capital Resources
The Partnership completed its offering of units of limited partnership
interest on December 31, 1988. A total of 48,788 units were sold. The
Partnership received proceeds of $43,472,858, net of selling commissions and
other offering costs, which have been used for investment in real estate and for
the payment of related acquisition costs, or retained as working capital
reserves. The Partnership made seven real estate investments; one investment
was sold in each of 1990, 1994 and 1997 and two investments were sold in 1998.
Through September 30, 2000, capital of $37,884,369 ($776.51 per limited
partnership unit) has been returned to the limited partners; $36,194,353 as a
result of sales and $1,690,016 as a result of a discretionary reduction of
original working capital previously held in reserves.
At September 30, 2000, the Partnership had $1,937,666 in cash and cash
equivalents which is being retained as working capital reserves. The source of
future liquidity and cash distributions to partners will primarily be cash
generated by the Partnership's invested cash and cash equivalents and real
estate investments, and proceeds from the sale of such investments. There were
no cash distributions relating to the first three quarters of 2000 due to
insufficient cash flow from the properties. One property has just become fully
occupied during the third quarter of 2000 and the other remaining property has
reduced its cash flow to the Partnership due to payments of capital
expenditures. 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
distributions relating to the third quarter of 1999 were made at the annualized
rate of 5.0% on the adjusted capital contribution of $228.20.
The carrying value of real estate investments in the financial statements
is at depreciated cost, or if the investment's carrying value is determined not
to be recoverable through expected undiscounted future cash flows, the carrying
value is reduced to estimated fair market value. The fair market value of such
investments is further reduced by the estimated cost of sale for properties held
for sale. Carrying value may be greater or less than current appraised value.
At September 30, 2000, the aggregate appraised value of the real estate
investments exceeded their carrying value by approximately $3,500,000. The
current appraised value of real estate investments has been estimated by the
managing general partner and is generally based on a correlation 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.
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COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
Results of Operations
Form of Real Estate Investments
The Wilmington Industrial investment is a wholly-owned property. The
Prentiss Copystar real estate investment is structured as a joint venture.
Operating Factors
During the third quarter of 2000, both properties became 100% leased as
they were at September 30, 1999.
Investment Results
For the three and nine months ended September 30, 2000, results from real
estate operations were $145,370 and $225,853, respectively, compared to $149,271
and $473,736 for the comparable periods in 1999. While the comparative three
month activity remained relatively stable, the overall nine month decrease of
$247,883 is primarily due to a decrease in joint venture earnings as a result of
Prentiss Copystar's vacancy during the first eight months of 2000 and a decrease
in operating results at Wilmington Industrial. The decrease at Wilmington
Industrial is due to lower average occupancy during 2000 and an increase in
depreciation and operating expenses.
Interest on cash equivalents for the three and nine months ended September
30, 2000 was $29,695 and $92,849, respectively, compared to $31,506 and $104,969
for the same periods in 1999. The decreases of approximately $1,800 and $12,000
for the comparative three and nine month periods are primarily due to lower
average investment balances.
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
primarily consist of real estate appraisal, printing, legal, accounting and
investor servicing fees.
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COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
The Partnership did not incur management fees during the three and nine
month periods ended September 30, 2000 due to the suspension of cash
distributions related to the first three quarters of 2000 due to the joint
venture's property being vacant during the first eight months of 2000 and the
other remaining property having reduced its cash flow to the Partnership due to
payments of capital expenditures.
General and administrative expenses for the three and nine month periods
ended September 30, 2000 were $42,813 and $121,549, respectively, compared to
$42,570 and $135,526 for the same periods in 1999. While the comparative three
month period expenses remained stable, the overall nine month decrease is
primarily due to lower taxes offset by increases in investor servicing fees and
printing fees.
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COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 2000
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits: (27) Financial Data Schedule
b. Reports on Form 8-K: No Current Reports on Form 8-K
were filed during the quarter ended September 30, 2000.
13
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SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
(Registrant)
November 9, 2000
/s/ Alison L. Husid
-------------------------------
Alison L. Husid
President, Chief Executive Officer
And Director of Managing General Partner, Sixth
Copley Corp.
November 9, 2000
/s/ Jem A. Hudgins
--------------------------------
Jem A. Hudgins
Principal Financial and Accounting
Officer of Managing General Partner,
Sixth Copley Corp.
14
