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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For Quarter Ended September 30, 2000 Commission File Number 0-18735
COPLEY REALTY INCOME PARTNERS 4;
A LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Massachusetts 04-3058134
(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 REALTY INCOME PARTNERS 4;
A LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 2000
PART I
FINANCIAL INFORMATION
2
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COPLEY REALTY INCOME PARTNERS 4;
A LIMITED PARTNERSHIP
STATEMENTS OF NET ASSETS IN LIQUIDATION
<TABLE>
<CAPTION>
September 30, 2000 December 31, 1999
(Unaudited) (Audited)
------------------ --------------------
<S> <C> <C>
Assets
Cash and cash equivalents $1,297,791 $1,291,411
------------------ --------------------
$1,297,791 $1,291,411
================== ====================
Liabilities and Net assets in liquidation
Accounts payable $ - $ 37,020
Accrued expenses for liquidation 40,500 49,300
------------------ --------------------
Total liabilities 40,500 86,320
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Net assets in liquidation:
Limited partners ($117 per
unit; 100,000 units authorized,
11,931 units issued and outstanding) 1,236,246 1,184,568
General partners 21,045 20,523
------------------ --------------------
Total partners' capital 1,257,291 1,205,091
------------------ --------------------
$1,297,791 $1,291,411
================== ====================
</TABLE>
(See accompanying notes to unaudited financial statements)
3
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COPLEY REALTY INCOME PARTNERS 4;
A LIMITED PARTNERSHIP
STATEMENTS OF CHANGES OF NET ASSETS IN LIQUIDATION
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, 2000 September 30, 2000
------------------- -------------------
<S> <C> <C>
Net assets in liquidation at
beginning of period $1,234,551 $1,205,091
------------------- -------------------
Increase during period:
Operating activities
Interest income 23,792 62,706
------------------- -------------------
23,792 62,706
------------------- -------------------
Liquidating activities
Change in provision for
liquidation expenses (1,052) (10,506)
------------------- -------------------
(1,052) (10,506)
------------------- -------------------
Net change in net assets in liquidation 22,740 52,200
------------------- -------------------
Net assets in liquidation at end of period $1,257,291 $1,257,291
=================== ===================
</TABLE>
(See accompanying notes to unaudited financial statements)
4
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COPLEY REALTY INCOME PARTNERS 4;
A LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, 1999 September 30, 1999
------------------ ------------------
<S> <C> <C>
Investment Activity
Joint venture earnings $ 42,898 $ 205,813
Interest on cash equivalents 19,785 51,755
Reversal of accrued disposition fees 197,700 197,700
Gain on sale of joint venture 1,974,170 1,974,170
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2,234,553 2,429,438
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Portfolio Expenses
General and administrative 12,578 46,829
Management fee 10,798 39,190
Amortization - 2,366
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23,376 88,385
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Net Income $ 2,211,177 $ 2,341,053
=========== ===========
Net income per limited partnership unit $ 183.48 $ 194.25
=========== ===========
Cash distributions per limited
partnership unit $ 451.71 $ 477.64
=========== ===========
Number of limited partnership units
outstanding during the period 11,931 11,931
=========== ===========
</TABLE>
(See accompanying notes to unaudited financial statements)
5
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COPLEY REALTY INCOME PARTNERS 4;
A LIMITED PARTNERSHIP
SUMMARIZED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,1999
-----------------
Net cash provided by operating activities $ 408,103
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Cash flows from investing activities:
Net proceeds from sale of property 5,404,521
Reversal of deferred disposition fees (197,700)
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Net cash provided by investing activities 5,206,821
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Cash flows from financing activity:
Distributions to partners (5,702,777)
------------
Net decrease in cash and cash equivalents (87,853)
Cash and cash equivalents:
Beginning of period 1,498,022
------------
End of period $ 1,410,169
============
(See accompanying notes to unaudited financial statements)
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COPLEY REALTY INCOME PARTNERS 4;
A 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 and the
changes of net assets in liquidation for the three and nine month periods ended
September 30, 2000, the results of its operations for the three and nine month
periods ended September 30, 1999 and its cash flows for the nine month period
ended September 30, 1999. These adjustments are of a normal recurring nature.
See notes to financial statements included in the Partnership's 1999 Annual
Report on Form 10-K for additional information relating to the Partnership's
financial statements.
NOTE 1 - ORGANIZATION AND BUSINESS
----------------------------------
Copley Realty Income Partners 4; A 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.
The Partnership commenced operations in September 1989 and acquired its real
estate investments prior to 1991. The Partnership sold its last remaining
investment in August 1999. On December 31, 1999, the Partnership adopted a plan
of liquidation and intends to dissolve in 2000.
In connection with its adoption of a plan of liquidation on December 31,
1999, the Partnership also adopted the liquidation basis of accounting which,
among other things, requires that assets and liabilities be stated at their
estimated net realizable value and that estimated costs of liquidating the
Partnership be provided to the extent that they are reasonably determinable.
NOTE 2 - REAL ESTATE JOINT VENTURES
-----------------------------------
On August 27, 1999, the Shasta Way joint venture, in which the Partnership
and an affiliate owned a 42% and 58% interest, respectively, sold its property
to an unaffiliated third party for gross proceeds of $13,057,000, of which the
Partnership's share was $5,483,940. The Partnership received its 42% share of
the net proceeds, $5,390,812 after closing costs, and recognized a gain of
$1,968,155 ($163.31 per limited partnership unit) on the sale. On September 22,
1999 the Partnership made a capital distribution of $5,297,364 ($444 per limited
partnership unit) from the proceeds of the sale.
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COPLEY REALTY INCOME PARTNERS 4;
A LIMITED PARTNERSHIP
The following summarized financial information is presented in the
aggregate for the Shasta Way joint venture:
Results of Operations
---------------------
January 1,1999
through
August 27, 1999
---------------
Revenue
Rental income $ 997,110
Other income 3,335
------------
1,000,445
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Expenses
Operating expenses 219,783
Depreciation and amortization 308,955
------------
528,738
------------
Net income $ 471,707
============
Expenses exclude amounts owed and attributable to the Partnership and its
affiliate on behalf of their various financing arrangements with the joint
venture.
NOTE 3 - ACCRUED EXPENSES FOR LIQUIDATION
-----------------------------------------
Accrued expenses for liquidation as of September 30, 2000 include estimates
of costs to be incurred in carrying out the dissolution and liquidation of the
Partnership. These costs include estimates of legal fees, accounting fees, tax
preparation and filing fees and other professional services.
During the nine months ended September 30, 2000 the Partnership incurred
$19,306 of such expenses and the managing general partner re-evaluated the
estimated costs to dissolve the Partnership. The provision for liquidation
expenses was accordingly increased by an additional $10,506 to reflect the
revised estimates.
The actual costs could vary from the related provisions due to the
uncertainty related to the length of time required to complete the liquidation
and dissolution of the Partnership. The accrued expenses do not take into
consideration possible litigation arising from the customary representations and
warranties made as part of each sale. Such costs are unknown and are not
estimable at this time.
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COPLEY REALTY INCOME PARTNERS 4;
A 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 in December 1990 and a total of 11,931 units were sold. The
Partnership received proceeds of $10,097,962, net of selling commissions and
other offering costs, which have been used for investment in real estate and to
pay related acquisition costs, or retained as working capital reserves.
In July 1995, the Partnership reduced its working capital reserves by
making a capital distribution of $441,447 ($37 per limited partnership unit).
After the distribution, the Partnership's adjusted capital contribution was $963
per unit.
On August 27, 1999, the Shasta Way joint venture in which the Partnership
and an affiliate owned a 42% and 58% interest, respectively, sold its property
for a gross sales price of $13,057,000, of which the Partnership's 42% share was
$5,483,940. The Partnership received its 42% share of the net proceeds, after
closing costs, in the amount of $5,390,812. On September 22, 1999, the
Partnership made a capital distribution of $5,297,364 ($444 per limited
partnership unit) from the proceeds of the sale.
In connection with the 1995 working capital reserve distribution discussed
above, two 1997 sales of property and the sale in August 1999 discussed above,
capital of $10,093,626 ($846 per limited partnership unit) has been returned to
the limited partners, reducing the adjusted capital contribution to $117 per
unit.
At September 30, 2000, the Partnership had $1,297,791 in cash and cash
equivalents which is being retained primarily as a reserve in the event of any
claims for breach of representations or warranties in connection with the sale
of Shasta Way, and as an additional reserve in connection with the liquidation
of the Partnership. The Partnership intends to liquidate in 2000. Cash
distributions from operations related to the first two quarters of 1999 were
made at the annualized rate of 5.5% on the adjusted capital contribution of $561
per unit. At the time of the operating distribution related to the second
quarter of 1999, the Partnership also made a special distribution of $4.80 per
limited partnership unit from operating cash previously held in reserves. Cash
distributions related to the third quarter of 1999 were made at the annualized
rate of 7% on the weighted average capital contribution of $517.57 per unit.
The increase in the distribution rate was due to higher cash receipts from the
Shasta Way joint venture due to a later than anticipated sale date. There have
been no distributions from operations since the distribution related to the
third quarter of 1999 due to the sale of the Partnership's last remaining
investment in August, 1999. When all Partnership expenses have been settled, a
distribution of the remaining cash reserves will be made.
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COPLEY REALTY INCOME PARTNERS 4;
A LIMITED PARTNERSHIP
Results of Operations
---------------------
Operating Factors
As discussed above, the Shasta Way joint venture, in which the Partnership
and an affiliate owned a 42% and 58% interest, respectively, sold its property
on August 27, 1999. The Partnership received its 42% share of the net proceeds,
after closing costs, in the amount of $5,390,812 and recognized a gain of
$1,968,155 ($163.31 per limited partnership unit). The Shasta Way property was
100% leased at the time of sale.
Investment Results
There are no comparative real estate operating results for the three and
nine month periods ended September 30, 2000 and 1999 due to the sale of the
Partnership's last remaining property in 1999, as discussed above.
For the comparable three and nine month periods of 2000 and 1999, interest
on cash and cash equivalents increased by $4,007 and $10,951, respectively.
These increases are due to slightly higher yields in 2000.
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. General and administrative expenses for the three and
nine month periods ended September 30, 1999 were $12,578 and $46,829,
respectively.
There were no management fees incurred during the first three quarters of
2000 due to the discontinuace of operating cash distributions as a result of the
sale of the Partnership's last remaining investment during 1999, as discussed
above.
Costs to dissolve and liquidate the Partnership include legal fees,
accounting fees, tax preparation fees, filing fees and other professional
services. During the nine months ended September 30, 2000, the Partnership
incurred $19,306 of such expenses and the managing general partner re-evaluated
the estimated costs to dissolve the Partnership. The provision for liquidation
expenses was accordingly increased by $10,506 to reflect the revised estimates.
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COPLEY REALTY INCOME PARTNERS 4;
A LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 2000
PART II
OTHER INFORMATION
Items 1-5 Not Applicable
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.
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SIGNATURES
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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 REALTY INCOME PARTNERS 4; A LIMITED
PARTNERSHIP
(Registrant)
November 7, 2000
/s/ Alison L. Husid
-------------------------------
Alison L. Husid
President, Chief Executive Officer and
Director of Managing General Partner,
Fourth Income Corp.
November 7, 2000 /s/ Jem A. Hudgins
--------------------------------
Jem A. Hudgins
Treasurer and Principal Financial and
Accounting Officer of Managing General
Partner, Fourth Income Corp.
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