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 ---------------------------------------------------------------------------- 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 COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 2000 PART I FINANCIAL INFORMATION 2 COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP BALANCE SHEETS September 30, 2000 December 31, 1999 (Unaudited) (Audited) ------------------- ------------------ 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 ========== ========== (See accompanying notes to unaudited financial statements) 3 COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP 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 ------------------ ------------------ ------------------ ------------------ 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 ======= ========= ======= ========= (See accompanying notes to unaudited financial statements) 4 COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP STATEMENTS OF PARTNERS' CAPITAL (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 -------------------- ---------------------- ---------------------- ---------------------- General Limited General Limited General Limited General Limited Partners Partners Partners Partners Partners Partners Partners Partners -------- ---------- --------- ----------- --------- ----------- --------- ----------- 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 ======== ========== ======== ========== ======== ========== ======== ========== (See accompanying notes to unaudited financial statements) 5 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 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 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 ---------- ---------- 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. 8 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): September 30, 2000 December 31, 1999 ------------------- ------------------ 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 =========== =========== 9 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. 10 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. 11 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. 12 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 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