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, 2001 Commission File Number 0-17807
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Massachusetts 04-2988542
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 2001
PART I
FINANCIAL INFORMATION
2
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
BALANCE SHEETS
September 30, 2001 December 31, 2000
(Unaudited) (Audited)
------------------- ------------------
Assets
Real estate investments:
Property, net $ - $4,284,794
Other assets, net 25,336 -
Joint Venture held for disposition - 1,864,405
Cash and cash equivalents 1,839,886 2,053,663
---------- ----------
$1,865,222 $8,202,862
========== ==========
Liabilities and Partners' Capital
Accounts payable $ 77,987 $ 98,555
Deferred disposition fees 807,989 1,369,577
---------- ----------
Total liabilities 885,976 1,468,132
---------- ----------
Partners' capital:
Limited partners ($0 and $223.49,
respectively, per unit; 160,000 units
authorized, 48,788 units issued and
outstanding) 914,241 6,721,206
General partners 65,005 13,524
---------- ----------
Total partners' capital 979,246 6,734,730
---------- ----------
$1,865,222 $8,202,862
========== ==========
(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, 2001 September 30, 2001 September 30, 2000 September 30, 2000
------------------ ------------------ ------------------ ------------------
INVESTMENT ACTIVITY
Property rentals $ 77,073 $ 500,816 $203,759 $ 538,484
Property operating expenses (114,728) (224,854) (47,926) (156,746)
Depreciation and amortization - (94,905) (47,737) (125,549)
---------- ---------- -------- ---------
(37,655) 181,057 108,096 256,189
Joint venture earnings (losses) - 24,928 37,274 (30,336)
---------- ---------- -------- ---------
Total real estate activity (37,655) 205,985 145,370 225,853
---------- ---------- -------- ---------
Gain on sale of joint venture 7,370 970,260 - -
Gain on sale of property 3,699,118 3,699,118 - -
Reversal of deferred disposition fees 656,290 656,290 - -
Interest on cash equivalents 25,395 82,682 29,695 92,849
---------- ---------- -------- ---------
Total investment activity 4,350,518 5,614,335 175,065 318,702
---------- ---------- -------- ---------
PORTFOLIO EXPENSES
Management fee - 31,193 - -
General and administrative 43,223 119,599 42,813 121,549
---------- ---------- -------- ---------
43,223 150,792 42,813 121,549
---------- ---------- -------- ---------
Net income $4,307,295 $5,463,543 $132,252 $197,153
========== ========== ======== =========
4
COPLEY PENSION PROPERTIES VI
A REAL ESTATE LIMITED PARTNERSHIP;
Net income per limited
partnership unit $ 87.40 $110.87 $ 2.68 $ 4.00
======= ======= ======= =======
Cash distributions per limited
partnership unit $150.40 $229.89 $ - $ 2.81
======= ======= ======= =======
Number of limited partnership units
outstanding during the period 48,788 48,788 48,788 48,788
======= ======= ======= =======
(See accompanying notes to unaudited financial statements)
5
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, 2001 September 30, 2001 September 30, 2000 September 30, 2000
----------------------- ------------------------ -------------------- ----------------------
General Limited General Limited General Limited General Limited
Partners Partners Partners Partners Partners Partners Partners Partners
--------- ------------ --------- ------------- -------- ---------- --------- -----------
Balance at beginning
of period $25,086 $ 3,987,734 $13,524 $ 6,721,206 $10,475 $6,419,393 $11,211 $6,492,235
Cash distributions (3,154) (7,337,715) (3,154) (11,215,873) - - (1,385) (137,094)
Net income 43,073 4,264,222 54,635 5,408,908 1,323 130,929 1,972 195,181
-------- ----------- -------- ------------ -------- ---------- -------- ----------
Balance at end
of period $65,005 $ 914,241 $65,005 $ 914,241 $11,798 $6,550,322 $11,798 $6,550,322
======== =========== ======== ============ ======== ========== ======== ==========
(See accompanying notes to unaudited financial statements)
6
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
SUMMARIZED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30,
2001 2000
------------ ----------
Net cash provided by operating activities $ 160,648 $ 265,667
------------ ----------
Cash flows from investing activities:
Net proceeds from sale of investments 10,870,621 -
Deferred disposition fee 94,703 -
Investment in property (21,258) (299,431)
Investment in joint venture (99,464) (195,474)
------------ ----------
Net cash provided by (used in)
investing activities 10,844,602 (494,905)
------------ ----------
Cash flows from financing activities:
Distributions to partners (11,219,027) (138,479)
------------ ----------
Net cash used in financing activities (11,219,027) (138,479)
------------ ----------
Net decrease in cash and cash equivalents (213,777) (367,717)
Cash and cash equivalents:
Beginning of period 2,053,663 2,305,383
------------ ----------
End of period $ 1,839,886 $1,937,666
============ ==========
(See accompanying notes to unaudited financial statements)
7
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, 2001 and December 31, 2000, its results of
operations, and partners' capital for the three and nine months ended September
30, 2001 and 2000 and its cash flows for the nine month periods ended September
30, 2001 and 2000. These adjustments are of a normal recurring nature.
See notes to financial statements included in the Partnership's 2000 Annual
Report on Form 10-K for additional information relating to the Partnership's
financial statements.
Note 1 - Organization and Business
Copley Pension Properties VI; A Real Estate Limited Partnership (the
"Partnership") is a Massachusetts limited partnership organized for the purpose
of investing primarily in newly constructed and existing income producing real
properties. It primarily serves as an investment for qualified pension and
profit sharing plans and other organizations intended to be exempt from federal
income tax. The Partnership commenced operations in July 1988, and has disposed
of all its real estate investments as of September 30, 2001. The Partnership
intends to liquidate and dissolve in 2002.
Note 2 - Investment in Joint Venture
On February 26, 2001, the Prentiss Copystar joint venture investment in which
the Partnership and an affiliate were entitled to 69% and 31%, respectively, of
the operating activity, sold its property to an unaffiliated third party for
gross proceeds of $4,575,000, of which the Partnership's share was $3,156,750.
The Partnership received its 69% share of the net proceeds, $3,053,760 after
closing costs, and had recognized an initial gain on the sale of $972,678. Due
to additional costs of sale, offset by a receipt of additional proceeds in the
third quarter, the gain was decreased to $970,260 ($19.69 per limited
partnership unit). A disposition fee of $94,703 was accrued but not paid to AEW
Real Estate Advisors, Inc. (the "Advisor"). In accordance with the Partnership
agreement, a portion of this previously accrued fee was reversed during the
third quarter of 2001, decreasing the fee to $44,826. On March 29, 2001, the
Partnership made a capital distribution of $2,683,340 ($55.00 per limited
partnership unit) from the proceeds of the sale.
8
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
Summarized Financial Information
The following summarized financial information is presented for the Prentiss
Copystar joint venture:
Assets and Liabilities
----------------------
September 30, 2001 December 31, 2000
------------------ -----------------
Assets
Real property, at cost less
accumulated depreciation of
$496,142 at December 31, 2000 - $2,746,869
Other $ - 73,107
------------------ ----------
- 2,819,976
Liabilities - 106,201
------------------ ----------
Net assets $ - $2,713,775
================== ==========
Results of Operations
---------------------
Nine Months Ended September 30,
2001 2000
------- --------
Revenue:
Rental income $87,305 $ 58,173
------- --------
87,305 58,173
------- --------
Expenses:
Operating expenses 51,177 63,474
Depreciation and amortization 12,151 38,446
------- --------
63,328 101,920
------- --------
Net income (loss) $23,977 $(43,747)
======= ========
Liabilities and expenses exclude amounts owed and attributable to the
Partnership and its affiliate on behalf of their various financing arrangements
with the joint venture.
9
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
Note 3 - Property
On August 8, 2001, the Partnership sold its Wilmington Industrial investment
to an unaffiliated third party for gross proceeds of $8,217,781. The Partnership
received net proceeds of $7,911,564 and recognized a gain of $3,699,118 ($75.06
per limited partnership unit) on the sale. On September 28, 2001, the
Partnership made a capital distribution of $7,025,472 ($144.00 per limited
partnership unit) from the proceeds of the sale.
The following is a summary of the Wilmington Industrial investment in
property:
September 30, 2001 December 31, 2000
------------------ ------------------
Land $ - $ 2,770,056
Buildings, improvements and
other capitalized costs - 5,336,205
Investment valuation allowance - (1,500,000)
Accumulated depreciation and
amortization - (2,350,377)
Net operating assets 25,336 28,910
------------------ -----------
$25,336 $ 4,284,794
================== ===========
At September 30, 2001 net operating assets consists of property working capital.
10
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 each of
1998 and 2001. Through September 30, 2001, capital of $48,787,999 ($1,000 per
limited partnership unit) has been returned to the limited partners; $45,903,165
as a result of sales and $2,884,834 as a result of a discretionary reduction of
original working capital previously held in reserves.
At September 30, 2001, the Partnership had $1,839,886 in cash and cash
equivalents, which is being retained as a reserve in connection with the
liquidation of the Partnership and for the payment of deferred disposition fees
of $807,989. A distribution of operational cash previously held in reserves was
made on July 26, 2001 in the amount of $6.40 per limited partnership unit. A
capital distribution of original working capital previously held in reserves was
made on April 26, 2001 in the amount of $24.49 per limited partnership unit.
With the exception of the operational cash distribution of reserves discussed
above, there have been no operating cash distributions made since the fourth
quarter of 1999 due to Prentiss Copystar's vacancy from September 1999 through
August 2000 and its subsequent sale in February 2001 as well as insufficient
cash flow from Wilmington Industrial as a result of property level obligations
which reduced its cash flow to the Partnership.
11
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
Results of Operations
- ---------------------
Form of Real Estate Investments
The Wilmington Industrial investment was a wholly-owned property which
was sold on August 8, 2001. The Prentiss Copystar real estate investment was
structured as a joint venture and was sold on February 26, 2001.
Operating Factors
As mentioned above, the Prentiss Copystar joint venture investment in which
the Partnership and an affiliate were entitled to 69% and 31% of the operating
activity, respectively, sold its property on February 26, 2001. The Partnership
recognized its 69% share of the gain of $970,260. At the time of the sale,
Prentiss Copystar was 100% leased.
As mentioned above, the Wilmington Industrial investment sold its property
on August 8, 2001. The Partnership recognized a gain of $3,699,118. At the
time of the sale, Wilmington Industrial was 100% leased.
Investment Results
Interest income on cash equivalents for the three and nine months ended
September 30, 2001, was $25,395 and $82,682, respectively, compared to $29,695
and $92,849 for the same periods in 2000. The decreases of approximately $4,000
and $10,000 for the comparative three and nine month periods are primarily due
to lower average investment balances.
For the three and nine month periods ended September 30, 2001, real estate
operating results were $(37,655) and $205,985, respectively, compared to
$145,370 and $225,853 for the same periods in 2000. The comparative three month
decrease of $183,025 is due to both the sale of Wilmington Industrial in August
2001 and the subsequent write-off of a tenant receivable at the time of sale.
The overall nine month decrease of $19,868 is due to both the sale of Wilmington
Industrial in August 2001 and the sale of Prentiss Copystar in February 2001
offset by an increase in joint venture earnings in 2001 compared to joint
venture losses in 2000.
The Partnership recognized $656,290 in revenue during the three and nine
month periods ended September 30, 2001, which was attributable to an adjustment
of previously accrued disposition fees, in accordance with the Partnership
agreement.
12
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
Portfolio Expenses
The Partnership management fee is 9% of distributable cash flow from
operations after any increase or decrease in working capital reserves as
determined by the managing general partner. General and administrative expenses
consist primarily of real estate appraisal, printing, legal, accounting and
investor servicing fees.
The Partnership management fee during the nine month period ended September
30, 2001, is due to the distribution of operational cash flow previously held in
reserves. During the respective three and nine month periods of 2000 and 2001,
general and administrative expenses remained relatively stable.
13
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 2001
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits: none
b. Reports on Form 8-K: During the quarter ended September 30, 2001,
one Current Report on Form 8-K was filed on August 21, 2001
reporting on Item No. 2. (Acquisition or Disposition of Assets) and
Item No. 7 (Financial Statements and Exhibits), relating in both
cases to the August 8, 2001 sale of Wilmington Industrial.
14
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 13, 2001
/s/ Alison L. Husid
-------------------------------
Alison L. Husid
President, Chief Executive Officer
And Director of Managing General Partner, Sixth
Copley Corp.
November 13, 2001
/s/ Jonathan Martin
--------------------------------
Jonathan Martin
Principal Financial and Accounting
Officer of Managing General Partner,
Sixth Copley Corp.
15