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 June 30, 2002 Commission File Number 0-17808
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Massachusetts 04-2940131
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
World Trade Center East
Two Seaport Lane, 16th Floor
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
1
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED JUNE 30, 2002
PART I
FINANCIAL INFORMATION
----------------------
2
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENTS OF NET ASSETS IN LIQUIDATION
June 30, 2002 December 31, 2001
(Unaudited) (Audited)
------------- -----------------
ASSETS
Other assets $ - $ 10,058
Cash and cash equivalents 760,376 891,935
-------- --------
$760,376 $901,993
======== ========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 16,799 $129,340
Accrued expenses for liquidation 168,941 203,425
-------- --------
Total liabilities 185,740 332,765
-------- --------
Net assets in liquidation:
Limited partners ($96 per
unit; 160,000 units
authorized, 82,228
units issued and outstanding) 562,404 557,050
General partners 12,232 12,178
-------- --------
Total partners' capital 574,636 569,228
-------- --------
$760,376 $901,993
======== ========
(See accompanying notes to unaudited financial statements)
3
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENTS OF CHANGES OF NET ASSETS IN LIQUIDATION
(Unaudited)
Three Months Ended Six Months Ended
June 30, 2002 June 30, 2002
----------------- -----------------
Net Assets in liquidation at
beginning of period $ 571,126 $ 569,228
--------- ---------
Increase during period:
Operating Activities
Interest Income 3,510 5,408
--------- ---------
Net change in net assets in liquidation 3,510 5,408
--------- ---------
Net assets in liquidation at
end of period $ 574,636 $ 574,636
========= =========
(See accompanying notes to unaudited financial statements)
4
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, 2001 June 30, 2001
-------------- ----------------
INVESTMENT ACTIVITY
Property rentals $(36,160) $ 128,772
Interest income on loan to
ground lessor 4,452 35,189
Property operating expenses (129) (87,912)
Ground rent expense - (109,748)
-------- ----------
Total real estate operations (31,837) (33,699)
Gain (loss) on sale of property (1,398) 1,630,765
Reversal of deferred disposition fees - 1,956,543
-------- ----------
Total real estate activity (33,235) 3,553,609
Interest on cash equivalents 47,931 86,375
-------- ----------
Total investment activity 14,696 3,639,984
-------- ----------
Portfolio Expenses
Management fee - 42,305
General and administrative 57,490 118,002
-------- ----------
57,490 160,307
-------- ----------
Net Income (Loss) $(42,794) $3,479,677
======== ==========
Net income (loss) per
limited partnership unit $ (0.52) $ 41.89
======== ==========
Cash distributions per
limited partnership unit $ 138.15 $ 140.56
======== ==========
Number of limited
partnership units outstanding
during the period 82,228 82,228
======== ==========
(See accompanying notes to unaudited financial statements)
5
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
SUMMARIZED STATEMENT OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30, 2001
----------------
Net cash provided by operating activities $ 86,310
------------
Cash flows from (used in) investing activities:
Net proceeds from sale of investment 8,327,316
Investment in property (10,000)
Repayment received on loan to
ground lessor 1,358,470
------------
Net cash provided by investing activities 9,675,786
------------
Cash flows from financing activities:
Distributions to partners (11,564,247)
------------
Net decrease in cash
and cash equivalents (1,802,151)
Cash and cash equivalents:
Beginning of period 2,762,388
------------
End of period $ 960,237
============
(See accompanying notes to unaudited financial statements)
6
NEW ENGLAND PENSION PROPERTIES V;
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 June 30, 2002 and December 31, 2001 and the changes of
net assets in liquidation and the results of its operations for the three and
six month periods ended June 30, 2002 and 2001, respectively, and its cash flows
for the six months ended June 30, 2001. These adjustments are of a normal
recurring nature.
See notes to financial statements included in the Partnership's 2001 Annual
Report on Form 10-K for additional information relating to the Partnership's
financial statements.
NOTE 1 - ORGANIZATION AND BUSINESS
- ----------------------------------
New England Pension Properties V; 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 entities intended to be exempt from federal
income tax. The Partnership commenced operations in May, 1987 and had disposed
of all of its real estate investments as of December 31, 2001. The Partnership
sold its last remaining asset in March 2001. On December 31, 2001, the
Partnership adopted a plan of liquidation and intends to liquidate and dissolve
in 2002.
In connection with its adoption of a plan of liquidation on December 31,
2001, 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 - PROPERTY
- -----------------
On March 27, 2001, the Partnership sold the Santa Rita Plaza property for
$8,850,000. The Partnership received net proceeds of $8,311,296 and recognized a
gain of $1,614,745 ($19.44 per limited partnership unit). Subsequent to the sale
date, the note receivable and accrued interest related to this property in the
amount of $1,338,797 was paid in full to the Partnership on April 10, 2001. On
April 26, 2001 the Partnership made a capital distribution of $9,373,992
($114.00 per limited partnership unit) consisting of the sale proceeds as well
as the note receivable and accrued interest.
7
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
NOTE 3 - Accrued Expenses for liquidation
- -----------------------------------------
Accrued expenses for liquidation as of June 30, 2002 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 three
and six month periods ended June 30, 2002, the Partnership incurred $12,693 and
$34,484, respectively, of such expenses.
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.
8
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Accounting Policies
- -------------------
Revenue Recognition
The Partnership recognizes rental revenue on a straight-line basis over the
lease terms.
The Partnership accounts for its investments in joint ventures using the
equity method of accounting. Under the equity method of accounting, the net
equity investment of the Partnership is reflected on the balance sheets, and the
Partnership's share of net income or loss from the joint ventures is included in
the statements of operations.
The Partnership records real estate sales at the time a sale is
consummated. A sale is consummated when the parties are bound by the terms of a
contract, all consideration has been exchanged, all conditions precedent to
closing have been met, and title has passed from seller to buyer.
Liquidation Basis of Accounting
The Partnership adopted a plan of liquidation on December 31, 2001, and, as
a result, 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.
Accrued expenses for liquidation as of December 31, 2001 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. 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, if any, are unknown and are not estimable at this
time. Similarly, there can be no assurance as to the timing of a distribution of
the Partnership's assets or the amount of assets that will be distributed to the
Partnership's Unit holders.
Liquidity and Capital Resources
- -------------------------------
The Partnership completed its offering of limited partnership units in
December 1988. A total of 83,291 units were sold. The Partnership received
proceeds of $74,895,253, net of selling commissions and other offering costs,
which have been used for investment in real estate, for the payment of related
acquisition costs and for working capital reserves. The Partnership made nine
real estate investments, all of which have been sold: two in 1994, two in 1997,
three in 1999, one in 2000 and one in 2001. As a result of the sales and other
capital transactions, capital of $74,404,636 has been returned to the limited
partners through June 30, 2002. The adjusted capital contribution was reduced to
$952 from $1,000 per unit in 1994, to $924 in 1995, to $616 in 1997, to $367 in
1999 to $229 in 2000 and to $96 in 2001.
At June 30, 2002, the Partnership had $760,376 in cash and cash
equivalents, which is being retained as a reserve in connection with the
liquidation of the Partnership. Distributions of cash from operations and
operational cash previously held in reserves relating to the first quarter of
2001 were made at an annualized rate of 9% on the adjusted capital contribution
of $229.00 per unit. At the time of the first quarter distribution, the
Partnership made two capital distributions: one consisting of original working
capital previously held in reserves in the amount of $1,562,332 and the other
consisting of the Santa Rita Plaza sales proceeds in the amount of $9,373,992.
The sale distribution also included the note receivable and accrued interest
proceeds received subsequent to quarter end in the amount of $1,338,797. There
have been no other distributions since that time.
9
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
Results of Operations
- ---------------------
Form of Real Estate Investment
Santa Rita Plaza was a wholly-owned property. Santa Rita Plaza was sold on
March 27, 2001.
Operating Factors
As mentioned above, the Santa Rita Plaza property was sold on March 27,
2001 and the Partnership recognized a gain of $1,614,745. At the time of the
sale, Santa Rita Plaza was 100% occupied.
Investment Results
The operating results for the three and six month periods ended June 30,
2002 and 2001 are not comparable due to the sale of the Partnership's last
remaining property in March 2001, as discussed above.
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. The Partnership incurred management
fees during the six month period ended June 30, 2001 related to its final
operational cash distribution.
General and administrative expenses consist primarily of real estate
appraisal, printing, legal, accounting and investor servicing fees. General and
administrative expenses for the three and six month periods ended June 30, 2001
were $57,490 and 118,002, respectively.
Costs to dissolve and liquidate the Partnership include legal fees,
accounting fees, tax preparation fees, filing fees and other professional
services. During the three and six month periods ended June 30, 2002, the
Partnership incurred $12,693 and $34,484, respectively of such expenses.
10
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED JUNE 30, 2002
PART II
OTHER INFORMATION
-------------------
Item 6. Reports on Form 8-K
Reports on Form 8-K: No current reports on Form 8-K
were filed during the quarter ended June 30, 2002.
11
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.
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
(Registrant)
August 13, 2002
/s/ Alison L. Husid
-------------------------------
Alison L. Husid
President, Chief Executive Officer
and Director of Managing General Partner,
Fifth Copley Corp.
August 13, 2002
/s/ Jonathan Martin
--------------------------------
Jonathan Martin
Principal Financial and Accounting
Officer of Managing General Partner,
Fifth Copley Corp.
12
STATEMENT PURSUANT TO 18 U.S.C.SS.1350
Pursuant to 18 U.S.C. ss.1350, each of the undersigned certifies that this
Quarterly Report on Form 10-Q for the period ended June 30, 2002 fully complies
with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 and that the information contained in this report fairly presents, in
all material respects, the financial condition of New England Pension Properties
V at the end of such period and the results of operations of New England Pension
Properties V for such period.
Dated: August 13, 2002 /s/ Alison L. Husid
--------------------------------------
President and Chief Executive Officer
of the Managing General Partner, Fifth
Copley Corp.
Dated: August 13, 2002 /s/ Jonathan Martin
--------------------------------------
Treasurer and Chief Financial Officer
of the Managing General Partner, Fifth
Copley Corp.
13