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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
JULY 31, 1995 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
_____________________ TO _________________________
COMMISSION FILE NUMBER 0-13219
BOETTCHER PENSION INVESTORS LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
COLORADO 84-0948497
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
77 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60601
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (312) 574-6000
Indicate by checkmark 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 12 months (or 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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INDEX
Page
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PART I. Financial Information
Item 1. Financial Statements (unaudited)
Balance Sheets -
July 31, 1995 and October 31, 1994 3
Statements of Operations -
Three and nine months ended July 31, 1995 and 1994 4
Statement of Partners' Capital -
Nine months ended July 31, 1995 5
Statements of Cash Flows -
Nine months ended July 31, 1995 and 1994 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURE 15
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PART I. Financial Information
Item 1. Financial Statements
BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Balance Sheets
(Unaudited)
July 31, October 31,
Assets 1995 1994
------ ----------- -----------
Real estate investments, at gross cost
Properties held for sale $10,808,163 10,808,163
Less accumulated depreciation (1,183,871) (1,002,590)
Allowance for loss (1,086,827) (1,086,827)
----------- ----------
8,537,465 8,718,746
----------- ----------
Cash and cash equivalents at cost,
which approximates market value 655,817 540,941
Deferred leasing costs, net of
accumulated amortization of
$269,970 and $241,212, respectively 111,840 97,938
Accounts receivable and other assets 131,502 117,948
----------- ----------
$ 9,436,624 9,475,573
=========== ==========
Liabilities and Partners' Capital
---------------------------------
Mortgage payable $ 5,858,530 5,910,814
Accounts payable and accrued liabilities 15,142 21,996
Payable to managing general partner 44,905 7,663
Property taxes payable 56,007 76,965
Accrued interest payable 46,380 46,794
Other liabilities 58,534 39,266
----------- ----------
Total liabilities 6,079,498 6,103,498
----------- ----------
Partners' capital (deficit):
General partners (42,502) (42,502)
Limited partners 3,399,628 3,414,577
----------- ----------
Total partners' capital 3,357,126 3,372,075
----------- ----------
$ 9,436,624 9,475,573
=========== ==========
See accompanying notes to financial statements.
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BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Statements of Operations
Three and Nine Months Ended July 31, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months Ended
July 31, July 31,
------------------ -----------------
1995 1994 1995 1994
---- ---- ---- ----
Revenue:
Rental income $320,521 $318,316 $ 943,464 $ 947,690
Interest income 4,517 6,027 13,619 13,238
Tenant reimbursements and
other income 69,447 63,256 196,724 209,888
-------- -------- ---------- ----------
394,485 387,599 1,153,807 1,170,816
-------- -------- ---------- ----------
Expenses:
Interest 139,282 141,393 419,097 423,856
Depreciation and
amortization 70,808 69,207 210,039 206,096
Property taxes 31,197 32,462 93,589 97,886
Fees and reimbursements to
managing general partner 7,304 8,906 22,467 24,453
Other management fees 16,204 14,394 46,976 46,048
Repairs and maintenance 24,901 28,828 70,273 71,780
Utilities 13,480 9,285 33,305 29,492
General and administrative 17,809 17,734 58,670 56,877
-------- -------- ---------- ----------
320,985 322,209 954,416 956,488
-------- -------- ---------- ----------
Net Earnings $ 73,500 $ 65,390 $ 199,391 $ 214,328
======== ======== ========== ==========
Net earnings per limited
partnership unit using the
weighted average number of
limited partnership units
outstanding of 10,717 $6.86 $6.10 $18.61 $20.00
===== ===== ====== ======
See accompanying notes to financial statements.
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BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Statement of Partners' Capital
Nine Months ended July 31, 1995
(Unaudited)
Total
General Limited partners'
partners partners capital
-------- -------- ---------
Capital (deficit) at
November 1, 1994 $(42,502) 3,414,577 3,372,075
Distributions to limited partners - (214,340) (214,340)
Net earnings for the nine months
ended July 31, 1995 - 199,391 199,391
-------- --------- ---------
Capital (deficit) at
July 31, 1995 $(42,502) 3,399,628 3,357,126
======== ========= =========
See accompanying notes to financial statements.
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BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Statements of Cash Flows
(Unaudited)
Nine Months Ended
July 31,
--------------------------------
1995 1994
---- ----
Cash flows from operating activities:
Net earnings $ 199,391 214,328
Adjustments to reconcile net earnings
to net cash provided by
operating activities:
Depreciation and amortization 210,039 206,096
Change in operating assets and liabilities:
Increase in accounts receivable
and other assets (13,554) (18,258)
Decrease in accounts payable
and accrued liabilities (6,854) (16,114)
Increase in payable to managing
general partner 37,242 1,621
Decrease in property taxes payable (20,958) (21,193)
Decrease in accrued
interest payable (414) (55,916)
Increase (decrease) in other
liabilities 19,268 (26,563)
------ --------
Net cash provided by
operating activities 424,160 284,001
Cash flows used in investing activities -
Additions to real estate investments -- (15,517)
Increase in deferred leasing costs (42,660) (29,304)
------- --------
Net cash used in investing activities (42,660) (44,821)
-------- --------
Cash flows used by financing activities:
Distributions to limited partners (214,340) (80,378)
Reduction in mortgage payable (52,284) (53,969)
------- --------
Net cash used by financing activities (266,624) (134,347)
Net increase in cash and cash equivalents 114,876 104,833
Cash and cash equivalents at October 31 540,941 660,936
Cash and cash equivalents at July 31 $655,817 765,769
======== ========
Supplemental schedule of cash flow information:
Interest paid in cash during the period $419,511 $479,772
======== ========
See accompanying notes to financial statements.
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BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Notes to Financial Statements
July 31, 1995
(Unaudited)
(1) Financial Statement Adjustments and Footnote Disclosure
The accompanying financial statements are unaudited. However,
Boettcher Affiliated Investors L.P., ("BAILP"), the Managing General
Partner of Boettcher Pension Investors Ltd. (the "Partnership"),
believes all material adjustments necessary for a fair presentation of
the interim financial statements have been made and that such
adjustments are of a normal and recurring nature. Certain information
and footnotes normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
omitted pursuant to Securities and Exchange Commission rules and
regulations. BAILP believes the disclosures made are adequate to make
the information not misleading and suggests that the condensed
financial statements be read in conjunction with the financial
statements and notes thereto included in the Boettcher Pension
Investors Ltd. October 31, 1994 Annual Report.
(2) Significant Accounting Principles
Income Taxes
No provision has been made for federal income taxes, as the taxable
income (loss) is reported by the partners rather than the Partnership.
The Partnership reports certain transactions differently for tax and
financial statement purposes, primarily depreciation.
Real Estate Investments
Properties held for sale are recorded at the lower of cost or fair
market value, based upon independent appraised values.
Building and improvements are depreciated using the straight-line
method over an estimated useful life of 30 years. Equipment and
furnishings are depreciated using the straight-line method over an
estimated useful life of 10 years. Renewals and betterments are
capitalized and repairs and maintenance are charged to operations as
incurred.
Deferred Leasing Costs
Costs associated with the leasing of the Partnership's three retail
shopping centers are deferred and amortized over the life of the
related leases. These costs are comprised of lease commissions and
construction costs related to the buildout of tenant space.
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BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Notes to Financial Statements, Continued
July 31, 1995
(Unaudited)
(2) Continued
Statements of Cash Flows
For purposes of the statements of cash flows, cash and cash
equivalents include highly liquid debt instruments purchased with an
original maturity of three months or less. Cash and cash equivalents
are comprised of the following:
As of July 31,
1995 1994
------------------------
Money market fund $603,978 765,769
Operating cash 51,839 --
-------- -------
Cash and cash equivalents $655,817 765,769
======== =======
Reclassifications
Certain fiscal 1994 amounts have been reclassified for comparability
with fiscal 1995 financial statement presentation.
(3) Real Estate Investments
Clackamas Corner
On November 2, 1994, House of Fabrics, Inc. and its subsidiaries
("HOF"), including Fabricland, Inc. ("Fabricland"), filed to
reorganize under Chapter 11 of the U.S. Bankruptcy Code. Fabricland
is the Partnership's largest tenant at Clackamas Corner, occupying
10,000 square feet, with a base rental obligation of $80,000 per year.
One of the stated objectives of HOF's management for the
reorganization is the elimination of marginal stores and the
termination of the related leases. HOF's management recently received
an extension of time, until January 31, 1996, from the bankruptcy
court in which it may decide to reject or extend any real property
leases. To date, Fabricland has continued to make monthly rental
payments for its lease at Clackamas Corner. As such, the Managing
General Partner is unable to determine at this time whether or not the
lease will be terminated in conjunction with HOF's reorganization.
(4) Transactions with Related Parties
BAILP is the Managing Agent of the Partnership and is paid property
management, loan lease servicing, and acquisition fees for its
services to the Partnership. The property management fee is equal to
5% of gross receipts from the properties, less management fees paid to
others. The property management fee earned by BAILP amounted to
$3,176 for the three months ended July 31, 1995.
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BOETTCHER PENSION INVESTORS LTD.
(A Limited Partnership)
Notes to Financial Statements, Continued
July 31, 1995
(Unaudited)
(4) Continued
The Partnership also reimburses BAILP for its allocable share of
salaries of nonmanagement and nonsupervisory personnel providing
accounting, investor reporting and communications, and legal services
to the Partnership and allowable expenses related to the maintenance
and repair of data processing equipment used for or by the
Partnership. The amount due BAILP for such reimbursements amounted to
$4,128 for the three months ended July 31, 1995.
(5) Properties Held for Sale
As of July 31, 1995, the Partnership has recorded its real estate
investments as properties held for sale. The Managing General Partner
is attempting to sell the Properties in an orderly fashion consistent
with current market conditions, and plans to liquidate the Partnership
as soon as practicable. The Partnership's ability to sell Clackamas
Corner has been adversely affected by the recent bankruptcy filing of
the shopping center's major tenant, Fabricland, as more fully
described in Note 3. The Partnership has entered into three separate
listing agreements with unrelated real estate firms to act as the
exclusive selling agents for the sale of Parkway Village, Lindsay-Main
Plaza and Clackamas Corner. The Managing General Partner believes
that the sales of these Properties, if and when consummated, will
generate net proceeds to the Partnership after the payment of sales
costs, closing costs and the mortgage payable at Parkway; however, the
sales transactions may not be all cash and may include deferred payment
arrangements. The Partnership intends to apply any net sales proceeds
to first maintain sufficient cash reserves, as determined by the
Managing General Partner, and, thereafter, to make distributions to
limited partners.
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Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
For the three and nine months ended July 31, 1995, the Partnership generated
total revenue of $394,485 and $1,153,807, and incurred total expenses of
$320,985 and $954,416, resulting in net earnings of $73,500 and $199,391
respectively. A summary of the Partnership's operations and period-to-period
comparisons is presented below:
Three Months Ended July 31, Nine Months Ended July 31,
(dollars in thousands) (dollars in thousands)
---------------------------------------- ------------------------------------------------
Amount Amount
of % of %
1995 1994 Change Change 1995 1994 Change Change
---- ---- ------ ------ ----- ----- ------ ------
Total Revenue $394 387 7 1.8% $1,154 1,170 (16) (1.4%)
Total Expenses $321 322 1 0.3% 954 956 2 0.2%
---- --- -- ------ ----- ----
Net Earnings $ 73 65 8 12.3% $ 200 214 (14) (6.5%)
==== === == ===== ====== ===== ==== ======
The Partnership's net earnings increased $8,110 (12%) and decreased $14,937
(7%) for the three and nine months ended July 31, 1995 when compared with the
corresponding periods of fiscal 1994. The Partnership's properties generated
rental income of $320,521 and $943,464 for the three and nine months ended July
31, 1995, representing an increase of $2,205 (0.6%) and a decrease of $4,226
(0.4%) when compared with the corresponding periods in fiscal 1994. Parkway
Village's average occupancy decreased 3% and the average effective rental rate
increased $.38 to $9.32 for the third quarter of fiscal 1995 when compared with
the third quarter of fiscal 1994. Lindsay-Main Plaza's average occupancy
increased 7% to 45% and the average effective rental rate decreased $.01 to
$5.16 per square foot for the third quarter of fiscal 1995 when compared with
the third quarter of fiscal 1994. At Clackamas Corner, average occupancy
decreased 5% to an average of 95%, and the average effective rental rate
decreased $.20 to $10.58 for the third quarter of fiscal 1995 when compared
with the corresponding period in fiscal 1994.
Tenant reimbursements and other income increased $6,191 (10%) and decreased
$13,164 (6%) for the three and nine months ended July 31, 1995 when compared to
the corresponding periods in fiscal 1994. This decrease is due primarily to
increased vacancies at Parkway Village and Clackamas Corner, resulting in
decreased reimbursable expenses billed back to tenants.
A summary of average occupancy and average effective rental rates for the
Partnership's properties is presented below.
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For the three months ended July 31,
----------------------------------------
Shopping Center 1995 1994
--------------- ---- ----
Parkway Village
(102,356 net rentable square feet) 97% 100%
Average effective rental rate (a) $9.32 $8.94
Lindsay-Main Plaza
(37,000 net rentable square feet) 45% 38%
Average effective rental rate (a) $ 5.16 $ 5.17
Clackamas Corner
(26,500 net rentable square feet) 95% 100%
Average effective rental rate (a) $10.58 $10.78
(a) Average effective rental rates are stated in terms of an average
annual rate per square foot. Effective rates take into account the
effect of leasing concessions and bad debts. These rates are "triple
net". In addition to this base rent, the majority of tenants pay
their pro rata share of taxes, insurance and common area maintenance
expenses at the property.
Total expenses incurred by the Partnership for the three and nine months ended
July 31, 1995 were $320,985 and $954,416, respectively, representing relatively
no change when compared to the same periods in fiscal 1994. Property tax
expense decreased $4,297 for the nine months ended July 31, 1995 when compared
with the corresponding period in fiscal 1994, as property tax assessments were
appealed and decreased at both Lindsay Main and Clackamas Corner. Interest
expense decreased $4,759 for the nine months ended July 31, 1995 primarily due
to the general decrease in the proportion of interest versus principal over the
life of the mortgages. Depreciation and amortization expense increased $3,943
for the nine months ended July 31, 1995 when compared with the corresponding
period in 1994, the result of increased amortization of leasing costs
associated with the increased leasing efforts at all of the Partnership's
properties. All other expense items remained relatively constant for the nine
months ended July 31, 1995 when compared with the same period in 1994.
Liquidity and Capital Resources
Combined cash and cash equivalent balances, which represent Partnership cash
reserves, were $655,817 at July 31, 1995, representing an increase of $114,876
when compared with the fiscal 1994 year-end balance. Net cash provided by
operating activities for the nine months ended July 31, 1995 equaled $424,160.
As a result of the payment of property taxes in the first six months of fiscal
1995, property taxes payable decreased $20,958 while accounts receivable and
other assets, which include prepaid expenses, increased $13,554 when compared
with fiscal 1994 year-end balances. The payable to Managing General Partner
increased $37,242 at July 31, 1995 when compared to the fiscal 1994 year-end
balance, primarily due to the accrual of fees and reimbursable expenses related
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to operations for the nine months ended July 31, 1995. Accounts payable and
accrued liabilities decreased $6,854 at July 31, 1995 when compared to the
fiscal 1994 year-end balance due to payments in the second quarter of fiscal
1995 of lease commissions at all of the Partnership's properties and audit fees
related to the fiscal 1994 year-end audit.
Net cash used in investing activities for the nine months ended July 31, 1995
equaled $42,660 and consist solely of deferred leasing costs. The
Partnership's deferred leasing costs in fiscal 1995 include costs related to
lease commissions and tenant improvement costs associated with the leasing of
vacant space to new tenants and the renewal of existing tenants at all of the
Partnership's properties.
Net cash used by financing activities equaled $266,624 for the nine months
ended July 31, 1995 and is the combined result of distributions to limited
partners of $214,340 and a reduction in mortgage principal of $52,284 related
to the Parkway mortgage.
To the knowledge of the Managing General Partner, all properties are generally
in good physical condition. In the fourth quarter of fiscal 1995, the
Partnership anticipates additional tenant finish costs and lease commissions
total approximately $9,540 and $31,000, respectively. These tenant finish
costs and lease commissions are budgeted in anticipation of leasing vacant
space and renewing existing tenant leases at all of the Partnership's
properties. Should additional costs be required at the Partnership's
properties, it is currently anticipated that such funds would be made available
either from cash flow generated from property operations or from Partnership
cash reserves.
The Partnership is required under its Partnership Agreement to maintain cash
reserves of not less than 2% of aggregate capital contributions from limited
partners for normal repairs, replacements, working capital and other
contingencies. As of July 31, 1995, the Partnership had $655,817 in cash
reserves, while the minimum required amount was $214,340. The Partnership
intends to apply net cash flow generated from Partnership operations in fiscal
1995 to maintain sufficient cash reserves as determined by the Managing General
Partner. Thereafter, the Partnership intends to distribute to limited partners
operating cash flow deemed to be in excess of amounts required to fund
anticipated Partnership liabilities.
As of July 31, 1995 the Partnership has recorded its real estate investments as
properties held for sale. The Managing General Partner is attempting to sell
the Properties in an orderly fashion consistent with current market conditions,
and plans to liquidate the Partnership as soon as practicable. The
Partnership's ability to sell Clackamas Corner has been adversely affected by
the recent bankruptcy filing of the shopping center's major tenant, Fabricland,
as more fully described in Note 3 of the Notes to the Financial Statements as
contained in Item 1 of this report. The Partnership has entered into three
separate listing agreements with unrelated real estate firms to act as the
exclusive selling agents for the sale of Parkway Village, Lindsay-Main
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Plaza and Clackamas Corner. The Partnership believes that the sales of these
Properties, if and when consummated, will generate net proceeds to the
Partnership after the payment of sales costs, closing costs and the mortgage
payable at Parkway Village; however, the sales transactions may not be all cash
and may include deferred payment arrangements to the Partnership. The
Partnership intends to first apply any net sales proceeds to maintain
sufficient cash reserves, as determined by the Managing General Partner, and,
thereafter, to make distributions to limited partners.
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
No reports on Form 8-K were required to be filed by
the Registrant during the period for which this
report is filed.
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SIGNATURE
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.
BOETTCHER PENSION INVESTORS LTD.
(Registrant)
By: Boettcher Affiliated Investors L.P.
Managing General Partner
By: Boettcher Properties, Ltd.
Managing General Partner
By: BPL Holdings, Inc.
Managing General Partner
Dated: September 14, 1995 By: /s/ Thomas M. Mansheim
--------------------------
Thomas M. Mansheim
Treasurer; Principal
Financial and Accounting
Officer of the
Partnership
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