10-Q 1 d10q.txt FORM 10-Q DATED 09/30/2001 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 ---------------------------------------------------------------------------- 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

(See accompanying notes to unaudited financial statements) 3 COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP

4 COPLEY PENSION PROPERTIES VI A REAL ESTATE LIMITED PARTNERSHIP;

(See accompanying notes to unaudited financial statements) 5 COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP STATEMENTS OF PARTNERS' CAPITAL (Unaudited)

(See accompanying notes to unaudited financial statements) 6 COPLEY PENSION PROPERTIES VI; A REAL ESTATE LIMITED PARTNERSHIP SUMMARIZED STATEMENTS OF CASH FLOWS (Unaudited)

(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 ----------------------

Results of Operations ---------------------

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:

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

COPLEY PENSION PROPERTIES VI 10-Q