Item 3. Legal Proceedings - --------------------------
As a member of the NBA, the Partnership is a defendant along with the other members in various lawsuits incidental to the NBA's basketball operations. The Partnership will generally be liable, jointly and severally, with all other members of the NBA for the costs of defending such lawsuits and any liabilities of the NBA which might result from such lawsuits.
PART II
Item 5.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters - ------------------------------------------------------------------------------
The Partnership's Units are listed on the New York Stock Exchange and traded under the symbol "BOS". The following table sets forth, for the periods, indicated, the high and low sales prices per Unit on the New York Stock Exchange and cash distributions per Unit to Unitholders for the years ended June 30, 1996 and June 30, 1995, respectively.
As of September 20, 1996, the approximate number of registered unitholders of the Partnership's Units was 66,510.
Part II
Item 6.
Item 6. Selected Financial Data - --------------------------------
Boston Celtics Limited Partnership and subsidiaries consolidated - (000's omitted, except for per unit data)
Boston Celtics Limited Partnership and subsidiaries consolidated - (000's omitted, except for per unit data)
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - --------------------------------------------------------------------------------
General
Consolidated Income from Continuing Operations of Boston Celtics Limited Partnership and its Subsidiaries for the year ended June 30, 1996 was $15,787,000 or $2.59 per unit on revenues of $64,780,000 and Consolidated Net Income was $54,201,000 or $8.89 per unit compared with Consolidated Income from Continuing Operations of $5,517,000 or $0.84 per unit on revenues of $52,325,000 and Consolidated Net Income of $16,156,000 or $2.43 per unit during the year ended June 30, 1995.
The Partnership reported a Consolidated Loss from Continuing Operations and a Consolidated Net Loss for the three months ended June 30, 1996 of $767,000 or $0.13 per unit on revenues of $9,103,000 compared with Consolidated Income from Continuing Operations of $4,403,000 or $0.67 per unit on revenues of $9,404,000 and a Consolidated Net Income of $7,602,000 or $1.15 per unit for the three months ended June 30, 1995.
The previously reported transaction between the Partnership and Fox Television, Inc. (FTS) pursuant to which FTS acquired Boston Celtics Broadcasting Limited Partnership (BCBLP), which owned and operated television station WFXT, was closed on July 7, 1995. Accordingly, the income statement has been restated for all periods presented to report the results of operations of television station WFXT and radio station WEEI, sold on June 30, 1994, as discontinued operations. Gains from the sale to FTS of an option to acquire a 26% interest in BCBLP ($14,640,000) and the sale of radio station WEEI ($2,794,000) are included in discontinued operations in 1994, net of applicable income taxes ($3,150,000). The remaining gain from the sale of BCBLP to FTS ($56,101,000, net of related income taxes of $17,770,000) was included in income from discontinued operations in July 1995 when realized.
Income from continuing operations for the year ended June 30, 1996 includes increased revenues from ticket sales ($13,213,000) as a result of the increased seating capacity of the FleetCenter arena which opened for the 1995-96 basketball season. Income from continuing operations for the year ended June 30, 1995 includes league expansion revenue ($7,114,000), increased player compensation ($8,965,000) and increased net interest expense ($1,000,000).
Income from continuing operations for the three months ended June 30, 1995 includes $7,114,000 in non-recurring income from league expansion and $1,217,000 in non-recurring playoff net income. Excluding these items, continuing operations for the three months ended June 30, 1995 would have resulted in a loss of $3,928,000 as compared to a loss from continuing operations of $767,000 for the three months ended June 30, 1996. The reduction in the loss is primarily the result of increased revenues from ticket sales ($1,687,000) as a result of the increased seating capacity of the FleetCenter arena which opened for the 1995-96 basketball season.
The Boston Celtics derive revenues principally from the sale of tickets to home games and the licensing of television, cable network and radio rights. A large portion of the Boston Celtics' annual revenues and operating expense is determinable at the commencement of each basketball season based on season ticket sales and the Boston Celtics' multi-year contracts with its players and broadcast organizations.
The operations and financial results of the Boston Celtics are seasonal. On a cash flow basis, the Boston Celtics receive a substantial portion of their receipts from the advance sale of season tickets during the months of June through October, prior to the commencement of the NBA regular season. Cash receipts from playoff ticket sales are received in March of any year for which the team qualifies for league playoffs. Most of the Boston Celtics' operating expenses are incurred and paid during the regular season, which extends from early November through late April.
For financial reporting purposes the Boston Celtics recognize revenues and expenses on a game-by-game basis. Because the NBA regular season begins in November, the first quarter which ends on September 30th, will generally include limited or no revenue and will reflect a loss attributable to general and administrative expenses incurred in the quarter. Based on the present NBA game schedule, the Partnership will generally recognize approximately one-third of its annual regular season revenue in the second quarter, approximately one-half of such revenue in the third quarter and the remainder in the fourth quarter, and it will recognize its playoff revenue, if any, in the fourth quarter.
Results of Operations
The following discussion compares results of continuing operations of the Partnership and its subsidiaries for the year ended June 30, 1996 compared with the year ended June 30, 1995 and for the year ended June 30, 1995 compared with the year ended June 30, 1994.
Revenues from regular season ticket sales increased by $13,213,000 or 60% in fiscal 1996 compared to 1995 and by $1,798,000 or 9% in fiscal 1995 compared to 1994. The increase in 1996 resulted primarily from the move to the FleetCenter arena which has an increased seating capacity of approximately 4,400 seats as compared to the Boston Garden. The increase in 1995 resulted primarily from an increase in ticket prices.
Regular season television and radio rights fees revenues increased by $1,116,000 or 5% in fiscal 1996 compared to 1995 and $1,788,000 or 9% in fiscal 1995 compared to 1994. The increases are primarily the result of increases in the NBA's national broadcasting contracts.
Other, principally promotional advertising revenues was flat in fiscal 1996 as compared to 1995 and increased by $2,242,000 or 43% in fiscal 1995 compared to 1994. The increase in fiscal 1995 is principally due to increased revenues from promotional activities ($1,721,000) and increased proceeds received from NBA properties from the licensing of novelty type products ($554,000).
There were no playoff games played by the Boston Celtics in the 1995-96 season, accordingly, there were no playoff revenues or expenses in fiscal 1996. The Boston Celtics played two home playoff games in fiscal 1995 which resulted in $1,913,000 of revenue. Playoff revenues vary from year to year depending on the number of home games played and the availability of such games for local television broadcast, and playoff expenses vary depending on the number of games played.
Team expenses decreased by $3,312,000 or 11% in fiscal 1996 compared to fiscal 1995 primarily as a result of decreased player compensation ($3,311,000) as a result of changes in team player personnel. Team expenses increased by $8,735,000 or 39% in fiscal 1995 compared to fiscal 1994 primarily as a result of increased player compensation ($8,965,000).
Game expenses, primarily arena rental payments and the NBA assessment on gate receipts, decreased by $274,000 in fiscal 1996 compared to 1995 primarily as a result of the elimination of arena rental expense (a reduction of $1,146,000 from fiscal 1995) partially offset by an increase in NBA assessments due to the increased ticket revenues ($635,000). Game expenses increased by $119,000 or 4% in fiscal 1995 compared to 1994 primarily as a result of increased NBA assessments ($111,000) due to the increase in ticket revenues in fiscal 1995.
Basketball playoff expense was $696,000 in fiscal 1995, primarily expenses related to the two home games played. There were no playoff games played in fiscal 1996 or 1994.
General and administrative expenses increased $967,000 or 7% in fiscal 1996 compared to 1995 and $2,782,000 or 25% in fiscal 1995 compared to 1994. The increase in fiscal 1996 is primarily attributable to increased professional, consulting and legal expenses ($1,076,000), increased administrative salaries ($1,184,000) and increased management fees ($219,000) partially offset by reduced expense related to certain options to acquire units of partnership interest($1,322,000). The increase in fiscal 1995 is primarily attributable to increased expense related to certain options to acquire units of partnership interest($2,324,000) and increased administrative salaries ($584,000).
Selling and promotional expenses increased $281,000 or 10% in fiscal 1996 compared to 1995 and $1,296,000 or 93% in fiscal 1995 compared to 1994. The increase in 1996 compared to 1995 is primarily attributable to increased net sponsorship costs. The increase in fiscal 1995 compared to 1994 is primarily attributable to increased promotional and sponsorship costs ($740,000) and increased salary costs ($476,000).
Total depreciation increased $55,000 or 63% in fiscal 1996 compared to 1995 and $3,000 or 4% in fiscal 1995 compared to 1994. The increases in 1996 and 1995 are primarily attributable to additional depreciation related to additions to property and equipment and leasehold improvements in leased office space and at the FleetCenter.
Interest expense decreased $2,687,000 or 30% in fiscal 1996 compared to 1995 and increased $5,061,000 or 126% in fiscal 1995 compared to 1994. The decrease in 1996 is a result of the payment of an $85,000,000 borrowing in July 1995 (reduction of $4,562,000) partially offset by the interest expense on the notes issued on the redemption of partnership units ($2,009,000). The increase in fiscal 1995 was primarily attributable to increased borrowings ($4,658,000 in 1995). In addition, the 1995 increase included the effect of an increase in interest rates ($359,000).
The Partnership had interest income of $8,175,000 and $6,508,000 in fiscal 1996 and 1995, respectively. Interest income increased $1,667,000 or 26% in fiscal 1996 compared to 1995 and $4,160,000 or 177% in fiscal 1995 compared to 1994. The increases are attributable to interest earned on the short-term investment of larger amounts of available funds.
Liquidity and Capital Resources
At June 30, 1996 the Partnership had approximately $5,982,000 of cash and cash equivalents, $46,764,000 of marketable securities and $78,723,000 of other short-term investments. In addition to these amounts, sources of funds available to the Partnership include funds generated by operations and capital contributions from partners. These resources will be used to repay commercial bank borrowings and notes related to redeemed partnership units (see Note O of notes to consolidated financial statements) and for general partnership purposes, working capital needs or for possible investments and/or acquisitions. The management of the General Partner from time to time reviews and evaluates investment and acquisition opportunities on behalf of the Partnership and investments and/or acquisitions may be made or consummated by the General Partner, on behalf of the Partnership, at such times and upon such prices and other terms as the General Partner deems to be in the best interests of the Partnership and all of its Unitholders.
During the year ended June 30, 1996, a cash distribution of $1.50 per Unit was paid to the Unitholders of BCLP. Future distributions will be determined by the General Partner based among other things on available resources and the needs of the Partnership. Management believes that its cash, cash equivalents and marketable securities together with cash from operations will provide adequate cash for the Partnership and its subsidiaries to meet their cash requirements through June 30, 1997.
Item 8.
Item 8. Financial Statements and Supplementary Data - ----------------------------------------------------
See Item 14.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant - -----------------------------------------------------------
General Partner
The General Partner of the Partnership is Celtics, Inc., a Delaware corporation organized in 1986 (the "General Partner") which is wholly owned by Walcott Partners, L.P., a Gaston family partnership, and Paul R. Dupee, Jr. The Partnership's activities are managed and controlled by the General Partner.
The General Partner of CLP is Boston Celtics Corporation (the "Basketball General Partner"). Paul E. Gaston, Don F. Gaston (Paul Gaston's father) and Paul R. Dupee, Jr. are the sole stockholders of the Basketball General Partner. CLP's activities are managed and controlled by the Basketball General Partner.
The General Partner of BCCLP is Celtics Communications, Inc. (the "General Partner of the Broadcast Operations"). Paul E. Gaston, Don F. Gaston and Paul R. Dupee, Jr. are the sole stockholders of the General Partner of the Broadcast Operations. Prior to their sale, the Broadcast Operations' activities were managed and controlled by the General Partner of the Broadcast Operations.
The interest of Alan Cohen in Celtics, Inc. was acquired by Walcott Partners L.P. and his interests in Boston Celtics Corporation and Celtics Communications, Inc. were acquired by Paul E. Gaston on August 30, 1995. See Note O of Notes to Consolidated Financial Statements for a description of these redemptions.
Management fee obligations of $1,565,000, $2,334,000 and $2,873,942 applicable to Boston Celtics Corporation, general partner of CLP, and Celtics Communications, Inc., general partner of BCCLP and BCBLP were charged to operations during the years ended June 30, 1996, 1995, and 1994, respectively. Boston Celtics Corporation receives a management fee of $750,000 per annum subject to annual increases based on annual cash flows from basketball operations after June 30, 1989. Celtics Communications, Inc. received management fees from BCCLP (as a result of revenues generated by Radio Station WEEI AM-590)and BCBLP based on 2% percent of sales until these operations were sold in the years ended June 30, 1994 and 1996.
In accordance with the partnerships' partnership agreements, each item of income, gain, loss and deduction is allocated and distributions are made to the partners and Unitholders in accordance with their respective percentage interests (excluding earnings of subsidiary corporate entities which are taxed directly).
Directors and Executive Officers
The following table sets forth, for each of the directors and executive officers of the General Partner, and certain officers of the Basketball Subsidiary Partnership, his or her principal occupation, age and business experience during the past five years. All of the directors and officers are U.S. citizens and the business address of each is c/o Boston Celtics Limited Partnership, 151 Merrimac Street, Boston, Massachusetts 02114.
The General Partner has an Audit Committee composed of Mr. Leithead and Mr. Marsh, independent directors and Mr. Paul Gaston. The independent directors will be reimbursed for their expenses, and will receive directors' fees equal to $1,000 per month and $2,500 per meeting attended with respect to their services as directors of the General Partner. Messrs. Leithead and Marsh received $14,500 each in directors' fees in fiscal 1996. Directors are named by the stockholders of the general partner and serve until their successors are named. The General Partner's officers are appointed by, and serve at the discretion of, the Board of Directors.
Mr. Paul E. Gaston succeeded his father, Don F. Gaston, as Chairman of the Board of the CLP General Partner in September 1993. He became Chairman of the Board of the General Partner of the Partnership in December 1992 and had been a Director since September 1992. Upon its formation in November 1992, he became Managing Director of Walcott Partners Limited Partnership, a Gaston family partnership whose investments include limited partnership interests in the Partnership and shares in Celtics, Inc., the General Partner of the Partnership. From inception in 1990 to June 1992 he was Co-chairman and since June 1992 has been Chairman of the Board of Directors of Celtics Communications, Inc., the general partner of Boston Celtics Communications Limited Partnership. Mr. Paul E. Gaston is the son of Don F. and Paula B. Gaston.
Mr. Dupee became Vice-Chairman of the Board of Directors of Boston Celtics Incorporated in September 1983 and has served as a Director of the BCCLP General Partner since its inception in 1990. Mr. Dupee was Chairman of the Board of London Investment Trust, PLC, a large international futures and options brokering and clearinghouse from 1987 to January 1988. Mr. Dupee was President of Providence Capitol, Ltd. from 1982 until its liquidation in December 1986. Prior thereto, he was associated with Gulf & Western Industries, Inc., most recently as a Vice President and President of its Providence Capitol Division. Since 1986, Mr. Dupee has been a private investor.
Mr. Schram was named President and became a Director of the General Partner of the Partnership in December 1992. He became President and Director of the BCCLP General Partner in August 1992. From 1984 to 1991, Mr. Schram was a Vice President of the Fixed Income Securities Division of Morgan Stanley & Co.
Mr. Bartlett was named Executive Vice President and became a Director of the General Partner of the Partnership in December 1992. He has been a financial consultant, primarily to BCLP and to the Principal BCLP Holders, since January 1986 and has served as a Director of BCCLP General Partner since it inception in 1990. From October 1972 to December 1985, he was associated with Gulf & Western Industries, Inc., a diversified manufacturing, services and entertainment company, most recently as a Vice President. Prior to October 1972, he was a senior audit manager with the international accounting firm of Price Waterhouse. Effective June 30, 1996, Mr. Bartlett retired from his positions as Executive Vice President, Chief Financial Officer, Treasurer and Director.
Mr. Pond was named Vice President, Controller and Secretary of the General Partner of the Partnership in December 1992. He has been employed by BCLP since July 1992. From July 1981 to June 1992, he was with the international accounting firm of Ernst & Young, most recently as a senior audit manager. Effective July 1, 1996, with the retirement of Mr. Bartlett, Mr. Pond assumed his responsibilities as Executive Vice President, Chief Financial Officer, Treasurer and Secretary.
Mr. Don F. Gaston has served as a Director of the General Partner's of BCLP and CLP since his resignation as Chairman of the Board of BCLP in December 1992 and CLP in September 1993. He was succeeded in each of these positions by his son, Paul E. Gaston. He became Chairman of the Board of Directors of Boston Celtics Incorporated in September 1983 when he, together with Messrs. Cohen and Dupee, acquired the Boston Celtics Franchise. He has served as a Director of the BCCLP General Partner since its inception in 1990. Mr. Gaston was Chairman of the Board of Providence Capitol, Ltd. from July 1982 until its liquidation in December 1986. From 1962 to June 1982, he was associated with Gulf & Western Industries, Inc. in various capacities, including Executive Vice President, director and member of the Executive Committee. Mr. Gaston is the husband and father respectively, of Paula B. Gaston and Paul E. Gaston.
Mrs. Paula B. Gaston became a Director of the General Partner of BCLP in September 1992 and a Director of the General Partner of CLP in October 1992. She is a private investor and is the wife of Mr. Don F. Gaston and the mother of Paul E. Gaston.
Mr. Leithead became a Director of the BCLP General Partner in October 1992. Mr. Leithead worked for International Business Machines Corporation as an executive in the National Marketing Division from 1979 to 1985. From 1985 to 1993, he was an executive of R.R. Donnelley & Sons Company. Since September 1993 he has been employed as an executive at Arandell Schmidt.
Mr. Marsh became a director in September 1992. From 1985 to 1988 Mr. Marsh was a Vice President in the international arbitrage department of Merrill Lynch Pierce Fenner and Smith. From 1988 to 1991 he was a Vice President at Duetsche Bank Capital Corporation where he headed an international arbitrage securities trading group. From 1991 to 1995, he was Chief Executive Officer and President of Saicor Ltd., an investment banking firm specializing in emerging markets. Currently, Mr. Marsh is a Director of Trading and Sales with ABSA Securities, Inc., where he is an investment banker specializing in emerging markets.
Mr. Auerbach has been President of the Boston Celtics basketball operations since 1981. From 1950 to 1966, Mr. Auerbach was head coach of the Boston Celtics and, during that period, the Boston Celtics won the NBA championship 11 times. Mr. Auerbach was General Manager of Boston Celtics Incorporated, or its predecessors, from 1966 to 1983. Mr. Auerbach has been inducted into the Basketball Hall of Fame.
Mr. Carr was named Executive Vice President of Basketball Operations of the Basketball subsidiary Partnership on June 16, 1994 and coach of the Boston Celtics in June 1995. Since 1987 he has owned and operated various businesses. In 1992 he was named Executive Director of Community Affairs for the Boston Celtics. Mr. Carr played professional basketball from 1973 to 1985. From 1979 through 1985 he played for the Boston Celtics.
Mr. Volk has been associated with the Boston Celtics basketball operations since 1971 and has been Executive Vice President and General Manager since 1984. He was Assistant General Manager from 1981 to 1984 and General Counsel from 1974 to 1984. From 1971 to 1974, Mr. Volk was Director of Sales.
Mr. Layne has been with the Boston Celtics basketball operations since March 1994. He was named Executive Vice President of Marketing and Sales in May 1995. From March 1994 to May 1995 Mr. Layne was Vice President of Planning and Special Events. Prior to joining the Boston Celtics, Mr. Layne was with the Seattle Mariners professional baseball team as its Vice President of Marketing for four years, and he previously worked in broadcasting with CBS and Emmis Broadcasting for eleven years.
Section 16(a) Beneficial Ownership Reporting Compliance - -------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations promulgated thereunder, require executive officers and directors of CI, the general partner of BCLP, to file reports pertaining to their beneficial ownership of the Units of BCLP with the Securities and Exchange Commission and the New York Stock Exchange when they are first elected, and to report (with certain exceptions) subsequent changes in their beneficial ownership of Units. In February 1994, each of the three (3) minor children of Paul E. Gaston, Chairman of the Board of CI, acquired 1,000 Units each (for an aggregate of 3,000 Units) of BCLP. In addition, in April of 1996, Mr. Gaston, his wife, and each of his three (3) minor children acquired 1,000 Units each (for an aggregate of 5,000 Units) of BCLP. Mr. Gaston filed late two (2) Form 4s reporting the aforementioned acquisitions of the Units of BCLP. In each case, the failure to make any filings required on Form 4 on a timely basis was inadvertent.
Item 11.
Item 11. Executive Compensation - --------------------------------
The following Summary Compensation Table sets forth the compensation of each of the Chief Executive Officer and the four most highly compensated executive officers of the Partnership whose annual salary and bonus, if any, exceeded $100,000 for services in all capacities to the Partnership during the last three fiscal years.
Aggregated Option Exercises and Option Values
Employment and Consulting Agreements
The Partnership
In August 1993, the Board of Directors of the General Partner of BCLP approved compensation arrangements and incentive plans for Paul E. Gaston, Chairman of the Board and Stephen C. Schram, President, respectively, of the Partnership. Mr. Gaston and Mr. Schram shall each be employed on an at will basis, with compensation at the rate of $400,000 per annum. The incentive plan, which is subject to annual review, provides that each of Mr. Gaston and Mr. Schram shall receive annual incentive payments, commencing with the fiscal year ending June 30, 1994, of 5% of the amount by which Consolidated Net Income before taxes on income of BCLP for the related fiscal year exceeds $8,000,000, payable not later than 10 days after the issuance of audited financial statements of BCLP. During the years ended June 30, 1995 and 1994, annual incentive compensation payments in the amounts of $828,000 and $749,000, respectively, were made to Messrs. Gaston and Schram. As previously noted in the asterisk (*) footnote to the Summary Compensation Table supra, for the year ended June 30, 1996, Mr. Gaston did not receive a cash incentive compensation payment, but rather elected to receive an aggregate award of 234,866 Restricted Units of BCLP. Mr. Schram elected to receive his $3,658,363 incentive compensation payment for the year ended June 30, 1996 in cash.
Under an agreement dated July 1, 1996, Thomas M. Bartlett, Jr. agreed to serve as a consultant to BCLP from July 1, 1996 through June 30, 2001. In return for Mr. Bartlett's services, he will receive an annual retainer of $200,000 payable in equal quarterly installments commencing July 1, 1996.
The Basketball Operations
Under an agreement dated as of March 13, 1981, as amended, Red Auerbach has been retained to serve as a consultant to the Boston Celtics for the remainder of his life. For such services, Mr. Auerbach will receive compensation totaling $250,000 per year for his lifetime. In fiscal 1996 and 1995, Mr. Auerbach received bonus payments of $100,000. In the event of Mr. Auerbach's death, his wife shall be entitled to receive for the balance of her life monthly payments equal to those that would have otherwise been paid to Mr. Auerbach. Mr. Auerbach shall advise the Boston Celtics with respect to, among other things, the team's selections in the NBA college draft, evaluation of college and professional players and the performance of the team and the players for as long as he is physically able to perform such services.
Under an agreement dated June 19, 1995, Michael L. (M. L.) Carr agreed to serve as Coach of the Boston Celtics and Executive Vice President of Basketball Operations of the Basketball Subsidiary through June 30, 1999 at an annual salary of $1,000,000.
Under an agreement dated June 1, 1990, as amended September 21, 1994, David R. Gavitt agreed to serve as a consultant to the Basketball Subsidiary through May 31, 1998. In return for Mr. Gavitt's services, he will receive an annual salary at the rate of $300,000 through June 1997, $200,000 through June 1998, $100,000 through June 2000 and $50,000 through June 2001.
Under the terms of an agreement effective as of July 1, 1995, Mr. Volk agreed to serve as General Manager of the Boston Celtics basketball operations through June 30, 1998 at a salary of $375,000 in fiscal 1996, rising to $425,000 in fiscal 1998.
Under the terms of an agreement dated August 30, 1995, Alan Cohen agreed to serve as a consultant for the Basketball Subsidiary through August 30, 1998 at an annual retainer fee of $260,000.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management - -----------------------------------------------------------------------
The following table sets forth certain information regarding the Partnership's Units beneficially owned on September 20, 1995 by (i) each person who is known by the Partnership to beneficially own more than five percent (5%) of the outstanding Units, by (ii) each director of the General Partner, by (iii) each executive named in the Summary Compensation Table and by (iv) all directors and officers of the General Partner as a group. All information with respect to beneficial ownership has been furnished by the respective Unitholders to the Partnership.
Unless otherwise indicated, all parties have both exclusive voting and investing power.
Item 13.
Item 13. Certain Relationships and Related Transactions - -------------------------------------------------------
In 1996, the Partnership reimbursed a subsidiary of Walcott Partners Limited Partnership ("Walcott") $240,896 for the business use since 1994 of an aircraft based on standard charter rates for comparable aircraft. Walcott is a Gaston family partnership. Paul E. Gaston is the Managing Director of Walcott. The reimbursement was reviewed and approved by the Audit Committee of the Board of Directors of CI, which is the general partner of BCLP. Paul E. Gaston, who is a member of the Audit Committee, was recused from and did not participate in any of the Audit Committee's deliberations pertaining to this matter.
PART IV
Item 14.
Item 14. Exhibits, and Reports on Form 8-K - ------------------------------------------
(a) The following documents are filed as part of this report:
1. Financial Statements:
The financial statements listed in the accompanying List of Financial Statements and Financial Statement Schedules are filed as part of this report.
2. Exhibits:
The Exhibits listed below are filed as part of this report.
ANNUAL REPORT ON FORM 10-K
ITEM 8, ITEM 14(a)(1) and (2)(c) and (d)
LIST OF FINANCIAL STATEMENTS
FINANCIAL STATEMENTS CERTAIN EXHIBITS YEAR ENDED JUNE 30, 1996
BOSTON CELTICS LIMITED PARTNERSHIP
BOSTON, MASSACHUSETTS
FORM 10-K -- ITEM 14(a)(1) and (2)
BOSTON CELTICS LIMITED PARTNERSHIP
LIST OF CONSOLIDATED FINANCIAL STATEMENTS
The following consolidated financial statements of Boston Celtics Limited Partnership and subsidiaries are included in Item 8:
Consolidated Balance Sheets at June 30, 1996 and 1995.
Consolidated Statements of Income for each of the three years in the period ended June 30, 1996.
Consolidated Statements of Partners' Capital (Deficit) for each of the three years in the period ended June 30, 1996.
Consolidated Statements of Cash Flows for each of the three years in the period ended June 30, 1996.
Notes to Consolidated Financial Statements.
All schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission have been omitted because the required information has been disclosed in the footnotes to the Consolidated Financial Statements, or are not required under the related instructions or are inapplicable.
Report of Independent Auditors
To the General Partner Boston Celtics Limited Partnership
We have audited the accompanying consolidated balance sheets of Boston Celtics Limited Partnership and subsidiaries as of June 30, 1996 and 1995, and the related consolidated statements of income, partners' capital (deficit) and cash flows for each of the three years in the period ended June 30, 1996. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Boston Celtics Limited Partnership and subsidiaries at June 30, 1996 and 1995, and the consolidated results of their operations and their cash flows for each of the three years in the period ended June 30, 1996, in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP ---------------------------------------
Boston, Massachusetts September 20, 1996
BOSTON CELTICS LIMITED PARTNERSHIP and Subsidiaries Consolidated Balance Sheets
See notes to consolidated financial statements.
BOSTON CELTICS LIMITED PARTNERSHIP and Subsidiaries Consolidated Statements of Income
See notes to consolidated financial statements.
BOSTON CELTICS LIMITED PARTNERSHIP and Subsidiaries Consolidated Statements of Partners' Capital (Deficit)
See notes to consolidated financial statements.
BOSTON CELTICS LIMITED PARTNERSHIP and Subsidiaries Consolidated Statements of Cash Flows
BOSTON CELTICS LIMITED PARTNERSHIP and Subsidiaries Consolidated Statements of Cash Flows (Continued)
See notes to consolidated financial statements.
Note A - Basis of Presentation
Boston Celtics Limited Partnership (the "Boston Celtics", "BCLP" or the "Partnership") a Delaware limited partnership, through Celtics Limited Partnership ("CLP"), its 99% owned limited partnership, owns and operates the Boston Celtics professional basketball team of the National Basketball Association, and through BCCLP Holding Corporation ("Holdings"), a wholly owned subsidiary of BCLP, owns Celtics Capital Corporation ("CCC") (which holds investments) and through Celtics Investments Incorporated ("CII"), a wholly-owned subsidiary of BCLP, and itself owns a 99% limited partnership interest in Boston Celtics Communications Limited Partnership ("BCCLP") which owned a 99% limited partnership interest in Boston Celtics Broadcasting Limited Partnership ("BCBLP") until its sale on July 7, 1995 (BCBLP owned and operated Television Station WFXT - Channel 25 ("WFXT") of Boston, Massachusetts) and owned and operated Radio Station WEEI - 590 AM of Boston, Massachusetts until its sale on June 30, 1994. The General Partner of BCLP is Celtics, Inc. ("CI"); the General Partner of CLP is Boston Celtics Corporation ("BCC"); and the General Partner of BCCLP is Celtics Communications, Inc. ("CCI"). The General Partners of BCLP, CLP and BCCLP are Delaware corporations whose sole stockholders are Paul Gaston, Paul Dupee, Don Gaston (father of Paul Gaston) and an affiliate. The consolidated financial statements include the accounts of the Partnership, CLP, Holdings, CCC, CII and their subsidiary partnerships. All intercompany transactions are eliminated in consolidation.
The agreement, which was initially disclosed in the Partnership's 1994 financial statements, between BCLP and Fox Television, Inc. ("FTS") pursuant to which FTS acquired BCBLP was closed on July 7, 1995, when FTS exercised its option (acquired in fiscal 1994 for $15,000,000) for the acquisition of a 26% interest in BCBLP, converted $10,000,000 of convertible debt for an additional 25% interest in BCBLP and purchased the remaining 49% interest in BCBLP for cash of $80,000,000. Accordingly the consolidated financial statements for 1995 and 1994 have been restated to present the results of operations of Television Station WFXT and Radio Station WEEI (sold June 30, 1994) as discontinued operations. For financial reporting purposes, the excess of the proceeds from the issuance of the option to FTS over the carrying value of the related 26% interest in BCLP and the gain on the sale of Radio Station WEEI are reported as Gain From Disposal of Discontinued Operations ($14,284,064 net of related income taxes of $3,150,000) in 1994. The gain from the conversion of the convertible note and sale of the remaining interest for cash ($38,330,907 net of related income taxes of $17,770,000) is included in income in 1996. Net assets of discontinued operations consisted of the following at June 30, 1995:
Pursuant to terms of the agreement, as amended, $15,288,714 of available cash (as defined) ($7,338,583 to BCCLP, $152,887 to CCI and $7,797,244 to FTS), was distributed prior to the closing and the $10,000,000 convertible note was converted to a 25% interest in BCBLP at the closing.
Revenues of discontinued operations were $534,000, $51,897,000, and $38,295,000 for the years ended June 30, 1996, 1995 and 1994, respectively.
Note B - Significant Accounting Policies
Cash Equivalents: Cash equivalents represent short-term investments with maturities at date of purchase of three months or less. Marketable securities represent investments with maturities greater than three months.
Estimates and Assumptions: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.
Concentration of Credit Risk: Financial instruments which potentially subject the Partnership to credit risk consist principally of cash equivalents, short-term investments, marketable securities and accounts receivable. The Partnership places its cash equivalents, short-term investments and marketable securities with highly rated financial institutions and United States government entities with relatively short maturities. The risk with respect to accounts receivable is limited due to the large number of customers comprising the Partnership's customer base their dispersion across many different industries and geographic areas and to the short payment terms. The Partnership performs periodic credit evaluations of its customers' financial condition and generally does not require collateral. Credit losses have been consistently within management's expectations.
Marketable Securities and Other Short Term Investments: Effective July 1, 1994, the Partnership adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" (FAS 115) which established the accounting and reporting requirements for investments in equity securities that have readily determinable fair values and for all investments in debt securities. All affected investment securities must be classified as securities to be held to maturity, for trading, or available-for-sale.
Financial Instruments: Effective July 1, 1994, the Partnership adopted Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments". This Statement extends existing fair value disclosure practices for some instruments by requiring all entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized in the balance sheet, for which it is practicable to estimate fair value. The carrying values reported in the Consolidated Balance Sheet for financial instruments approximate their fair values.
Franchise and Other Intangible Assets: These assets, consisting principally of the National Basketball Association franchise and other intangible assets are being amortized primarily on a straight-line basis over 40 years.
Property and Equipment: Property and equipment is stated at cost and is being depreciated over estimated useful lives of from five to fifteen years using straight line or accelerated methods of depreciation as appropriate. Building and leasehold improvements are depreciated over the lesser of the remaining lives of the leases or the assets.
Accounting for the Impairment of Long-Lived Assets: Effective July 1, 1995, the Partnership adopted Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets to be Disposed Of" (FAS 121). The Statement requires impairment losses to be recognized for long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows are not sufficient to recover the assets' carrying amount. The adoption of FAS 121 had no material impact on the Partnership's financial position.
Basketball Operations: Revenues, principally ticket sales and television and radio broadcasting fees generally are recorded as revenues at the time the game to which such proceeds relate is played. Team expenses, principally player and coaches salaries, related fringe benefits and insurance, and game and playoff expenses, principally National Basketball Association attendance assessments, arena rentals and travel, are recorded as expense on the same basis. Accordingly, advance ticket sales and payments on television and radio broadcasting contracts and payments for team and game expenses not earned or incurred are recorded as deferred revenues and deferred expenses, respectively, and amortized ratably as regular season games are played. General and administrative and selling and promotional expenses are charged to operations as incurred.
Stock Options: In October 1995, the Fiancial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (FAS 123). FAS 123 becomes effective for the Partnership for its fiscal year ended June 30, 1997. The Partnership has not decided whether it will apply the measurement principles contained in FAS 123 or continue to use the measurement principles contained in the currently effective Accounting Principles Board Opinion 25.
Income Taxes: No provision for income taxes is required by BCLP or, prior to their merger into Holdings in May 1993, for BCCLP or BCBLP. Their income and expenses have been or prior to the merger were taxable to or deductible to their partners. CCC, Holdings, and CII, wholly-owned subsidiary corporations of BCLP, are subject to income taxes and report their income tax provision, including income (losses) of subsidiary partnerships BCCLP and BCBLP, using the liability method in accordance with Financial Accounting Standards Board (the "Board") Statement 109, Accounting for Income Taxes (see Note M). Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using tax rates and laws that will be in effect when the differences are expected to reverse. Although BCLP is considering strategies for exemption, under provisions of adopted legislation it may become taxable for income tax purposes as if it were a corporation effective July 1, 1998.
Net Income Per Unit: Net income per Unit is based upon the weighted average number of units outstanding each year plus any unit equivalents attributable to options, if material.
Note C - Marketable Securities and Other Short Term Investments
The following is a summary of marketable securities which are classified as available for sale securities:
The gross realized gains on available-for-sale securities totaled $131,697 in 1996 and $76,140 in 1995 and $78,770 in 1996 and $63,328 in 1995, for U. S. corporate securities and U. S. government securities respectively, and the gross realized losses totaled $310,150 in 1996 and $29,214 in 1995 for U. S. government securities and $1,455 in 1996 for U. S. corporate securities. The net adjustment to unrealized holding gains and losses on available-for-sale securities included as a separate component of Partners' Capital (Deficit) resulted in a loss of $424,523 in 1996 and a gain of $511,354 in 1995.
The amortized cost and estimated fair value of available-for-sale securities at June 30, 1996, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.
Other short term investments, which consist primarily of private placement notes with a commercial bank with a maturity of under one year, are classified as held-to-maturity and are carried at amortized cost, which approximates market value. There were no unrealized gains or losses at June 30, 1996.
Note D - Property and Equipment
Property and equipment are summarized as follows:
Note E - Deferred Compensation and Other Compensation Arrangements
Certain player contracts provide for guaranteed compensation payments which are deferred until a future date. Operations are charged amounts equal to the present value of future guaranteed payments in the period in which the compensation is earned. The present value of payments due under these agreements is as follows:
Years ending June 30, 1997 $ 4,345,000 1998 1,719,000 1999 1,453,000 2000 1,228,000 2001 1,132,000 2002 and thereafter 6,218,000 ----------- $16,095,000 ===========
On June 28, 1996, the annual incentive payment arrangements between BCLP and Paul E. Gaston, Chairman of the Board of CI (which is the general partner of BCLP), were modified to permit him to elect to acquire Units of BCLP which contain certain significant restrictions as to vesting and transferability (hereinafter the "Restricted Units") in lieu of a cash payment. Mr. Gaston elected to receive Restricted Units in lieu of the $3,658,363 cash incentive compensation payment to which he was entitled. Mr. Gaston did not receive a cash bonus for the year ended June 30, 1996. Based on a written report received from an independent employee benefits consultant regading the appropriate discount to be applied, the Audit Committee of the Board of Directors of CI awarded 234,866 Restricted Units to Mr. Gaston. Mr. Gaston, who is a member of the Audit Committee, was recused from and did not participate in any of the Audit Committee's deliberations pertaining to this matter. The fair market value of the Restricted Units awarded to Mr. Gaston will not be deductible for tax purposes currently, however, they will be deductible in the taxable year in which the restrictions pertaining to those Restricted Units expire.
Note F - Notes Payable
Notes payable are comprised of:
The CLP balance represents the outstanding borrowings under a $50,000,000 loan with its commercial bank. The loan agreement as amended permits borrowings of up to $50,000,000 through December 31, 1997, with the available amount declining thereafter by $1,250,000 per quarter. The term of the loan extends through December 31, 2002. Interest is payable quarterly in arrears at a fixed annual rate of 6.35% from October 4, 1995 through December 31, 2002. Prior to October 4, 1995, the initial $30,000,000 borrowing bore interest at a fixed rate of 6.4% and borrowings in excess of the initial $30,000,000 bore interest at optional floating rates (7.375% and 4.875% at June 30, 1995 and 1994). Effective January 1, 1998, the agreement related to the loan requires quarterly payments of principal in the amount necessary to reduce the outstanding principal balance to equal the declining available borrowings, if necessary, together with interest. The borrowings under the bank loan are secured by all of the assets of and are the liability of CLP, the basketball subsidiary partnership.
The BCCLP balance represented the outstanding borrowings under an $85,000,000 financing agreement dated October 31, 1994 with the Partnership's commercial bank. The loan bore interest at a floating rate plus one percent (6.25% at June 30, 1995 and a weighted average interest rate of 6.85% from September 15, 1994 to June 30, 1995 ). The balance of the loan was repaid on July 7, 1995 concurrent with the sale of the remaining partnership interests in BCBLP to FTS.
The principal of the Convertible Subordinated Note Payable (the "Fox Note") was due in a single payment at May 11, 2000. The Fox Note bore interest at the rate of 10% per year payable semi-annually in arrears. The Convertible Subordinated Note Payable was converted into a 25% interest in BCBLP on July 7, 1995 (see Note A).
The agreement relating to the commercial bank borrowing includes various provisions and covenants customary in lending arrangements of this type including limitations on distributions to unitholders. Aggregate maturities of notes payable at June 30, 1996 are as follows:
Years ending June 30, 1997 $ 0 1998 2,500,000 1999 5,000,000 2000 5,000,000 2001 5,000,000 2002 and thereafter 32,500,000
Interest charged to operations in connection with borrowings (including a BCBLP term loan with interest at optional floating rates (6.375% at June 30, 1994) from a commercial bank which was repaid during fiscal year 1995 and a $15,000,000 short-term loan with interest at 4% from the commercial bank borrowed and repaid during fiscal year 1994) were $3,366,000, $8,478,000, and $4,387,000 ($3,366,000, $7,890,000 and $2,872,000 from continuing operations) in the years ended June 30, 1996, 1995 and 1994, respectively.
Note G - Related Party Transactions
Management fee obligations of $1,565,000, $2,334,000 and $2,874,000 ($1,555,000, $1,336,000 and $2,140,000 from continuing operations) applicable to Boston Celtics Corporation, general partner of CLP, and Celtics Communications, Inc., general partner of BCCLP and BCBLP were charged to operations during the years ended June 30, 1996, 1995 and 1994, respectively. Boston Celtics Corporation receives a management fee of $750,000 per annum subject to annual increases based on annual cash flows from basketball operations after June 30, 1989. Celtics Communications, Inc. received management fees from BCCLP and BCBLP (prior to its sale on July 7, 1995) based on a percentage of sales. The rates of these fees were 1% through December 31, 1992 and 2% thereafter.
Note H - Commitments and Contingencies
The Partnership has employment agreements with officers, coaches and players of the basketball team (CLP). Certain of the contracts provide for guaranteed payments which must be paid even if the employee is injured or terminated. The basketball team players are covered by the terms of a collective bargaining agreement which expires on June 30, 2001. Amounts required to be paid under such contracts in effect as of September 20, 1996, including option years and $5,227,000 included in accrued expenses at June 30, 1996, but excluding amounts previously earned (see Note E - Deferred Compensation), are as follows:
Years ending June 30, 1997 $ 28,757,000 1998 23,977,000 1999 22,985,000 2000 20,618,000 2001 7,190,000
BCLP maintains disability and life insurance policies on most of its key players. The level of insurance coverage maintained is based on BCLP's determination of the insurance proceeds which would be required to meet its guaranteed obligations in the event of permanent or total disability of its key players.
Lease commitments - The Partnership and its subsidiaries are committed under noncancelable, long-term leases, substantially all of which are related to CLP, for certain of its facilities and equipment. Rent expense charged to operations during the years ended June 30, 1996, 1995 and 1994 were $282,000, $2,272,000, and $2,746,000 ($282,000, $1,667,000 and $1,507,000 from continuing operations), respectively. Minimum annual payments, including renewable option periods, required by these leases are:
Years ending June 30, 1997 $ 315,000 1998 290,000 1999 304,000 2000 319,000 2001 334,000 2002 and thereafter 1,711,000
Note I - Options to Acquire Units of Partnership Interest
On December 31, 1993 the Partnership granted options to three employees to acquire 530,000 Limited Partnership Units of BCLP (Units) at the price of $16.25 per Unit less all cash distributions per Unit made by the Partnership from July 31, 1993 to the date of exercise. Options for 500,000 of such Units become exercisable in installments as follows:
Options for the remaining 30,000 Units became exercisable June 30, 1994. All of the options expire 10 years from the date of grant. In addition to exercising the right to purchase units pursuant to the options, a holder may exercise a Unit Appreciation Right, entitling the holder to receive an amount equal to the excess of the fair market value of a Unit, determined on the date of exercise over the exercise price of the related option on the date the Unit Appreciation Right was granted in which event options for an equivalent number of units will be canceled. In the sole discretion of the General Partner of BCLP payments of amounts payable pursuant to Unit Appreciation Rights may be made solely in Units, solely in cash, or in a combination of cash and Units. The compensation element of the options, $1,851,000, $3,174,000 and $850,000 in the years ended June 30, 1996, 1995 and 1994, respectively, is being charged to earnings ratably over the period from the date of grant until the date of exercise based on the difference between the exercise and market price of the optioned Units at the end of each quarter. The market price of Limited Units of BCLP on June 30, 1996 was $22.25.
Note J - Benefit Plans
Each of the Partnership's subsidiaries have defined contribution plans covering substantially all employees who meet certain eligibility requirements. Participants may make contributions to the plans up to 15% of their compensation (as defined). Contributions to these plans are 100% on the first 7% of compensation contributed by each participant. Contributions are fully vested after three years of service. Costs of the plans charged to operations amounted to $206,000, $375,000, and $220,000 ($206,000, $129,000 and $69,000 from continuing operations) during the years ended June 30, 1996, 1995 and 1994, respectively.
A subsidiary partnership, included in discontinued operations, participated in a multiemployer retirement plan covering certain union employees of the radio station. This subsidiary charged $79,000 to operations during the year ended June 30, 1994 for its share of plan costs.
Note K - Cash Flows
Reconciliations of net income to net cash flows from operating activities are as follows:
The change in accounts receivable is after write-offs, net of recoveries, of $397,544 and $6,376 in 1995 and 1994, respectively.
Note L - Quarterly Results (Unaudited)
A summary of operating results, net income per unit based on the average units outstanding throughout each year calculated for financial statement purposes only, and cash distributions for the quarterly periods in the two years ended June 30, 1996 is set forth below (000's omitted):
Note M - Income Taxes
For financial reporting purposes a valuation allowance of $7.9 million was established in 1994 to reduce the deferred tax assets (principally related to intangibles) acquired in the merger to the amount considered realizable on a more likely than not basis. The allowance was eliminated in 1995 as a result of the closing of the agreement between BCLP and Fox Television, Inc. (see Note A - Basis of Presentation). Taxes related to the agreement have been provided as a component of income from discontinued operations. Components of deferred tax liabilities and assets, all of which relate to Holdings or its subsidiary partnerships BCCLP and BCBLP are at June 30:
At June 30, 1996 deferred taxes of $20,100,000 represent the tax effected the difference between the tax and financial statement basis of net assets of Holdings and CII.
At June 30, 1996 the tax basis of the net assets of BCLP and CLP exceeded their financial bases by approximately $48,860,000, consisting primarily of Deferred Compensation of $17,200,000, other compensation of $3,660,000 and the National Basketball Franchise of $28,000,000. A substantial part of the Deferred Compensation will be paid prior to July 1, 1998, when BCLP may become subject to federal income taxes. No deferred tax assets or liabilities have been provided for these differences because BCLP and CLP are not subject to income taxes.
The provision for income taxes included in the consolidated statement of income is comprised of state taxes currently payable of $800,000 and deferred of $3,800,000 and federal taxes currently payable of $2,550,000 and deferred of $12,500,000 for the year ended June 30, 1996, state taxes currently payable of $1,750,000 and federal taxes currently payable of $5,000,000 for the year ended June 30, 1995 and state taxes currently payable of $100,000 and deferred taxes, principally federal of $2,900,000 for the year ended June 30, 1994.
A reconciliation of the statutory federal income tax rate applied to reported pre-tax earnings of CII, CCC, Holdings, BCCLP and BCBLP ($60,252,000 in 1996 $23,400,000 in 1995 and $17,982,000 in 1994) before deduction of taxable minority interest ($6,800,000 in 1995 and $1,700,000 in 1994) to the effective tax rate of the provision is:
Note N - Accounts Payable and Accrued Expenses
The balances include accrued compensation of $12,265,000 and $8,331,000 at June 30, 1996 and 1995 and accrued management fees of $805,000 and $586,000 due to the general partners of the Partnership and its subsidiaries at June 30, 1996 and 1995.
Note O - Redemption of Partnership Interest
On August 30, 1995 the Partnership redeemed an aggregate of 758,444 units representing assignments of beneficial ownership of limited partnership interest in BCLP. The redeemed units were beneficially owned by a principal unitholder and his family. The principal unitholder received two notes from BCLP in exchange for 668,144 units acquired by BCLP from him. The two notes have an aggregate initial face amount of $14,365,096 equal to $21.50 per unit for each unit acquired from him. The two notes which are due and payable on July 1, 2000 (unless prepaid earlier pursuant to mandatory prepayment provisions contained therein) also provide that the amounts to be paid to such unitholder pursuant to the terms of the notes will be increased by specified amounts on each July 1 during their term. If he holds the two notes until July 1, 2000 he would be entitled to receive aggregate payments (excluding interest) in the amount of $20,044,320 equal to $30.00 per unit for each unit acquired from him. Each of the notes bear interest payable quarterly at the rate of 7.76% per annum. Interest of $2,008,909 was charged to operations in 1996 related to the notes. Under the terms of the redemption the principal unitholder's family members were paid $1,941,450 equal to $21.50 in cash for each of the 90,300 units acquired from them.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
BOSTON CELTICS LIMITED PARTNERSHIP
By: Celtics, Inc., General Partner
Date: September 27, 1996 By: /s/ Stephen C. Schram -------------------------- Stephen C. Schram Director and President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.