<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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 0-9224
Winthrop Partners 79 Limited Partnership
(Exact name of small business issuer as specified in its charter)
Massachusetts 04-2654152
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One International Place, Boston, Massachusetts 02110
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (617) 330-8600
Indicate by check mark whether 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 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_____
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP FORM 10-QSB JUNE 30, 1996
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
June 30, December 31,
1996 1995
-------- ------------
Assets
Real Estate Leased to Others:
Accounted for under the operating method,
at cost, net of accumulated depreciation
and allowance for impairment of value
$3,776 (1996) and $3,208 (1995) $ 4,810 $ 5,378
Accounted for under the financing method 2,957 3,090
-------- ----------
7,767 8,468
Other Assets:
Cash and cash equivalents 333 244
Other, net of accumulated amortization of
$63 (1996) and $57 (1995) 163 143
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Total Assets $ 8,263 $ 8,855
======= ==========
Liabilities and Partners' Capital
Liabilities:
Mortgage notes payable $ 2,729 $ 2,871
Accounts payable and accrued expenses 49 30
Distributions payable to partners 213 142
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Total Liabilities 2,991 3,043
======= ==========
Partners Capital:
Limited Partners -
Units of Limited Partnership Interest,
$1,000 stated value per Unit; authorized
issued and outstanding - 10,005 Units 5,560 6,057
General Partners (Deficit) (288) (245)
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Total Partners' Capital 5,272 5,812
------- ----------
Total Liabilities and Partners' Capital $ 8,263 $ 8,855
======= ==========
See notes to financial statements.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP FORM 10-QSB JUNE 30, 1996
<TABLE>
<CAPTION>
Statements of Income (Unaudited)
(In Thousands, Except Unit Data)
For the Three For the Six
Months Ended Months Ended
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Income
Rental income from real estate leases accounted
for under the operating method $ 221 $ 277 $ 578 $ 554
Interest on short-term investments 5 6 7 8
Interest income on real estate leases accounted
for under the financing method 94 101 190 203
------- ----- ----- -----
Total income 320 384 775 765
------- ----- ----- -----
Expenses:
Interest 74 87 149 163
Provision for impairment of value 500 -- 500 --
Depreciation and amortization 36 38 73 75
Management fees 6 6 13 13
General and administrative 34 23 55 43
------- ----- ----- -----
Total expenses 650 154 790 294
------- ----- ----- -----
Net (Loss) income $ (330) $ 230 $ (15) $ 471
======= ===== ===== =====
Net (loss) income per Unit of Limited
Partnership Interest $(30.38) $21.18 $(1.40) $43.34
======= ====== ====== ======
Distributions per Unit of Limited Partnership Interest $ 19.69 $23.25 $48.28 $47.78
======= ====== ====== ======
</TABLE>
See notes to financial statements.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP FORM 10-QSB JUNE 30, 1996
Statement of Partners' Capital (Unaudited)
(In Thousands, Except Unit Data)
Units of
Limited General Limited
Partnership Partners' Partners' Total
Interest Deficit Capital Capital
----------- --------- --------- -------
Balance - January 1, 1996 10,005 $(245) $6,057 $5,812
Distributions (42) (483) (525)
Net loss (1) (14) (15)
------ ----- ------ ------
Balance - June 30, 1996 10,005 $(288) $5,560 $5,272
====== ===== ====== ======
See notes to financial statements.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP FORM 10-QSB JUNE 30, 1996
Statements of Cash Flows (Unaudited)
(In Thousands)
For the Six Months Ended
June 30, 1996 June 30, 1995
------------- -------------
Cash Flows from Operating Activities:
Net (loss) income $ (15) $ 471
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 73 75
Provision for impairment of value 500 --
Minimum lease payments received, net of
interest income earned, on leases
accounted for under the financing method 133 111
Changes in assets and liabilities:
(Increase) decrease in other assets (26) 1
Increase in accounts payable and accrued
expenses 19 42
----- -----
Net cash provided by operating activities 684 700
----- -----
Cash Flows From Financing Activities:
Principal payments on mortgage notes (142) (122)
Cash distributions (453) (519)
----- -----
Cash used in financing activities (595) (641)
----- -----
Net increase in cash and cash equivalents 89 59
Cash and cash equivalents, beginning of
period 244 193
----- -----
Cash and cash equivalents, end of period $ 333 $ 252
===== =====
Supplemental Disclosure of Cash Flow
Information -
Cash paid for interest $ 149 $ 163
===== =====
See notes to financial statements.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP - FORM 10 - QSB
JUNE 30, 1996
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. General
The accompanying financial statements, footnotes and discussions should be
read in conjunction with the financial statements, related footnotes and
discussions contained in the Partnership's report on Form 10-K for the year
ended December 31, 1995.
The financial information contained herein is unaudited. In the opinion of
management, all adjustments necessary for a fair presentation of such
financial information have been included. All adjustments are of a normal
recurring nature. Certain amounts have been reclassified to conform to the
June 30, 1996 presentation. The balance sheet at December 31, 1995 was
derived from audited financial statements at such date.
The results of operations for the three and six months ended June 30, 1996
and 1995 are not necessarily indicative of the results to be expected for the
full year.
2. Related Party Transactions
Management fees paid by the Partnership to an affiliate of the Managing
General Partner, totaled $13,000 during the six months ended June 30, 1996
and 1995.
3. Accounting Change
On January 1, 1996, the Partnership adopted Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of ", which 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 asset's carrying amount. The impairment loss is
measured by comparing the fair value of the asset to its carrying amount.
In June 1996, the Partnership determined that based upon current economic
conditions and projected operational cash flow the decline in value of the
Partnership's property located in Hurst, Texas was other than temporary and
that recovery of its carrying value was not likely. Accordingly, a provision
for impairment of value of $500,000 was recognized by the Partnership to
reduce the property's carrying value to an amount equal to its estimated fair
value.
4. Subsequent Event - Sale of Property
The Partnership sold its Greenville, South Carolina property to an affiliate
of the tenant at the property on August 1, 1996 for $1,518,000. Net proceeds
of approximately $1,000,000 will be distributed to the partners and a gain on
disposition of approximately $1,000,000 will be recorded during the third
quarter of 1996.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP - FORM 10-QSB
JUNE 30, 1996
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Item 2. Management's Discussion and Analysis or Plan of Operation.
This Item should be read in conjunction with the financial statements and other
items contained elsewhere in the report.
Liquidity and Capital Resources
All of the Partnership's properties are leased to one or more tenants pursuant
to net or modified net leases with remaining lease terms, subject to extensions,
ranging between one and one half and eleven and one half years. The Partnership
receives rental income and interest income from its properties which is its
primary source of liquidity. Pursuant to the terms of the leases, the tenants
are responsible for substantially all of the operating expenses with respect to
the properties including, maintenance, capital improvements, insurance and
taxes.
The level of liquidity based on cash and cash equivalents experienced an $89,000
increase at June 30, 1996, as compared to December 31, 1995. The Partnership's
$684,000 of cash provided by operating activities was only partially offset by
$142,000 of cash used for mortgage payments and $453,000 of partner
distributions (financing activities). The Partnership invests its working
capital reserves in a money market mutual fund.
The Partnership requires cash primarily to pay principal and interest on its
mortgage indebtedness, management fees and general and administrative expenses.
The Partnership's rental and interest income was sufficient for the six months
ended June 30, 1996, and is expected to be sufficient in future periods, to pay
the Partnership's operating expenses. Upon expiration of tenant leases the
Partnership will be required to either sell the properties or procure new
tenants. The Partnership maintains cash reserves required for potential capital
improvements in order to re-lease the properties.
The Partnership has continued to make quarterly distributions to its partners
from operating revenue since inception. Based on the projected revenue and
expenses of the Partnership, it is expected that quarterly distributions will
continue to be made through the third quarter of 1996. The Managing General
Partner is evaluating the propriety of future cash distributions at their
current level, or at all, in light of the J.C. Penney lease expiration on
February 1, 1998. In addition, on February 1, 1998, the mortgage note secured by
the J.C. Penney property matures with a balloon payment due of approximately
$425,000. Additional balloon payments are required on Partnership properties
between 1999 and 2010. If, at that time, the Partnership is unable to extend or
refinance the mortgage notes or sell the properties, the properties could be
lost through foreclosure.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP - FORM 10-QSB
JUNE 30, 1996
Item 2. Management's Discussion and Analysis or Plan of Operation.
(Continued)
Liquidity and Capital Resources (Continued)
The Partnership sold its Greenville, South Carolina property to an affiliate of
the tenant at the property on August 1, 1996 for $1,518,000. Net proceeds of
approximately $1,000,000 will be distributed to the partners and a gain on
disposition of approximately $1,000,000 will be recorded during the third
quarter of 1996.
Results of Operations
Net income decreased by $486,000 for the six months ended June 30, 1996 as
compared to 1995, due to a $500,000 provision for impairment of value recorded
in the three months ended June 30, 1996 on the Partnership's property located in
Hurst, Texas. Rental income decreased by $56,000 for the three months ended June
30, 1996, as compared to the prior comparable period, due to the timing of
contingent rental payments. General and administrative expenses increased for
the six months ended June 30, 1996, as compared to 1995, due to an increase in
professional fees and related costs. Other expenses remained relatively
constant.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP - FORM 10-QSB
JUNE 30, 1996
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27. Financial Data Schedule
99. Supplementary Information Required Pursuant to Section 9.4 of
the Partnership Agreement.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended
June 30, 1996.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP - FORM 10-QSB
JUNE 30, 1996
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BY: ONE WINTHROP PROPERTIES, INC.
Managing General Partner
BY: /s/ Michael L. Ashner
Michael L. Ashner
Chief Executive Officer and Director
BY: /s/ Edward V. Williams
Edward V. Williams
Chief Financial Officer
Dated: August 13, 1996
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
JUNE 30, 1996
Exhibit Index
Exhibit Page No.
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27. Financial Data Schedule --
99. Supplementary Information Required Pursuant to
Section 9.4 of the Partnership Agreement. 12
11 of 12
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Exhibit 99
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
JUNE 30, 1996
Supplementary Information Required Pursuant to Section 9.4
of the Partnership Agreement
1. Statement of Cash Available for Distribution for the three months ended
June 30, 1996:
Net (Loss) $(330,000)
Add: Depreciation and amortization charges to income not 36,000
affecting cash available for distribution
Provision for impairment of value 500,000
Minimum lease payments received, net of interest
income earned, on leases accounted for under the
financing method 68,000
Other 17,000
Less: Mortgage principal payments (77,000)
---------
Cash Available for Distribution $ 214,000
=========
Distributions allocated to General Partners $ 17,000
=========
Distributions allocated to Limited Partners $ 197,000
=========
2. Fees and other compensation paid or accrued by the Partnership to the
General Partners, or their affiliates, during the three months ended
June 30, 1996:
Entity Receiving Form of
Compensation Compensation Amount
---------------- -------------------------- ------
Winthrop
Management Property Management Fees $ 6,000
General Partners Interest in Cash Available
for Distribution $17,000
WFC Realty Co., Inc.
(Initial Limited Partner) Interest in Cash Available
for Distribution $ 98
12 of 12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Winthrop
Partners 79 Limited Partnership and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 333,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 11,543,000
<DEPRECIATION> (3,276,000)
<TOTAL-ASSETS> (8,763,000)
<CURRENT-LIABILITIES> 0
<BONDS> 2,729,000
<COMMON> 0
0
0
<OTHER-SE> 5,772,000
<TOTAL-LIABILITY-AND-EQUITY> 8,763,000
<SALES> 0
<TOTAL-REVENUES> 768,000
<CGS> 0
<TOTAL-COSTS> 86,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 149,000
<INCOME-PRETAX> 485,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 485,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 485,000
<EPS-PRIMARY> 44.58
<EPS-DILUTED> 44.58
</TABLE>
