<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, 1997
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, MA 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, 1997
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets (Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
(In Thousands, Except Unit Data) 1997 1996
----------- -----------
<S> <C> <C>
Assets
Real Estate Leased to Others:
Accounted for under the operating method,
at cost, net of accumulated depreciation of
$2,321 (1997) and $2,277 (1996) $ 4,209 $ 4,253
Accounted for under the financing method 2,667 2,816
----------- -----------
6,876 7,069
Other Assets:
Cash and cash equivalents 623 491
Other, net of accumulated amortization of
$75 (1997) and $69 (1996) 95 193
----------- -----------
Total Assets $ 7,594 $ 7,753
=========== ===========
Liabilities and Partners' Capital
Liabilities:
Mortgage notes payable $ 2,005 $ 2,142
Accounts payable and accrued expenses 32 104
Distributions payable to partners 134 205
----------- ----------
Total Liabilities 2,171 2,451
----------- ----------
Partners' Capital:
Limited Partners -
Units of Limited Partnership Interest,
$1,000 stated value per Unit; authorized
issued and outstanding - 10,005 Units 5,591 5,505
General Partners (Deficit) (168) (203)
----------- ----------
Total Partners' Capital 5,423 5,302
----------- ----------
Total Liabilities and Partners' Capital $ 7,594 $ 7,753
=========== ==========
</TABLE>
See notes to financial statements.
2 of 12
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
Statements of Income (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
For The Three Months Ended For The Six Months Ended
---------------------------- ----------------------------
June 30, 1997 June 30,1996 June 30, 1997 June 30,1996
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Income:
Rental income from real estate leases
accounted for under the operating method $ 244 $ 221 $ 486 $ 578
Interest on short-term investments 8 5 14 7
Interest income on real estate leases
accounted for under the financing method 87 94 175 190
------------- ------------ ------------- ------------
Total income 339 320 675 775
------------- ------------ ------------- ------------
Expenses:
Interest 56 74 113 149
Loss due to impairment of real estate -- 500 -- 500
Depreciation and amortization 25 36 50 73
Management fees 6 6 12 13
General and administrative 40 34 64 55
------------- ------------ ------------- ------------
Total expenses 127 650 239 790
------------- ------------ ------------- ------------
Net income (loss) $ 212 $ (330) $ 436 $ (15)
============= ============ ============= ============
Net income (loss) allocated to general partners $ 17 $ (26) $ 35 $ (1)
============= ============ ============= ============
Net income (loss) allocated to limited partners $ 195 $ (304) $ 401 $ (14)
============= ============ ============= ============
Net income (loss) per Unit of Limited
Partnership Interest $ 19.49 $ (30.38) $ 40.08 $ (1.40)
============= ============ ============= ============
Distributions per Unit of Limited
Partnership Interest $ 13.39 $ 19.69 $ 31.48 $ 48.28
============= ============ ============= ============
</TABLE>
See notes to financial statements.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
Statement of Partners' Capital (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
Units of
Limited General Limited
Partnership Partners' Partners' Total
Interest Deficit Capital Capital
-------- ------- ------- -------
<S> <C> <C> <C> <C>
Balance - January 1, 1997 10,005 $ (203) $ 5,505 $ 5,302
Distributions -- (315) (315)
Net income 35 401 436
-------- ------- ------- -------
Balance - June 30, 1997 10,005 $ (168) $ 5,591 $ 5,423
======== ======= ======= =======
</TABLE>
See notes to financial statements.
4 of 12
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended
(In Thousands) June 30, 1997 June 30, 1996
------------- -------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) $ 436 $ (15)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 50 73
Loss due to impairment of real estate -- 500
Changes in assets and liabilities:
Decrease (increase) in other assets 92 (26)
(Decrease) increase in accounts payable and
accrued expenses (72) 19
------------- -------------
Net cash provided by operating activities 506 551
------------- -------------
Cash Flows From Investing Activities:
Minimum lease payments received, net of interest income
earned, on leases accounted for under the financing
method 149 133
------------- -------------
Cash provided by investing activities 149 133
------------- -------------
Cash Flows From Financing Activities:
Principal payments on mortgage notes (137) (142)
Cash distributions (386) (453)
------------- -------------
Cash used in financing activities (523) (595)
------------- -------------
Net increase in cash and cash equivalents 132 89
Cash and cash equivalents, beginning of period 491 244
------------- -------------
Cash and cash equivalents, end of period $ 623 $ 333
============= =============
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 113 $ 149
============= =============
Supplemental Disclosure of Non-Cash Financing Activities:
Accrued Distribution to Partners $ 134 $ 213
============= =============
</TABLE>
See notes to financial statements.
5 of 12
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
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
annual report on Form 10-KSB for the year ended December 31, 1996.
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, 1997 presentation. The
balance sheet at December 31, 1996 was derived from audited
financial statements at such date.
The results of operations for the six months ended June 30, 1997
and 1996 are not necessarily indicative of the results to be
expected for the full year.
2. Related Party Transactions
Management fees paid or accrued by the Partnership to an affiliate
of the Managing General Partner, totaled $12,000 and $13,000 during
the six months ended June 30, 1997 and 1996, respectively.
6 of 12
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
ITEM 2. Management's Discussion and Analysis or Plan of Operations.
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 remaining nine properties are leased to
one or more tenants pursuant to net or modified net leases with
remaining lease terms, subject to extensions, ranging between
approximately six months and eleven years. The Partnership receives
rental 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 a $132,000 increase at June 30, 1997, as compared to
December 31, 1996. The Partnership's $506,000 of cash provided by
operating activities along with $149,000 of cash provided by
investing activities were only partially offset by $137,000 of cash
used for mortgage payments and $386,000 of partner distributions
(financing activities). At June 30, 1997, the Partnership had
$623,000 in cash reserves. 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. Due to the net and long-term nature of
the original leases, inflation and changing prices have not
significantly affected the Partnership's revenues and net income.
As tenant leases expire, the Partnership expects that inflation and
changing prices will affect the Partnership's revenues. The
Partnership's rental and interest income was sufficient for the six
months ended June 30, 1997, and is expected to be sufficient in
future periods, to pay the Partnership's operating expenses and
debt service. Upon expiration of tenant leases the Partnership will
be required to either sell the properties or procure new tenants.
In addition, if the Partnership is unable to sell such properties
prior to their lease expiration, extend the current leases or
re-let the properties upon the expiration of the lease terms, the
Partnership would be responsible for operating expenses, such as
real estate taxes, insurance and utility expenses associated with
the properties. The Partnership maintains cash reserves to enable
it to make potential capital improvements required in connection
with the re-letting of the properties.
The Partnership has continued to make quarterly distributions to
its partners from operating revenue since inception. 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 June 1, 1998 and the related
$425,000 balloon payment due February 1, 1998, on the mortgage note
secured by the J.C. Penney property. If, at that time, the
Partnership is unable to extend or refinance the mortgage note or
sell the property, the property could be lost through foreclosure.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
ITEM 2. Management's Discussion and Analysis or Plan of Operation.
(Continued)
Results of Operations
Net income increased by $451,000 for the six months ended June 30,
1997 as compared to 1996, due to the $500,000 loss for impairment
of value recorded in June, 1996 on the Partnership's property
located in Hurst, Texas. Rental income (excluding $102,000 received
from the Partnership's Greenville, South Carolina property sold on
August 1, 1996) increased by $10,000 for the six months ended June
30, 1997, as compared to the prior comparable period, due to an
increase in percentage rents. Interest and depreciation expense
decreased for the six months ended June 30, 1997, as compared to
1996, as a result of the August 1, 1996 mortgage repayment related
to the sale of the above property. General and administrative
expenses increased by $9,000 for the six months ended June 30,
1997, as compared to 1996, primarily due to an increase in certain
professional fees. Other items of income and expense remained
relatively constant.
8 of 12
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
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, 1997.
9 of 12
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
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 4, 1997
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
Exhibit Index
Exhibit Page No.
------- --------
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
FORM 10-QSB JUNE 30, 1997
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, 1997:
<TABLE>
<S> <C>
Net income $ 212,000
Add: Depreciation and amortization charges to income not
affecting cash available for distribution 25,000
Minimum lease payments received, net of interest
income earned, on leases accounted for under the
financing method 76,000
Less: Mortgage principal payments (70,000)
Other non-cash income (3,000)
Cash to reserves (106,000)
-------------
Cash Available for Distribution $ 134,000
=============
Distributions allocated to General Partners $ --
=============
Distributions allocated to Limited Partners $ 134,000
=============
</TABLE>
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, 1997:
<TABLE>
<CAPTION>
Entity Receiving Form of
Compensation Compensation Amount
------------ ------------ ------
<S> <C> <C>
Winthrop Management Property Management Fees $6,000
WFC Realty Co., Inc.
(Initial Limited Partner) Interest in Cash Available
for Distribution $ 67
</TABLE>
12 of 12
<TABLE> <S> <C>
<PAGE>
<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-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 623,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 9,197,000
<DEPRECIATION> (2,321,000)
<TOTAL-ASSETS> 7,594,000
<CURRENT-LIABILITIES> 0
<BONDS> 2,005,000
<COMMON> 0
0
0
<OTHER-SE> 5,423,000
<TOTAL-LIABILITY-AND-EQUITY> 7,594,000
<SALES> 0
<TOTAL-REVENUES> 661,000
<CGS> 0
<TOTAL-COSTS> 62,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 113,000
<INCOME-PRETAX> 436,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 436,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 436,000
<EPS-PRIMARY> 40.08
<EPS-DILUTED> 40.08
</TABLE>
