<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission File
For the year ended December 31, 1997 No. 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
incorporation or organization) Identification No.)
5 Cambridge Center, Cambridge, Massachusetts 02142
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (617) 234-3000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]
Registrant's revenues for its most recent fiscal year were $1,199,000.
No market for the Limited Partnership Units exists and therefore, a market
value for such Units cannot be determined.
DOCUMENTS INCORPORATED BY REFERENCE
None
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PART I
Item 1. Description of Business.
Winthrop Partners 79 Limited Partnership (the "Partnership"), was
organized under the Uniform Limited Partnership Act of the Commonwealth of
Massachusetts on November 30, 1978, for the purpose of owning and leasing
commercial and industrial real properties. The Partnership was initially
capitalized with contributions of $1,000 from each of the two General Partners
and $5,000 from the Initial Limited Partner. On December 14, 1978, the
Partnership filed a Registration Statement on Form S-11 with the Securities
and Exchange Commission (the "Commission") with respect to a public offering
of 10,000 Units of limited partnership interest ("Units") at a purchase price
of $1,000 per Unit. The Registration Statement was declared effective on April
10, 1979. The offering terminated in April 1980, at which time all 10,000
Units, representing capital contributions from Limited Partners of
$10,000,000, had been subscribed for.
The General Partners of the Partnership are One Winthrop Properties,
Inc., a Massachusetts corporation (the "Managing General Partner"), and
Linnaeus-Hampshire Realty Limited Partnership (formerly known as
Linnaeus-Hampshire Realty Company), a Massachusetts limited partnership (the
"Associate General Partner"). The Managing General Partner is a wholly-owned
subsidiary of First Winthrop Corporation ("First Winthrop"), a Delaware
corporation, which is wholly owned by Winthrop Financial Associates, A Limited
Partnership ("WFA"), a Maryland limited partnership. See "Change in Control".
The Partnership's only business is owning and leasing improved real
estate.
The Partnership invested all of the net proceeds of the Limited
Partners' capital contributions, other than approximately $60,000 which were
originally set aside as reserves, in ten real properties. The funds set aside
in reserves were invested in money market instruments and applied, over time,
to repairs, improvements and other items associated with Partnership's
obligations in respect of the Properties. The reserve balance as of December
31, 1997 net of accounts payable, accrued expenses and distributions payable
to Partners was approximately $747,000. The Partnership's future cash
distributions will include ongoing distributions from rental income and
one-time distributions of sale proceeds. Rental income will be affected by the
terms of any new leases, any tenant improvement and leasing costs associated
with renewing leases with existing tenants or signing
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leases with new tenants, the loss of rent during any period when a property is
not under lease and the loss of rent after a property is sold. In light of the
pending maturity of the loan encumbering the Partnership's Batavia property,
the Partnership has suspended quarterly distributions from operations.
Pursuant to the terms of the Partnership Agreement, so long as limited
partners have received aggregate distributions from inception equal to 8% of
their adjusted capital contributions on a cumulative basis, the general
partner is entitled to receive distributions in an amount equal to 8% of the
total distributions paid to the limited partners. See "Item 7 Financial
Statements, Note 2." Distributions of sale proceeds will be made as a return
of capital until investors have received a return of their original capital
contribution. Pursuant to the Partnership's partnership agreement, sale
proceeds are distributed 100% to investors until they have received their
$1,000 per unit capital contribution. The general partners' 8% share of sale
proceeds would be paid subsequently. See Item 2, "Description of Properties"
for a description of Registrant's remaining properties.
Property Matters
Gordy's Food & Liquor Inc., Chippewa Falls, Wisconsin. On March 16,
1998, the Partnership entered into an agreement pursuant to which it agreed to
sell this property to the tenant for a purchase price of $975,000. This sale
is subject to the satisfaction of numerous conditions outside the control of
the Partnership. Accordingly, there can be no assurance that this transaction
will be consummated. It is expected that this transaction will be consummated,
if at all, during the second quarter of 1998.
J.W. Burress, Incorporated, Greenville, South Carolina. On August 1,
1996, the Partnership consummated the sale of this property to an affiliate of
the tenant. The purchase price for the property was $1,525,000 with net
proceeds to the Partnership of approximately $1,040,000. The sale resulted in
a gain of $1,018,000. The net proceeds from the sale were distributed to the
limited partners in November, 1996.
Floors, Inc. and B&G, Inc., Hurst, Texas. On August 31, 1995,
Creative Paint assigned the lease to Floors, Inc. See Item 2, "Description of
Properties."
J.C. Penney Co., Inc., Batavia, New York. The maturity date of the loan
encumbering this property was extended from July 1, 1995 to May 1, 1998. The
Partnership is currently negotiating to obtain a new loan on substantially the
same terms as the current loan except that the loan will mature on August 31,
1999, the
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expiration of the lease term. See Item 6, "Management's Discussion and
Analysis or Plan of Operation."
Employees
The Partnership does not have any employees. Services are performed
for the Partnership by the Managing General Partner, and agents retained by
it, including an affiliate of the General Partners, Winthrop Management.
Change in Control
On July 18, 1995 Londonderry Acquisition II Limited Partnership
("Londonderry II"), a Delaware limited partnership, an affiliate of Apollo Real
Estate Advisors, L.P. ("Apollo"), acquired, among other things, a general
partner interest in W.L. Realty, L.P. ("W.L. Realty") and a sixty four percent
(64%) limited partnership interest in W.L. Realty, and WFA acquired the sole
general partner interest in the Associate General Partner.
As a result of the foregoing acquisitions, Londonderry II is the sole
general partner of W.L. Realty which is the sole general partner of Linnaeus,
and which in turn was, until October 1997, the sole, and is currently the
managing, general partner of WFA. As a result of the foregoing, effective July
18, 1995, Londonderry II, an affiliate of Apollo, became the controlling
entity of the Managing General Partner and the Associate General Partner. In
connection with the transfer of control, the officers and directors of the
Managing General Partner resigned and Londonderry II appointed new officers
and directors. See Item 9, "Directors, Executive Officers, Promoters and
Control Persons; Compliance With Section 16(a) of the Exchange Act.
Item 2. Description of Properties.
A description of the Partnership's properties at February 1, 1998 is
as follows. All of Registrant's remaining properties are owned in fee.
Total Cost Original Size
Tenant/ Date of of the Portfolio Building/Land
Location Purchase Property(1) Percentage(2) (Sq. ft.)
- -------- -------- ----------- ------------- ---------
J.C. Penney
Batavia, NY 8/1/79 $ 1,092,598 8 38,720/38,720
Walgreen Co.
University 8/3/79 $ 901,294 6.6 15,500/39,200
City, MO
Toys "R" Us
San Antonio, TX 1/25/80 $ 1,987,129 14.6 45,000/195,970
4
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Total Cost Original Size
Tenant/ Date of of the Portfolio Building/Land
Location Purchase Property(1) Percentage(2) (Sq. ft.)
- -------- -------- ----------- ------------- ---------
Toys "R" Us
Fort Worth, TX 1/25/80 $ 1,873,769 13.7 45,000/185,105
Frank's Nursery
Sales, Inc.
Hillside, IL 1/30/80 $ 706,008 5.2 14,920/122,000
Lucky Stores,
Inc. (3)
Cedar Rapids, IA 6/2/80 $ 1,522,908 11.2 36,856/133,110
Creative Paint
& Wallpaper, Inc.
and B&G, Inc. dba
Splash Pools & Spas,
fka Handy Dan(4)
Hurst, TX 6/10/80 $ 1,645,692 12.1 36,000/180,000
Gordy's Food &
Liquor, Inc. (5)
Chippewa Falls, WI 6/17/80 $ 1,380,816 10.1 26,000/88,000
Wal-Mart Stores
Mexia, TX 10/31/80 $ 977,665 7.2 41,400/185,105
- -------------------------
(1) Includes acquisition fees and expenses.
(2) Represents the percentage of original cash invested in the individual
property of the total cash invested in all properties.
(3) During 1988, Lucky Stores, Inc. exercised its option to sublet the
premises to Graphics Division of Rockwell Collins International, an
avionics and defense communications company. Lucky Stores remains
liable for all obligations under its lease agreement.
(4) Due to default and bankruptcy of prior tenant Channel Homes, fka Handy
Dan, new leases with two new tenants (Creative Paint & Wallpaper, Inc.
and B&G, Inc.) were entered into as of February 1, 1991 for this
property. In 1995, Creative Paint & Wallpaper, Inc. sublet its space
to Floors, Inc.
(5) During the second quarter of 1983, National Supermarkets, Inc.
assigned its lease of the Chippewa Falls, Wisconsin store to Gateway
Foods, Inc., which simultaneously subleased to Gordy's Food & Liquor,
Inc. All parties are jointly and severally responsible for the
tenant's obligations under the lease. The original lease terms were
not modified in any way in connection with the assignment and
sublease.
The Partnership owns the fee interest in each of these properties.
Five of the properties are subject to first mortgages securing indebtedness
which was incurred or assumed by the Partnership in connection with the
acquisition. See "Item 7, Financial Statements, Note - 6" for information
relating to the mortgages encumbering the Partnership's properties. All of the
properties are commercial in nature. Each of the Properties is net leased to a
single tenant unaffiliated with the Partnership
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(with the sole exception of the Hurst, Texas property which is now leased to
two tenants, Floors, Inc. and B&G, Inc.). Each of the tenants, other than
Gordy's Food & Liquor, Inc., Creative Paint and Wallpaper, Inc. and B&G,
Inc., is a public company or a subsidiary of a public company.
The tenants under all ten leases have exclusive control over the
day-to-day business operations conducted at the Properties as well as
decisions with respect to the initiation of any development or renovations at
the Properties. The Partnership has limited approval rights over any such
renovation programs proposed by the tenants. Six of the Properties are leased
on a triple net basis. The Partnership has no responsibility for any
maintenance, repairs or improvements associated with these Properties. In
addition, the tenants at these properties are responsible for all insurance
requirements and the payment of real estate taxes directly to the taxing
authorities. The Partnership believes that each of the properties are
adequately insured. With respect to the lease with J.C. Penney Co., Inc.,
Batavia, NY, the Partnership is responsible for all structural and exterior
repairs, carrying insurance, paying all real estate taxes up to a specified
maximum amount, repainting, varnishing or otherwise redecorating certain
exterior portions of the building every three years and paying certain common
facility maintenance charges up to a fixed amount. The Partnership spent
$17,076 for roof and HVAC repairs at this property in 1997. With respect to
the lease with Walgreen Co., St. Louis, MO, the Partnership is responsible for
maintenance of the structural portions of the building, all repairs required
by reason of dry rot or termites and the first $750 per year of roof repairs.
No funds were spent by the Partnership on these items in 1996 or 1997. With
respect to the leases with Creative Paint & Wallpaper and B&G, Inc., Hurst,
TX, the Partnership is responsible for structural maintenance of the premises.
The Partnership spent $1,125 and $0 for these items in 1996 and 1997,
respectively. Under both leases at this Property, the Partnership is required
to administer the payment of real estate taxes and to procure and maintain
insurance for the Property. The Partnership is fully reimbursed for real
estate taxes and for annual insurance premiums up to $1,000.
Each retail tenant is subject to competition from other companies
offering similar products in the locations of the property leased by such
tenant. In addition, the Partnership anticipates that it would be subject to
significant competition in attracting tenants upon the expiration or
termination of any of the leases of its properties. The Partnership has no
control over the tenants' responses to competitive conditions impacting the
businesses operated by the tenants at each of the properties.
6
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Tenants with 1997 rental payments of 10% or more of the Partnership's
total rental revenue are as follows: Toys "R" Us, Inc., San Antonio, Texas,
15%, Toys "R" Us, Inc., Ft. Worth, Texas, 13%; Wal-Mart, Mexia, Texas 12%;
J.C. Penney, Batavia, New York 10%; Lucky Stores, Inc., Cedar Rapids, Iowa
10%; and Walgreen Co., University City, Missouri 12%. The Partnership expects
the rental payments from the same tenants to amount to approximately the same
respective percentages of the Partnership's total income in 1998.
The following table sets forth the tenant, business conducted by the
tenant, expiration date of the lease term, renewal options and the 1997 annual
base rent for the leases at the properties:
1997
Tenant Business of Lease Renewal Annual
Property/Location Tenant Expiration Options(1) Rent
- ----------------- ------ ---------- ---------- ----
J.C. Penney
Batavia, NY Retail Dept. 8/31/99 5 - 5Yr. $116,160
Store
Walgreen Co.
University Retail 12/31/2008 (2) $ 75,525(3)
City, MO Drugstore
Toys "R" Us
San Antonio, TX Toy Store 1/31/2000 6 - 5Yr. $262,532
Toys "R" Us
Fort Worth, TX Toy Store 1/31/2000 6 - 5Yr. $247,569
Frank's Nursery
Sales, Inc.
Hillside, IL Nursery and 12/31/2004 2 - 5Yr. $ 67,000
Crafts
Lucky Stores,
Inc. (4)
Cedar Rapids, IA Graphic Arts 6/2/2000 6 - 5Yr. $117,200
Creative Paint
& Wallpaper, Inc.
and B&G, Inc. dba
Splash Pools & Spas, Paint & 1/31/2001 1 - 7Yr. $184,280
fka Handy Dan(5) Wallpaper
Hurst, TX Store; Bath
& Spa Store
Gordy's Food &
Liquor, Inc. (6)
Chippewa Falls, WI Retail Food 6/17/2000 6 - 5Yr. $145,200
& Beverage
Store
Wal-Mart Stores
Mexia, TX Dept. Store 10/31/2000 5 - 5Yr. $111,206(7)
- -------------------------
7
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(1) The first number represents the number of renewal options. The second
number represents the length of each option.
(2) Tenant has the right to terminate the lease 8/99 and 8/2004.
(3) Tenant paid additional percentage rent of $71,668 in 1997.
(4) During 1988, Lucky Stores, Inc. exercised its option to sublet the
premises to Graphics Division of Rockwell Collins International, an
avionics and defense communications company. The sublease is for a
three-year term with two three-year options to renew. Lucky Stores
remains liable for all obligations under its lease agreement.
(5) Due to default and bankruptcy of prior tenant Channel Homes, fka
Handy Dan, new leases with two new tenants were entered into as of
February 1, 1991 for this property. In 1995, Creative Paint &
Wallpaper, Inc. sublet its space to Floors, Inc.
(6) During the second quarter of 1983, National Supermarkets, Inc.
assigned its lease of the Chippewa Falls, Wisconsin store to Gateway
Foods, Inc., which simultaneously subleased to Gordy's Food & Liquor,
Inc. All parties are jointly and severally responsible for the
tenant's obligations under the lease. The original lease terms were
not modified in any way in connection with the assignment and
sublease.
(7) An additional percentage rent of $74,351 was paid in 1997.
Set forth below is a table showing the gross carrying value and
accumulated depreciation and federal tax basis of each of the Partnership's
properties as of December 31, 1997:
Gross
Carrying Accumulated Federal
Property Value(1) Depreciation(1) Rate Method Tax Basis
- -------- -------- --------------- ---- ------ ---------
Batavia, NY $1,092,598 $768,333 5/40 yr. S/L $ 324,265
University 901,294 545,267 5/40 yr. S/L 356,029
City, MO
San Antonio, TX 735,238 - - - 1,179,780
Fort Worth, TX 487,180 - - - 946,110
Hillside, IL 261,223 - - - 341,712
Cedar Rapids, IA 1,522,908 904,309 5/40 yr. S/L 618,596
Hurst, TX 1,529,882 148,066 5/40 yr. S/L 851,861
Chippewa Falls, WI - - - - 524,718
Mexia, TX - - - - 294,852
(1) As accounted for under Statement of Financial Accounting Standards No. 13
8
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Item 3. Legal Proceedings.
The Partnership is not a party, nor are any of its properties,
subject to any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
9
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PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.
There is no established public market for the Units. Trading in the
Units is sporadic and occurs solely through private transactions.
As of February 1, 1998, there were 862 holders of 10,005 outstanding
Units.
The Partnership Agreement requires that any Cash Available for
Distribution (as defined therein) be distributed quarterly to the Partners in
specified proportions and priorities. There are no restrictions on the
Partnership's present or future ability to make distributions of Cash
Available for Distribution. During the years ended December 31, 1997 and 1996,
Registrant has made the following cash distributions with respect to the Units
to holders thereof as of the dates set forth below in the amounts set forth
opposite such dates:
Amount of
Distribution
Per Unit
Distribution with
Respect to
Quarter Ended 1997 1996
- ------------- ---- ----
March 31 18.06 28.64
June 30 13.44 19.62
September 30 - 109.28
December 31 - 18.87
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Item 6. Management's Discussion and Analysis or Plan of
Operations.
The matters discussed in this Form 10-KSB contain certain
forward-looking statements and involve risks and uncertainties (including
changing market conditions, competitive and regulatory matters, etc.) detailed
in the disclosure contained in this Form 10-KSB and the other filings with the
Securities and Exchange Commission made by the Partnership from time to time.
The discussion of the Partnership's business and results of operations,
including forward-looking statements pertaining to such matters, does not take
into account the effects of any changes to the Partnership's business and
results of operation. Accordingly, actual results could differ materially from
those projected in the forward-looking statements as a result of a number of
factors, including those identified herein.
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 18 months and ten
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 $278,000 increase at December 31, 1997, as compared to December 31, 1996.
The Partnership's $772,000 of cash provided by operating activities along with
$306,000 of cash provided by investing activities were only partially offset
by $280,000 of cash used for mortgage payments and $520,000 of partner
distributions (financing activities). The Partnership invests its working
capital reserves in a money market mutual fund. Cash provided by operating
activities declined during 1997, as compared to 1996, due to the timing of
payment of accounts payable and accrued expenses.
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 year ended December 31, 1997, and is expected
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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. 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. Distributions in 1997 and
1996 totaled $315,000 and $1,828,000, respectively. The Managing General
Partner has determined to cease making distributions in light of the J.C.
Penney lease expiration on August 31, 1999 and the related $419,000 balloon
payment due on February 1, 1998 on the mortgage note secured by the J.C.
Penney property. On February 1, 1998, the Partnership obtained an extension on
the mortgage until May 1, 1998. The Managing General Partner is currently
negotiating with the lender to renew the note until August 31, 1999. If the
Partnership is unable to extend or refinance the mortgage, or sell the
property, the property could be lost through foreclosure. If the property is
lost through foreclosure, the Partnership would not incur a loss for financial
reporting purposes.
The Partnership is dependent upon the General Partner for management
and administrative services. The General Partner has completed an assessment
and believes that its computer systems will function properly with respect to
dates in the year 2000 and thereafter (the "Year 2000 Issue"). Accordingly, it
is not expected that the Partnership will incur any material costs associated
with, or be materially affected by, the Year 2000 Issue.
Results of Operations
Net income decreased by $571,000 for the year ended December 31, 1997
as compared to 1996, due to the gain of $1,018,000 on sale of the
Partnership's property located in Greenville, South Carolina to an affiliate
of the tenant at the property on August 1, 1996, which was only partially
offset by a $500,000 loss for impairment of value recorded in June 1996, on
the Partnership's property located in Hurst, Texas. With respect to the
remaining properties, rental income remained relatively constant for the year
ended December 31, 1997 as compared to 1996. As a result of the August 1, 1996
sale of the property and related mortgage repayment, interest and depreciation
expense decreased for the year ended December 31, 1997, as compared to 1996.
Operating expenses increased by $15,000 for the year ended December 31, 1997,
as compared to 1996, primarily due to an increase in
12
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maintenance expense at the Partnership's J.C. Penney property. Other items of
income and expense remained relatively constant.
<PAGE>
13
Item 7. Financial Statements
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1997
INDEX
Page
----
Independent Auditors' Report.............................................F - 2
Financial Statements:
Balance Sheets as of December 31, 1997 and 1996..........................F - 3
Statements of Income for the Years Ended
December 31, 1997 and 1996..........................................F - 4
Statements of Partners' Capital for the Years Ended
December 31, 1997 and 1996..........................................F - 5
Statements of Cash Flows for the Years Ended
December 31, 1997 and 1996..........................................F - 6
Notes to Financial Statements............................................F - 7
F-1
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Independent Auditors' Report
To the Partners
Winthrop Partners 79 Limited Partnership
Boston, Massachusetts
We have audited the accompanying balance sheets of Winthrop Partners 79
Limited Partnership (a Massachusetts limited partnership) as of December 31,
1997 and 1996, and the related statements of income, partners' capital and
cash flows for the years then ended. 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 financial statements referred to above present fairly, in
all material respects, the financial position of Winthrop Partners 79 Limited
Partnership as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
/s/ Imowitz Koenig & Co., LLP
New York, New York
February 2, 1998
F-2
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
BALANCE SHEETS
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------------------
1997 1996
--------------------- --------------------
ASSETS
<S> <C> <C>
Real Estate Leased to Others:
Accounted for under the operating method,
at cost, net of accumulated depreciation of
$2,366 (1997) and $2,277 (1996) $ 4,164 $ 4,253
Accounted for under the financing method 2,510 2,816
--------------------- --------------------
6,674 7,069
Other Assets:
Cash and cash equivalents 769 491
Other assets 175 193
--------------------- --------------------
Total Assets $ 7,618 $ 7,753
===================== ====================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage notes payable $ 1,862 $ 2,142
Accounts payable and accrued expenses 22 104
Distributions payable to partners - 205
--------------------- --------------------
Total Liabilities 1,884 2,451
--------------------- --------------------
Partners' Capital:
Limited Partners -
Units of Limited Partnership Interest,
$1,000 stated value per Unit; authorized,
issued and outstanding - 10,005 Units 5,877 5,505
General Partners (Deficit) (143) (203)
--------------------- --------------------
Total Partners' Capital 5,734 5,302
--------------------- --------------------
Total Liabilities and Partners' Capital $ 7,618 $ 7,753
===================== ====================
</TABLE>
See notes to financial statements.
F-3
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
STATEMENTS OF INCOME
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------
1997 1996
--------------------- ---------------------
<S> <C> <C>
Income:
Rental income from real estate leases accounted
for under the operating method $ 825 $ 935
Interest on short-term investments 32 33
Interest income on real estate leases accounted
for under the financing method 342 373
Gain on sale of property - 1,018
--------------------- ---------------------
Total income 1,199 2,359
--------------------- ---------------------
Expenses:
Operating 41 26
Interest 219 282
Loss due to impairment of real estate - 500
Depreciation and amortization 101 130
Management fees 22 23
General and administrative 69 80
--------------------- ---------------------
Total expenses 452 1,041
--------------------- ---------------------
Net income $ 747 $ 1,318
===================== =====================
Net income allocated to general partners $ 60 $ 105
===================== =====================
Net income allocated to limited partners $ 687 $ 1,213
===================== =====================
Net income per Unit of Limited Partnership Interest $ 68.67 $ 121.24
===================== =====================
Distributions per Unit of Limited Partnership Interest $ 31.48 $ 176.41
===================== =====================
</TABLE>
See notes to financial statements.
F-4
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
STATEMENTS OF PARTNERS' CAPITAL
YEARS ENDED DECEMBER 31, 1997 AND 1996
(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, 1996 10,005 $ (245) $ 6,057 $ 5,812
Distributions (63) (1,765) (1,828)
Net income 105 1,213 1,318
------------------ ------------------- ------------------- --------------------
Balance - December 31, 1996 10,005 (203) 5,505 5,302
Distributions - (315) (315)
Net income 60 687 747
------------------ ------------------- ------------------- --------------------
Balance - December 31, 1997 10,005 $ (143) $ 5,877 $ 5,734
================== =================== =================== ====================
</TABLE>
See notes to financial statements.
F-5
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------
1997 1996
--------------------- --------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 747 $ 1,318
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 89 118
Amortization 12 12
Loss due to impairment of real estate - 500
Gain on sale of property - (1,018)
Changes in assets and liabilities:
Decrease (increase) in other assets 6 (62)
(Decrease) increase in accounts payable and
accrued expenses (82) 74
--------------------- --------------------
Net cash provided by operating activities 772 942
--------------------- --------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Minimum lease payments received, net of interest income
earned, on leases accounted for under the financing method 306 274
Proceeds from sale of property - 1,525
--------------------- --------------------
Cash provided by investing activities 306 1,799
--------------------- --------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on mortgage notes (280) (270)
Repayment of mortgage note - (459)
Cash distributions (520) (1,765)
--------------------- --------------------
Cash used in financing activities (800) (2,494)
--------------------- --------------------
Net increase in cash and cash equivalents 278 247
Cash and Cash Equivalents, Beginning of Year 491 244
--------------------- --------------------
Cash and Cash Equivalents, End of Year $ 769 $ 491
===================== ====================
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 219 $ 282
===================== ====================
Supplemental Disclosure of Non-cash Financing
Activities -
Distributions accrued and not paid as of December 31 $ - $ 205
===================== ====================
</TABLE>
See notes to financial statements.
F-6
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Winthrop Partners 79 Limited Partnership (the "Partnership"), was
organized under the Uniform Limited Partnership Act of the Commonwealth
of Massachusetts on November 30, 1978 for the purpose of owning and
leasing commercial and industrial real properties. The Partnership owns
and leases nine properties, four of which are located in Texas with the
other five in various locations throughout the United States. With the
exception of one property, all are leased to single tenants under triple
net lease agreements.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Such estimates that are particularly susceptible
to change relate to the Partnership's estimate of the fair value of real
estate. Actual results could differ from those estimates.
Leases
The Partnership leases its real properties and accounts for such leases
in accordance with the provisions of Statement of Financial Accounting
Standards No. 13, "Accounting for Leases", as amended. This statement
sets forth specific criteria for determining whether a lease should be
accounted for as a financing lease or an operating lease.
(a) Financing Method
Under this method, minimum lease payments to be received plus the
estimated value of the property at the end of the lease are
considered to be the Partnership's gross investment in the lease.
Unearned income, representing the difference between gross investment
and actual cost of the leased property, is amortized over the lease
term using the interest rate implicit in the lease to provide a level
rate of return over the lease term.
F-7
<PAGE>
(b) Operating Method
Under this method, revenue is recognized as rentals become due, which
does not materially differ from the straight-line method. Expenses
(including depreciation) are charged to operations as incurred.
Percentage Rent
The Partnership has entered into several leases that provide for a
minimum annual rent plus additional rent based on percentages of sales at
the properties ("percentage rent"). These percentage rents are recorded
on a cash basis. For the years ended December 31, 1997 and 1996, the
Partnership received percentage rent totaling approximately $146,000 and
$136,000, respectively.
Real Estate
Real Estate is carried at cost, adjusted for depreciation and impairment
of value. In accordance with 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," the Partnership records
impairment losses 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 loss 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.
Depreciation
Component depreciation on real estate leased to others, accounted for
under the operating method, is computed using the straight-line method
over the estimated useful life of each class of asset, which ranges from
5 to 40 years. The cost of the properties represents the purchase price
of the properties plus acquisition and closing costs, or, to the extent
that the property had previously been accounted for under the financing
method, the depreciable base is the residual value at the date of
implementation of operating lease accounting.
F-8
<PAGE>
Loan Costs
Loan costs of $114,000 are included in other assets in the accompanying
balance sheet and are being amortized on a straight-line basis over the
life of the respective loans. At December 31, 1997 and 1996, accumulated
amortization totaled $81,000 and $69,000, respectively.
Cash and Cash Equivalents
The Partnership considers all highly liquid investments with an original
maturity of three months or less at the time of purchase to be cash
equivalents.
Distributions to Partners
Cash distributions have been suspended by the Partnership, pending
resolution of the maturing debt on the Batavia, NY property (see Note
10). The cash distribution due partners for the three months ended
December 31, 1996 is recorded in the accompanying financial statements as
a liability and a reduction of partners' capital. As provided in the
partnership agreement, quarterly distributions, if any, are payable to
partners within 60 days after the end of the quarter.
Net Income Per Limited Partnership Unit
Net income per limited partnership unit is computed by dividing net
income allocated to the limited partners by the 10,005 units outstanding.
Income Taxes
Taxable income or loss of the Partnership is reported in the income tax
returns of its partners. Accordingly, no provision for income taxes is
made in the financial statements of the Partnership.
Concentration of Credit Risk
Principally all of the Partnership's cash and cash equivalents consist of
a mutual fund that invests in U.S. treasury bills and repurchase
agreements with original maturity dates of three months or less.
Reclassifications
Certain reclassifications have been made to 1996 balances to conform to
the 1997 presentation.
F-9
<PAGE>
2. TRANSACTIONS WITH RELATED PARTIES
One Winthrop Properties, Inc. ("One Winthrop") (the "Managing General
Partner") and Linnaeus-Hampshire Realty Limited Partnership are the
general partners of the Partnership. Winthrop Management LLC, an
affiliate of One Winthrop, is entitled to annual property management fees
equal to 1.5% of the excess of cash receipts over cash expenditures
(excluding debt service, property management fees and capital
expenditures) from each property managed by it. For the years ended
December 31, 1997 and 1996, Winthrop Management earned $22,000 and
$23,000, respectively, for managing the properties of the Partnership.
The general partners are entitled to 8% of Cash Available for
Distribution, subordinated to a cumulative priority quarterly distribution
to the limited partners as provided in the partnership agreement. Such
distributions aggregated $63,000 for the year ended December 31, 1996.
During the liquidation stage of the Partnership, the general partners and
their affiliates are entitled to receive certain fees and distributions,
subordinated to specified minimum returns to the limited partners as
described in the partnership agreement.
3. REAL ESTATE LEASED TO OTHERS ACCOUNTED FOR UNDER THE OPERATING
METHOD
Real estate leased to others, at cost, accounted for under the operating
method is summarized as follows:
<TABLE>
<CAPTION>
December 31,
-------------------------------
1997 1996
---- ----
<S> <C> <C>
Land $ 3,303,000 $ 3,300,000
Commercial buildings 3,227,000 3,230,000
Accumulated depreciation (2,366,000) (2,277,000)
------------------- -------------------
$ 4,164,000 $ 4,253,000
=================== ===================
</TABLE>
The cost of real estate has been adjusted to reflect a $500,000 impairment
loss in 1996.
As of December 31, 1997 and 1996, properties (and related operating
leases) with a carrying value of $1,706,000 and $1,740,000, respectively,
were pledged to collateralize payment of mortgage notes payable.
F-10
<PAGE>
The following is a summary of the minimum anticipated future rental
receipts, excluding percentage rents, by year, under the noncancelable
portion of the operating leases:
1998.........................................................$ 679,000
1999......................................................... 641,000
2000......................................................... 357,000
2001......................................................... 116,000
2002......................................................... 100,000
Thereafter................................................... 502,000
------------------
Total........................................................$ 2,395,000
==================
4. REAL ESTATE LEASED TO OTHERS ACCOUNTED FOR UNDER THE FINANCING METHOD
Real estate leased to others, accounted for under the financing method,
is summarized as follows:
December 31,
------------
1997 1996
---- ----
Minimum lease payments receivable $ 1,782,000 $ 2,429,000
Unguaranteed residual value 2,006,000 2,006,000
------------ ---------------
3,788,000 4,435,000
Less: Unearned income (1,278,000) (1,619,000)
------------ ---------------
$ 2,510,000 $ 2,816,000
============ ===============
As of December 31, 1997 and 1996, respectively, real estate and the
related lease payments with a net investment in financing leases of
$1,172,000 and $1,370,000 were pledged to collateralize the payment of
mortgage notes payable.
The following is a summary of the minimum anticipated future rental
receipts, excluding percentage rents, by year, under the financing
leases:
1998.........................................................$ 647,000
1999......................................................... 647,000
2000......................................................... 237,000
2001......................................................... 42,000
2002......................................................... 42,000
Thereafter................................................... 167,000
------------------
Total........................................................$ 1,782,000
==================
F-11
<PAGE>
5. SIGNIFICANT TENANTS
For the year ended December 31, 1997 approximately 72% of revenue from
rental operations was from six tenants. For the year ended December 31,
1996 four tenants comprised approximately 48% of the Partnership's rental
revenue.
6. MORTGAGE NOTES PAYABLE
The mortgage notes payable by the Partnership are summarized as follows:
<TABLE>
<CAPTION>
December 31,
------------
1997 1996
---- ----
<S> <C> <C>
Prime rate plus 1.5% mortgage note (10.0% at December 31, 1997), due in
monthly installments of $2,980 for principal plus interest. The note
matured on February 1, 1998 with a balloon payment of approximately
$419,000 (see Note 10) $ 426,000 $ 461,000
10.115% mortgage note, due in monthly installments of $2,730 for
principal and interest, maturing on December 1, 2004 163,000 179,000
12% mortgage note, due in monthly installments of $12,618 for principal
and interest, maturing on July 1, 2000 326,000 431,000
12% mortgage note, due in monthly installments of $11,892 for principal
and interest, maturing on July 1, 2000 307,000 406,000
10.25% mortgage note, due in monthly installments of $7,622 for
principal and interest, maturing on July 1, 2010 640,000 665,000
----------- ----------
$ 1,862,000 $ 2,142,000
=========== ===========
</TABLE>
As of December 31, 1997 principal payments are required as follows:
1998.........................................................$ 700,000
1999......................................................... 309,000
2000......................................................... 196,000
2001......................................................... 60,000
2002......................................................... 67,000
Thereafter................................................... 530,000
------------------
Total........................................................$ 1,862,000
==================
F-12
<PAGE>
7. SALE OF PROPERTY
The Partnership sold its property located in Greenville, South Carolina
to an affiliate of the tenant of the property in August, 1996 for
$1,525,000, resulting in a gain of $1,018,000. Net proceeds from such
sale aggregated $1,040,000.
8. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of cash and cash equivalents approximates its fair
value due to the short term nature of such instruments. The carrying
amount of the Partnership's mortgage notes based on the borrowing rates
available to the Partnership for mortgage notes with similar terms, was
approximately $2,100,000 and $2,200,000 at December 31, 1997 and 1996,
respectively.
9. TAXABLE INCOME
The Partnership's taxable income for 1997 and 1996 differs from net
income for financial reporting purposes as follows:
1997 1996
---- ----
Net income for financial reporting purposes $747,000 $1,318,000
Plus: Minimum lease payments received,
net of interest income earned, on
leases accounted for under the
financing method 306,000 274,000
Loss due to impairment of real estate - 500,000
Minus: Depreciation on leases accounted
for under the financing method
and tax depreciation adjustment (173,000) (162,000)
-------- --------
Taxable income $880,000 $1,930,000
======== =========
Taxable income per Unit of Limited
Partnership Interest $ 80.92 $ 177.47
======== =========
10. CONTINGENCY AND SUBSEQUENT EVENT
The mortgage note encumbering the Batavia, NY property matured on
February 1, 1998, with a balloon payment of $419,000. On February 1,
1998, the Partnership obtained an extension on the mortgage until May 1,
1998. The Partnership is currently negotiating with the lender to renew
the note until August 31, 1999 (expiration date of the tenant's lease).
If the Partnership is unable to extend or refinance the mortgage, or sell
the property, the property could be lost through foreclosure. If the
property is lost through foreclosure, the Partnership would not incur a
loss for financial reporting purposes.
F-13
<PAGE>
Item 8. Changes in and Disagreements on Accounting and
Financial Disclosure.
There were no disagreements with Imowitz Koenig & Co., LLP regarding
the 1997 or 1996 audits of the Partnership's financial statements.
27
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act.
The Partnership has no officers or directors. The Managing General
Partner manages and controls substantially all of Registrant's affairs and has
general responsibility and ultimate authority in all matters affecting its
business. As of February 1, 1998, the names of the directors and executive
officers of the Managing General Partner and the position held by each of them
are as follows:
Has Served as
Position Held with the a Director or
Name Managing General Partner Officer Since
- ---- ------------------------ -------------
Michael L. Ashner Chief Executive Officer 1-96
and Director
Edward Williams Chief Financial Officer 4-96
Vice President and
Treasurer
Peter Braverman Senior Vice President 1-96
Carolyn Tiffany Vice President and Clerk 10-95
Michael L. Ashner, age 46, has been the Chief Executive Officer of
Winthrop Financial Associates, A Limited Partnership ("WFA") since January 15,
1996. From June 1994 until January 1996, Mr. Ashner was a Director, President
and Co-chairman of National Property Investors, Inc., a real estate investment
company ("NPI"). Mr. Ashner was also a Director and executive officer of NPI
Property Management Corporation ("NPI Management") from April 1984 until
January 1996. In addition, since 1981 Mr. Ashner has been President of Exeter
Capital Corporation, a firm which has organized and administered real estate
limited partnerships.
Edward V. Williams, age 57, has been the Chief Financial Officer of
WFA since April 1996. From June 1991 through March 1996, Mr. Williams was
Controller of NPI and NPI Management. Prior to 1991, Mr. Williams held other
real estate related positions including Treasurer of Johnstown American
Companies and Senior Manager at Price Waterhouse.
Peter Braverman, age 46, has been a Senior Vice President of WFA
since January 1996. From June 1995 until January 1996, Mr. Braverman was a
Vice President of NPI and NPI Management. From
28
<PAGE>
June 1991 until March 1994, Mr. Braverman was President of the Braverman Group,
a firm specializing in management consulting for the real estate and
construction industries. From 1988 to 1991, Mr. Braverman was a Vice President
and Assistant Secretary of Fischbach Corporation, a publicly traded,
international real estate and construction firm.
Carolyn Tiffany, age 31, has been employed with WFA since January
1993. From 1993 to September 1995, Ms. Tiffany was a Senior Analyst and
Associate in WFA's accounting and asset management departments. From October
1995 to present Ms. Tiffany has been a Vice President in the asset management
and investor relations departments of WFA.
One or more of the above persons are also directors or officers of a
general partner (or general partner of a general partner) of the following
limited partnerships which either have a class of securities registered
pursuant to Section 12(g) of the Securities and Exchange Act of 1934, or are
subject to the reporting requirements of Section 15(d) of such Act: Winthrop
Partners 80 Limited Partnership; Winthrop Partners 81 Limited Partnership;
Winthrop Residential Associates I, A Limited Partnership; Winthrop Residential
Associates II, A Limited Partnership; Winthrop Residential Associates III, A
Limited Partnership; 1626 New York Associates Limited Partnership; 1999
Broadway Associates Limited Partnership; Nantucket Island Associates Limited
Partnership; One Financial Place Limited Partnership; Presidential Associates
I Limited Partnership; Riverside Park Associates Limited Partnership;
Springhill Lake Investors Limited Partnership; Twelve AMH Associates Limited
Partnership; Winthrop California Investors Limited Partnership; Winthrop
Growth Investors 1 Limited Partnership; Winthrop Interim Partners I, A Limited
Partnership; Southeastern Income Properties Limited Partnership; Southeastern
Income Properties II Limited Partnership; and Winthrop Miami Associates
Limited Partnership.
Except as indicated above, neither the Partnership nor the Managing
General Partner has any significant employees within the meaning of Item
401(b) of Regulation S-B. There are no family relationships among the officers
and directors of the Managing General Partner.
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Partnership under Rule 16a-3(e) during the Partnership's most
recent fiscal year and Forms 5 and amendments thereto furnished to the
Partnership with respect to its most recent fiscal year, the Partnership is
not aware of any director, officer or beneficial owner of more than ten
percent of the units of limited partnership interest in the Partnership that
failed to file on a timely basis, as disclosed in the above
29
<PAGE>
Forms, reports required by section 16(a) of the Exchange Act during the most
recent fiscal year or prior fiscal years.
Item 10. Executive Compensation.
Registrant is not required to and did not pay any compensation to the
officers or directors of the Managing General Partner. The Managing General
Partner does not presently pay any compensation to any of its officers or
directors. (See Item 12, "Certain Relationships and Related Transactions.")
Item 11. Security Ownership of Certain Beneficial Owners and Management.
(a) Security Ownership of Certain Beneficial Owners.
No person or group is known by the Partnership to be the beneficial
owner of more than 5% of the outstanding Units at February 1, 1998. Under the
Partnership Agreement (incorporated herein by reference), the voting rights of
the Limited Partners are limited and, in some circumstances, are subject to
the prior receipt of certain opinions of counsel or judicial decisions.
Under the Partnership Agreement, the right to manage the business of
the Partnership is vested in the General Partners and is generally to be
exercised only by the Managing General Partner, although the consent of the
Associate General Partner is required for all purchases, financings,
refinancings and sales or other dispositions of the Partnership's real
properties and with respect to certain other matters.
(b) Security Ownership of Management.
At February 1, 1998, the partners of WFA and the officers, directors
and the general partner of the General Partners owned as a group 5 Units
representing less than 1% of the total number of Units outstanding.
(c) Changes in Control.
There exists no arrangement known to the Partnership the operation of
which may at a subsequent date result in a change in control of the
Partnership.
Item 12. Certain Relationship and Related Transactions.
Under the Partnership Agreement, the General Partners and their
affiliates are entitled to receive various fees, commissions, cash
distributions, allocations of taxable income or loss and expense
reimbursements from the Partnership. Pursuant
30
<PAGE>
to Section 4.1 of the Partnership Agreement, the General Partners are entitled
to 8% of Cash Available for Distribution, subordinated to a cumulative priority
quarterly distribution to the Limited Partners as provided in the Partnership
Agreement. For the years ended December 31, 1997 and 1996, the Partnership has
paid or accrued distributions from Cash Available for Distributions, as defined
in the Partnership Agreement, totaling $0 and $62,955, respectively, to the
General Partners.
During the liquidation stage of the Partnership, the General Partners
and their affiliates are entitled to receive certain fees and distributions,
subordinated to specified minimum returns to the Limited Partners as described
in the Partnership Agreement.
WFC Realty Co., Inc. owns five $1,000 limited partnership units and
receives its proportionate share of Cash Available for Distribution, pursuant
to Section 4.1 of the Partnership Agreement.
Pursuant to Section 5.3A (iii) of the Partnership Agreement, Winthrop
Management receives a Property Management fee equal to 1.5% of cash receipts
in excess of cash expenditures other than expenditures for the management fee,
debt service payments and capital improvements. For the years ended December
31, 1997 and 1996, Winthrop Management earned approximately $22,000 and
$23,000, respectively, for managing the real properties of the Partnership
Item 13. Exhibits and Reports on Form 8-K.
(a) Exhibits:
The Exhibits listed on the accompanying Index to Exhibits
are filed as part of this Annual Report and incorporated in
this Annual Report as set forth in said Index.
(b) Reports on Form 8-K - None
31
<PAGE>
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 this 17th day of
March 1998.
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
By: ONE WINTHROP PROPERTIES, INC.
Managing General Partner
By: /s/ Michael L. Ashner
-------------------------
Michael Ashner
Chief Executive Officer
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.
Signature/Name Title Date
- -------------- ----- ----
/s/ Michael Ashner Chief Executive March 17, 1998
- ------------------- Officer and Director
Michael Ashner
/s/ Edward Williams Chief Financial Officer March 17, 1998
- -------------------
Edward Williams
32
<PAGE>
INDEX TO EXHIBITS
Exhibit Page
- ------- ----
3 Amended and Restated Agreement of Limited (a)
Partnership of Winthrop Partners 79 Limited
Partnership dated as of April 4, 1979
4(a) See Exhibit 3
4(b) Documents which define the rights of holders
of long-term debt of the Partnership are included in
Exhibits 10(b), 10(h), 10(i), 10(j), 10(k) and 10(l)
10(a) Property Management Agreement between (b)
Winthrop Partners 79 Limited Partnership
and WP Management Co., Inc. dated March 13,
1979
10(b) Property Management Subcontract between (b)
WP Management Co., Inc. dated August 1,
1979
10(c) Turnkey Agreement between McWethy Development (b)
Corporation and Winthrop Financial Co., Inc.
dated December 7, 1978 and related Conforming
Documents dated December 7, 1978, letter from
Winthrop Financial Co., Inc. dated December 7,
1978, and letter from Messrs. Dibble Koff
Lane Stern & Stern dated January 12, 1979
10(d) Contract of Sale between Hayden Cutler and (b)
Winthrop Financial Co., Inc. dated March 22,
1979
10(e) Property Management Subcontract between (b)
WP Management Co., Inc. and Winthrop/Dolben
Management Co., Inc. dated as of August 1, 1979
10(f) Amendment dated as of August 1, 1979 to (b)
Property Management Agreement between
Winthrop Partners 79 Limited Partnership
and WP Management Co., Inc.
10(g) Documents relating to the J.C. Penney (c)
Company, Inc. property in Batavia, New York
10(h) Documents relating to the Toys "R" Us, (d)
Inc. ("Toys") property in San Antonio, Texas
33
<PAGE>
10(i) Documents relating to the Toys property in (d)
Fort Worth, Texas
10(j) Documents relating to the Frank's Nursery (d)
Sales, Inc. property in Hillside, Illinois
10(k) Documents relating to the Handy Dan (b)
Hardware, Inc. property in Hurst, Texas
10(l) Lease by and between the Partnership (e)
and Creative Paint and Wallpaper, Inc.
dated January 31, 1991
10(m) Lease by and between the Partnership and (e)
B & G, Inc., d/b/a Splash Pools and Spas,
dated January 17, 1991
10(n) Agreement of Purchase and Sale between (b)
Lucky Stores, Inc. and Winthrop Financial
Co., Inc. dated November 16, 1979
10(o) Documents relating to the National (f)
Super Markets, Inc. store in Chippewa
Falls, Wisconsin
10(p) Documents relating to the Wal-Mart Stores, (g)
Inc. property in Mexia, Texas
10(q) Documents relating to the Walgreen Co. (h)
property in University City, Missouri
16. Letter from Arthur Andersen LLP dated September (i)
19, 1996.
27. Financial Data Schedule 36
99. Supplementary Information required pursuant 37
to Section 9.4 of the Partnership Agreement
(a) Filed as an Exhibit to the Partnership's Annual Report on Form 10-K for
the year ended December 31 1994 and incorporated herein by reference.
(b) Filed as an exhibit to the Partnership's Registration Statement on Form
S-11, File No. 2-63216, and incorporated herein by reference.
34
<PAGE>
(c) Filed as exhibits to the Partnership's Current Report on Form 8-K dated
September 12, 1979, and incorporated herein by reference.
(d) Filed as exhibits to the Partnership's Current Report on Form 8-K dated
January 25, 1980, and incorporated herein by reference.
(e) Filed as an exhibit to the Partnership's Annual Report on Form 10-K dated
March 31,1992 and incorporated herein by reference.
(f) Filed as exhibits to the Partnership's Current Report on Form 8-K dated
May 30, 1980, and incorporated herein by reference.
(g) Filed as exhibits to the Partnership's Current Report on Form 8-K dated
November 14, 1980, and incorporated herein by reference.
(h) Filed as exhibits to the Partnership's Current Report on Form 8-K dated
September 12, 1979, and incorporated herein by reference.
(i) Incorporated by reference to the Partnership's Current Report on Form 8-K
dated September 23, 1996.
35
<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> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 769,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 9,040,000
<DEPRECIATION> (2,366,000)
<TOTAL-ASSETS> 7,618,000
<CURRENT-LIABILITIES> 0
<BONDS> 1,862,000
<COMMON> 0
0
0
<OTHER-SE> 5,734,000
<TOTAL-LIABILITY-AND-EQUITY> 7,618,000
<SALES> 0
<TOTAL-REVENUES> 1,167,000
<CGS> 0
<TOTAL-COSTS> 164,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 219,000
<INCOME-PRETAX> 747,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 747,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 747,000
<EPS-PRIMARY> 68.67
<EPS-DILUTED> 68.67
</TABLE>
<PAGE>
Exhibit 99
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
DECEMBER 31, 1997
Supplementary Information Required Pursuant to Section 9.4 of the Partnership
Agreement (Unaudited)
<TABLE>
<CAPTION>
Year Ended Three Months Ended
December 31, 1997 December 31, 1997
----------------- ------------------
<S> <C> <C>
1. Statement of Cash Available for Distribution:
Net Income $ 747,000 $ 156,000
Add: Depreciation and amortization charged to
income not affecting cash available for
distribution 101,000 25,000
Minimum lease payments received, net of
interest income earned, on leases
accounted for under the financing method 306,000 80,000
Less: Mortgage principal payments (280,000) (48,000)
Rent Receivable/Prepaid rent (43,000) (43,000)
Other non-cash income (13,000) (4,000)
Cash to Reserves (503,000) (166,000)
------------------ ------------------
Cash Available for Distribution $ 315,000 $ -
================== ==================
Distributions allocated to General
Partners $ -$-
================== ==================
Distributions allocated to Limited
Partners $ 315,000 $ -
================== ==================
</TABLE>
2. Fees and other compensation paid or accrued by the Partnership to the
General Partners, or their affiliates during the three months ended
December 31, 1997:
<TABLE>
<CAPTION>
Entity Receiving Compensation Form of Compensation Amount
----------------------------- -------------------- ------
<S> <C> <C>
Winthrop Management LLC Property Management Fees $ 4,000
General Partners Interest in Cash Available for Distribution $ -
WFC Realty Co., Inc.
(Initial Limited Partner) Interest in Cash Available for Distribution $ -
</TABLE>
