<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 March 31, 1998
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
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(Exact name of small business issuer as specified in its charter)
Massachusetts 04-2654152
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Five Cambridge Center, Cambridge, MA 02142-1493
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (617) 234-3000
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[ ]
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1998
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
March 31, December 31,
1998 1997
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Assets
- ------
Real Estate Leased to Others:
Accounted for under the operating method,
at cost, net of accumulated depreciation of
$2,388 (1998) and $2,366 (1997) ................. $ 4,142 $ 4,164
Accounted for under the financing method ............. 2,429 2,510
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6,571 6,674
Other Assets:
Cash and cash equivalents ............................ 1,144 769
Other assets, net of accumulated amortization
of $114 (1998) and $111 (1997) .................. 152 175
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Total Assets ................................ $ 7,867 $ 7,618
======= =======
Liabilities and Partners' Capital
Liabilities:
Mortgage notes payable ............................... $ 1,787 $ 1,862
Accounts payable and accrued expenses ................ 28 22
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Total Liabilities ........................... 1,815 1,884
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Partners' Capital:
Limited Partners -
Units of Limited Partnership Interest,
$1,000 stated value per Unit; authorized
issued and outstanding - 10,005 Units ............. 6,170 5,877
General Partners' Deficit ............................ (118) (143)
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Total Partners' Capital ..................... 6,052 5,734
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Total Liabilities and Partners' Capital ..... $ 7,867 $ 7,618
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See notes to financial statements.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1998
Statements of Income (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
For The Three Months Ended
March 31, March 31,
1998 1997
---- ----
<S> <C> <C>
Income:
Rental income from real estate leases accounted
for under the operating method ........................ $333 $242
Interest on short-term investments ......................... 11 6
Interest income on real estate leases accounted
for under the financing method ........................ 80 88
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Total income ...................................... 424 336
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Expenses:
Operating .................................................. 8 6
Interest ................................................... 50 57
Depreciation and amortization .............................. 25 25
Management fees ............................................ 7 6
General and administrative ................................. 16 18
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Total expenses .................................... 106 112
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Net income ................................................. $318 $224
======= =======
Net income allocated to general partners ................... $ 25 $ 18
======= =======
Net income allocated to limited partners ................... $293 $206
======= =======
Net income per Unit of Limited Partnership Interest ........ $29.29 $20.59
======= =======
Distributions per Unit of Limited Partnership Interest ..... $-- $18.09
======= =======
</TABLE>
See notes to financial statements.
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1998
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, 1998 ....... 10,005 $ (143) $5,877 $5,734
Net income ................... 25 293 318
------ ------ ------ ------
Balance - March 31, 1998 ........ 10,005 $ (118) $6,170 $6,052
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See notes to financial statements.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1998
Statements of Cash Flows (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
For The Three Months Ended
March 31, March 31,
1998 1997
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<S> <C> <C>
Cash Flows From Operating Activities:
Net income ....................................................... $ 318 $ 224
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation ................................................ 22 22
Amortization ................................................ 3 3
Changes in assets and liabilities:
Decrease in other assets .................................... 20 98
Increase (decrease) in accounts payable
and accrued expenses ...................................... 6 (7)
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Net cash provided by operating activities ................... 369 340
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Cash Flows From Investing Activities:
Minimum lease payments received, net of interest income
earned, on leases accounted for under the financing method 81 73
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Cash provided by investing activities ....................... 81 73
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Cash Flows From Financing Activities:
Principal payments on mortgage notes ........................ (75) (67)
Cash distributions .......................................... -- (205)
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Cash used in financing activities ........................... (75) (272)
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Net increase in cash and cash equivalents ........................ 375 141
Cash and cash equivalents, beginning of period ................... 769 491
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Cash and cash equivalents, end of period ......................... $ 1,144 $ 632
======= =======
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest ...................................... $ 50 $ 57
======= =======
Supplemental Disclosure of Non-Cash Financing Activities:
Accrued Distribution to Partners ............................ $ -- $ 181
======= =======
</TABLE>
See notes to financial statements.
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1998
NOTES TO FINANCIAL STATEMENTS
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, 1997.
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 March 31, 1998 presentation. The balance sheet at December 31, 1997,
was derived from audited financial statements at such date.
The results of operations for the three months ended March 31, 1998 and
1997, 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 $7,000 and $6,000 during the three
months ended March 31, 1998 and 1997, respectively.
3. Mortgage Note Payable
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, which was further extended until May 15, 1998. The Partnership is
currently negotiating with the lender to renew the note, at a lower
interest rate, until August 31, 1999 (expiration date of the tenant's
lease). If the Partnership is unable to extend or refinance the mortgage,
the Managing General Partner anticipates that the Partnership's cash
reserves will be utilized to satisfy the note.
4. Contract for Sale of Property
On March 19, 1998, the Partnership entered into a contract to sell its
Chippewa Falls, WI property to the tenant of the property for $975,000.
The sale, if consummated, is expected to close during May 1998. If the
sale is consummated, the Partnership will recognize a gain for financial
reporting purposes.
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1998
Item 2. Management's Discussion and Analysis or Plan of Operations
The matters discussed in this Form 10-QSB 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-QSB and the other filings with the Securities and Exchange
Commission made by the Partnership from time to time. The discussion
of the Partnership's liquidity, capital resources 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 operations. 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.
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 15 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 $375,000 increase at March 31, 1998, as compared to
December 31, 1997. The Partnership's $369,000 of cash provided by
operating activities along with $81,000 of cash provided by
investing activities were only partially offset by $75,000 of cash
used for mortgage principal payments (financing activities). At
March 31, 1998, the Partnership had approximately $1,144,000 in cash
and cash equivalents which has been invested primarily in money
market mutual funds.
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
three months ended March 31, 1998, 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.
The Partnership maintains cash reserves to enable it to make
potential capital improvements required in connection with the
re-letting of the properties.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1998
Item 2. Management's Discussion and Analysis or Plan of Operation (Continued)
Liquidity and Capital Resources (Continued)
During 1997, the Managing General Partner ceased making
distributions in light of the J.C. Penney lease expiration on August
31, 1999 and the related $419,000 balloon payment due on the
mortgage note secured by the J.C. Penney property. The mortgage note
matured on February 1, 1998, and was extended until May 15, 1998.
The Managing General Partner is currently negotiating with the
lender to renew the note (at a lower interest rate) until August 31,
1999. If the Partnership is unable to extend or refinance the
mortgage, the Managing General Partner anticipates that the
Partnership's cash reserves will be utilized to satisfy the note.
On March 19, 1998, the Partnership entered into a contract to sell
its Chippewa Falls, WI property to the tenant of the property for
$975,000. The sale, if consummated, is expected to close during May
1998. If the sale is consummated, the Partnership will realize
approximately $940,000 in net proceeds and recognize a gain for
financial reporting purposes.
Results of Operations
Net income increased by $94,000 for the three months ended March 31,
1998, as compared to 1997, primarily due to the receipt of $163,000
of percentage rents in 1998, as compared to $72,000 in 1997. Other
items of income and expense remained relatively constant.
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1998
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
March 31, 1998.
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1998
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.
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
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: May 5, 1998
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1998
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. 16
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Exhibit 99
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1998
Supplementary Information Required Pursuant to Section 9.4 of the Partnership
Agreement
1. Statement of Cash Available for Distribution for the three months
ended March 31, 1998:
Net income $ 318,000
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 81,000
Less: Mortgage principal payments (75,000)
Cash to Reserves (349,000)
---------
Cash Available for Distribution $ -
=========
2. Fees and other compensation paid or accrued by the Partnership to
the General Partners, or their affiliates, during the three months
ended March 31, 1998:
Entity Receiving Form of
Compensation Compensation Amount
------------ ------------ ------
Winthrop
Management LLC Property Management Fees $ 7,000
WFC Realty Co., Inc. Interest in Cash Available
(Initial Limited Partner) for Distribution $ -
<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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,144,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 8,959,000
<DEPRECIATION> (2,388,000)
<TOTAL-ASSETS> 7,867,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 6,052,000
<TOTAL-LIABILITY-AND-EQUITY> 7,867,000
<SALES> 0
<TOTAL-REVENUES> 413,000
<CGS> 0
<TOTAL-COSTS> 40,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 50,000
<INCOME-PRETAX> 318,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 318,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 318,000
<EPS-PRIMARY> 29.29
<EPS-DILUTED> 29.29
</TABLE>
