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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 September 30, 2000
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
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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
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 2000
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS, EXCEPT UNIT DATA)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
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<S> <C> <C>
ASSETS
Real Estate Leased to Others:
Accounted for under the operating method,
at cost, net of accumulated depreciation of
$1,977 (2000) and $1,939 (1999) $ 4,365 $ 3,711
Accounted for under the operating method
and held for sale, net of accumulated depreciation
of $557 - 344
Accounted for under the financing method 639 1,542
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5,004 5,597
Other Assets:
Cash and cash equivalents 988 1,275
Other assets, net of accumulated amortization of
$105 (2000) and $98 (1999) 30 113
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Total Assets $ 6,022 $ 6,985
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LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage notes payable $ 112 $ 853
Accounts payable and accrued expenses 23 22
Distributions payable to partners 132 152
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Total Liabilities 267 1,027
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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 5,851 6,075
General Partners' Deficit (96) (117)
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Total Partners' Capital 5,755 5,958
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Total Liabilities and Partners' Capital $ 6,022 $ 6,985
========= =========
</TABLE>
See notes to financial statements.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 2000
STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT UNIT DATA)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
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<S> <C> <C> <C> <C>
INCOME:
Rental income from real estate leases accounted
for under the operating method $ 209 $ 151 $ 616 $ 699
Interest on short-term investments 25 20 66 60
Interest income on real estate leases accounted
for under the financing method 23 47 107 148
Gain on sale of property - - 122 -
Other income - 4 - 4
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Total income 257 222 911 911
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EXPENSES:
Operating 11 8 35 31
Interest 35 31 76 107
Depreciation and amortization 18 21 45 65
Management fees 4 4 14 16
General and administrative 19 19 76 56
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Total expenses 87 83 246 275
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Net income $ 170 $ 139 $ 665 $ 636
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Net income allocated to general partners $ 13 $ 11 $ 53 $ 51
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Net income allocated to limited partners $ 157 $ 128 $ 612 $ 585
========== =========== ========== ==========
Net income per Unit of Limited Partnership Interest $ 15.69 $ 12.79 $ 61.17 $ 58.47
========== =========== ========== ==========
Distributions per Unit of Limited Partnership Interest $ 12.20 $ 13.99 $ 83.56 $ 54.87
========== =========== ========== ==========
</TABLE>
See notes to financial statements.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 2000
STATEMENT OF PARTNERS' CAPITAL (UNAUDITED)
(IN THOUSANDS, EXCEPT UNIT DATA)
<TABLE>
<CAPTION>
UNITS OF
LIMITED GENERAL LIMITED TOTAL
PARTNERSHIP PARTNERS' PARTNERS' PARTNERS'
INTEREST DEFICIT CAPITAL CAPITAL
------------------ ------------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Balance - January 1, 2000 10,005 $ (117) $ 6,075 $ 5,958
Net income 53 612 665
Distributions (32) (836) (868)
------------------ ------------------- ------------------ -------------------
Balance - September 30, 2000 10,005 $ (96) $ 5,851 $ 5,755
================== =================== ================== ===================
</TABLE>
See notes to financial statements.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 2000
STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999
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<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 665 $ 636
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 38 49
Amortization 7 16
Gain on sale of property (122) -
Changes in assets and liabilities:
Decrease in other assets 76 38
Increase (decrease) in accounts payable
and accrued expenses 1 (5)
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Net cash provided by operating activities 665 734
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Cash Flows From Investing Activities:
Net proceeds from sale of property 466 -
Minimum lease payments received, net of interest income
earned, on leases accounted for under the financing method 211 228
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Cash provided by investing activities 677 228
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Cash Flows From Financing Activities:
Repayment of mortgage note (561) (376)
Principal payments on mortgage notes (180) (249)
Cash distributions (888) (700)
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Cash used in financing activities (1,629) (1,325)
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Net (decrease) in cash and cash equivalents (287) (363)
Cash and cash equivalents, beginning of period 1,275 1,713
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Cash and cash equivalents, end of period $ 988 $ 1,350
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Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 76 $ 110
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Supplemental Disclosure of Non-Cash Financing Activities:
Accrued distribution to partners $ 132 $ 152
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</TABLE>
See notes to financial statements.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 2000
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, 1999.
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 September 30, 2000 presentation. The balance sheet at
December 31, 1999 was derived from audited financial statements at such
date.
The results of operations for the three and nine months ended September
30, 2000 and 1999 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 $14,000 and $16,000 for the nine
months ended September 30, 2000 and 1999, respectively.
3. SALE OF PROPERTY
On June 9, 2000, the Partnership sold the University City, Missouri
property to an unaffiliated third party for $466,000 (net of closing
costs $47,000). The Partnership realized a gain on sale of
approximately $122,000.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 2000
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
The Partnership's remaining seven properties are leased to one or more
tenants pursuant to net or modified net leases with remaining lease
terms, subject to extensions, ranging between a few months and five
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. On June 9,
2000, the Partnership sold the vacant University City, Missouri
property to an unaffiliated third party for $466,000 (net of closing
costs of $47,000). The Partnership realized a gain of approximately
$122,000. On May 13, 1999 Toys "R" Us, Inc. exercised lease extensions
for an additional five years on both locations effective August 1,
2000, at the then current rental rate. Accordingly, these leases will
now expire on July 31, 2005. These leases were previously accounted for
utilizing the financing method, however, the extensions do not meet the
criteria to be classified as capital leases utilizing the financing
method and therefore will be recorded as operating leases. On October
29, 1999, the Partnership received a notice from Walmart Stores that it
has elected not to exercise its option to extend its lease at the
Partnership's Mexia, Texas property. In September 2000, Walmart Stores
extended their lease for six more months, at double the then current
rental rate. Accordingly, the lease will now expire on April 30, 2001.
If the Partnership cannot sell the property or find a new tenant prior
to such date, the Partnership will be responsible for all costs
associated with the property. In addition, the lease at the Hurst,
Texas property expires in January 2001. The two properties represent
approximately 28% of minimum rental receipts during 2000. On March 20,
2000, Lucky Stores, Inc. exercised the first renewal option to extend
its lease to June 30, 2005 on the Cedar Rapids, Iowa property, at the
then current rental rate.
The level of liquidity based on cash and cash equivalents experienced a
$287,000 decrease at September 30, 2000, as compared to December 31,
1999. The Partnership's $665,000 of cash provided by operating
activities, $466,000 of net proceeds from the sale of the University
City, Missouri property and $211,000 of lease payments received under
financing leases (net of interest income) were more than offset by
$1,629,000 of cash used in financing activities. Financing activities
consisted of $180,000 of mortgage principal payments, $561,000 to repay
a mortgage note and $888,000 of partner distributions. Distributions of
$854,000 ($85.36 per unit) were distributed to the limited partners and
$34,000 was distributed to the general partners. The distributions paid
during the nine months ended September 30,
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 2000
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (CONTINUED)
Liquidity and Capital Resources (Continued)
2000 included $152,000 of distributions accrued as of December 31,
1999, of which $140,000 was paid to the limited partners ($13.99 per
unit) and $12,000 was paid to the general partner. In addition, at
September 30, 2000, the Partnership recorded an accrued distribution of
$132,000 (which will be paid in the fourth quarter), $122,000 ($12.19
per unit) to the limited partners and $10,000 to the general partners.
The distributions paid in the third quarter included $466,000 of net
proceeds from the sale of University City, Missouri property.
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 nine months ended September 30,
2000, and is expected to be sufficient until the current leases expire,
to pay the Partnership's operating expenses and debt service. Upon
expiration of tenant leases, the Partnership will be required to either
extend the leases, 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.
Results of Operations
The Registrant's net income increased by $29,000 for the nine months
ended September 30, 2000, as compared to the comparable period in 1999,
due to a decrease in expenses of $29,000 while total income remained
constant.
Total income remained constant as the decreases in income on leases
accounted for under the financing method of $41,000 and rental income
of $83,000 were substantially offset by the gain from the sale of the
University City, Missouri property of $122,000. Rental income decreased
due to the 1999 expiration of the Walgreen Co. lease at the University
City property, which was partially offset by increases in rental income
and percentage rental income.
Expenses declined by $29,000 primarily due to decreases in interest
expense of $31,000 and in depreciation and amortization expenses of
$20,000. Interest expense declined due to the satisfaction of the
mortgage notes encumbering the Batavia, New York and Hurst, Texas
properties in August 1999 and September 2000, respectively, and the
amortization of mortgage principal balances. Depreciation and
amortization expenses decreased primarily due to certain assets
becoming fully depreciated. Partially offsetting these decreases was an
increase in general and administrative expenses of $20,000, primarily
due to an increase in legal fees.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 2000
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 period ended
September 30, 2000.
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 2000
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
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Michael L. Ashner
Chief Executive Officer and Director
BY: /s/ Thomas C. Staples
---------------------------------------
Thomas C. Staples
Chief Financial Officer
Dated: October 24, 2000
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WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 2000
EXHIBIT INDEX
Exhibit Page No.
27. Financial Data Schedule -
99. Supplementary Information Required Pursuant to
Section 9.4 of the Partnership Agreement. 12
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