<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 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
--------------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Five Cambridge Center, Cambridge, MA 02142-1493
--------------------------------------- ------------------------------------
(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
--- ----
1 of 12
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 2000
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
<CAPTION>
Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
June 30, December 31,
2000 1999
--------- -------------
<S> <C> <C>
ASSETS
Real Estate Leased to Others:
Accounted for under the operating method,
at cost, net of accumulated depreciation of
$1,961 (2000) and $1,939 (1999) $ 3,689 $3,711
Accounted for under the operating method
and held for sale, net of accumulated depreciation
of $557 (1999) -- 344
Accounted for under the financing method 1,375 1,542
------- ------
5,064 5,597
Other Assets:
Cash and cash equivalents 1,917 1,275
Other assets, net of accumulated amortization of
$133 (2000) and $128 (1999) 37 113
------- ------
Total Assets $ 7,018 $6,985
======= ======
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage notes payable $ 685 $ 853
Accounts payable and accrued expenses 19 22
Distributions payable to partners 597 152
------- ------
Total Liabilities 1,301 1,027
------- ------
Partners' Capital:
Limited Partners -
Units of Limited Partnership Interest,
$1,000 stated value per Unit; authorized
issued and outstanding - 10,005 Units 5,816 6,075
General Partners' Deficit (99) (117)
------- ------
Total Partners' Capital 5,717 5,958
------- ------
Total Liabilities and Partners' Capital $ 7,018 $6,985
======= ======
</TABLE>
See notes to financial statements.
2 of 12
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 2000
Statements of Income (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
INCOME:
Rental income from real estate leases accounted
for under the operating method $ 151 $ 189 $ 407 $ 548
Interest on short-term investments 23 20 41 40
Interest income on real estate leases accounted
for under the financing method 41 49 84 101
Gain on sale of real estate 122 -- 122 --
-------- -------- -------- --------
Total income 337 258 654 689
-------- -------- -------- --------
EXPENSES:
Operating 16 13 24 23
Interest 19 37 41 76
Depreciation and amortization 14 20 27 44
Management fees 4 5 10 12
General and administrative 38 24 57 37
-------- -------- -------- --------
Total expenses 91 99 159 192
-------- -------- -------- --------
Net income $ 246 $ 159 $ 495 $ 497
======== ======== ======== ========
Net income allocated to general partners $ 20 $ 13 $ 40 $ 40
======== ======== ======== ========
Net income allocated to limited partners $ 226 $ 146 $ 455 $ 457
======== ======== ======== ========
Net income per Unit of Limited Partnership Interest $ 22.59 $ 14.59 $ 45.48 $ 45.68
======== ======== ======== ========
Distributions per Unit of Limited Partnership Interest $ 58.57 $ 16.69 $ 71.36 $ 40.88
======== ======== ======== ========
</TABLE>
See notes to financial statements.
3 of 12
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 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 40 455 495
Distributions (22) (714) (736)
------ ------ ------- -------
Balance - June 30, 2000 10,005 $ (99) $ 5,816 $ 5,717
====== ====== ======= =======
</TABLE>
See notes to financial statements.
4 of 12
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 2000
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
2000 1999
--------- ---------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 495 $ 497
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 22 32
Amortization 5 12
Gain on sale of property (122) -
Changes in assets and liabilities:
Decrease (increase) in other assets 71 (18)
(Decrease) increase in accounts payable
and accrued expenses (3) 12
------- --------
Net cash provided by operating activities 468 535
------- --------
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 167 150
------- --------
Cash provided by investing activities 633 150
------- --------
Cash Flows From Financing Activities:
Principal payments on mortgage notes (168) (164)
Cash distributions (291) (519)
------- --------
Cash used in financing activities (459) (683)
------- --------
Net increase in cash and cash equivalents 642 2
Cash and cash equivalents, beginning of period 1,275 1,713
------- --------
Cash and cash equivalents, end of period $ 1,917 $ 1,715
======= ========
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 41 $ 76
======= ========
Supplemental Disclosure of Non-Cash Financing Activities:
Accrued Distribution to Partners $ 597 $ 181
======= ========
</TABLE>
See notes to financial statements.
5 of 12
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 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. The balance sheet at
December 31, 1999, was derived from audited financial statements at
such date.
The results of operations for the three and six months ended June
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 $10,000 and $12,000 for
the six months ended June 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.
6 of 12
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 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 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. Accordingly, the lease will
expire in accordance with its terms effective October 31, 2000. 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 on January 1, 2001. The two properties
represent approximately 25% 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 $642,000 increase at June 30, 2000, as compared to
December 31, 1999. The Partnership's $468,000 of cash provided by
operating activities, $466,000 of net proceeds from the sale of the
University City, Missouri property and $167,000 of lease payments
received under financing leases (net of interest income) were
partially offset by $459,000 of cash used in financing activities.
Financing activities consisted of $168,000 of mortgage principal
payments and $291,000 of partner distributions. During the six
months ended June 30, 2000, the Partnership distributed $291,000 of
which $268,000 ($26.78 per unit) was distributed to the limited
partners and $23,000 was distributed to the general partners. (The
distributions paid during the six months ended June 30, 2000
included $152,000 of distributions accrued as of December 31, 1999,
of
7 of 12
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 2000
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
(CONTINUED)
Liquidity and Capital Resources (Continued)
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 June
30, 2000, the Partnership recorded an accrued distribution of
$597,000 (which will be paid in the third quarter), consisted of
distributions of $586,000 ($58.57 per unit) to the limited partners
and $11,000 to the general partners. The accrued distributions
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 six
months ended June 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 decreased by $2,000 for the six months
ended June 30, 2000, as compared to the comparable period in 1999,
due to a decrease in income of $35,000 which was partially offset
by a decrease in expenses of $33,000.
The decrease in income was due to a decrease in interest income on
leases accounted for under the financing method of $17,000 and a
decrease in rental income of $141,000, which was partially offset
by the gain from the sale of the University City, Missouri property
of $122,000 and an increase in interest income on short-term
investments of $1,000. Rental income decreased due to the
expiration of the Walgreen Co. lease in 1999. Interest income on
leases accounted for under the financing method decreased due to
the amortization of leases accounted for under the financing
method. Rental income from the remaining properties remained
relatively constant.
Expenses declined by $33,000 primarily due to reductions in
interest expense of $35,000 resulting from the satisfaction of the
J.C. Penney note in the amount of $376,000 in 1999 and the
amortization of principal balances and depreciation and
amortization expense of $17,000 primarily due to certain assets
becoming fully depreciated and amortized. General and
administrative expenses increased by $20,000 primarily due to an
increase in legal fees.
8 of 12
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 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
June 30, 2000.
9 of 12
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 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
------------------------------------
Michael L. Ashner
Chief Executive Officer and Director
BY: /s/ Thomas C. Staples
------------------------------------
Thomas C. Staples
Chief Financial Officer
Dated: August 14, 2000
10 of 12
<PAGE>
WINTHROP PARTNERS 79 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 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
11 of 12
