<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 September 30, 1996
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 0-9684
Winthrop Partners 80 Limited Partnership
(Exact name of small business issuer
as specified in its charter)
Massachusetts 04-2693546
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One International Place, Boston, Massachusetts 02110
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (617) 330-8600
Indicate by check mark whether Registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No_____
1 of 12
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WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1996
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
<CAPTION>
Balance Sheets (Unaudited)
September 30, December 31,
(In Thousands, Except Unit Data) 1996 1995
-------------------- ---------------------
<S> <C> <C>
Assets
Real Estate Leased to Others:
Accounted for under the operating method,
at cost, net of accumulated depreciation of
$841 (1996) and $885 (1995) $ 2,533 $ 3,261
Accounted for under the financing method 4,763 5,020
-------------------- ---------------------
7,296 8,281
Other Assets:
Cash and cash equivalents 935 795
Other, net of accumulated amortization of
$16 (1996) and $14 (1995) 8 106
-------------------- ---------------------
Total Assets $ 8,239 $ 9,182
==================== =====================
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 113 $ 45
Distributions payable to partners 341 366
-------------------- ---------------------
Total Liabilities 454 411
-------------------- ---------------------
Partners Capital:
Limited Partners -
Units of Limited Partnership Interest,
$500 stated value per Unit; authorized - 50,000 Units;
issued and outstanding - 45,646 Units 8,363 9,281
General Partners (Deficit) (578) (510)
-------------------- ---------------------
Total Partners' Capital 7,785 8,771
-------------------- ---------------------
Total Liabilities and Partners' Capital $ 8,239 $ 9,182
==================== =====================
</TABLE>
See notes to financial statements.
2 of 12
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1996
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,
1996 1995 1996 1995
---------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Income:
Rental income from real estate leases accounted
for under the operating method $ 154 $ 155 $ 518 $ 659
Interest on short-term investments 12 14 31 38
Interest income on real estate leases accounted
for under the financing method 119 126 362 385
Gain on sale of property - - 57 -
Other income - 23 - 23
---------- ----------- ---------- ------------
285 318 968 1,105
---------- ----------- ---------- ------------
Expenses:
Loss due to impairment of real estate - - 600 -
Depreciation and amortization 12 23 46 69
Management fees 5 5 17 19
General and administrative 16 6 56 32
---------- ----------- ---------- ------------
33 34 719 120
---------- ----------- ---------- ------------
Net income $ 252 $ 284 $ 249 $ 985
========== =========== ========== ============
Net income allocated to General Partners $ 20 $ 23 $ 20 $ 79
========== =========== ========== ============
Net income allocated to Limited Partners $ 232 $ 261 $ 229 $ 906
========== =========== ========== ============
Net Income per Unit of Limited Partnership
Interest $ 5.08$ 5.72 $ 5.02 $ 19.85
========== =========== ========== ============
Distributions per Unit of Limited Partnership Interest $ 6.86 $ 7.51 $ 25.13 $ 24.01
========== =========== ========== ============
</TABLE>
See notes to financial statements.
3 of 12
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Statement of Partners' Capital (Unaudited)
(In Thousands, Except Unit Data) Units of
Limited General Limited
Partnership Partners' Partners' Total
Interest Deficit Capital Capital
----------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Balance - January 1, 1996 45,646 $ (510) $ 9,281 $ 8,771
Distributions (88) (1,147) (1,235)
Net income 20 229 249
----------------- ------------------- ------------------- --------------------
Balance - September 30, 1996 45,646 $ (578) $ 8,363 $ 7,785
================= =================== =================== ====================
</TABLE>
See notes to financial statements.
4 of 12
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1996
Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended
(In Thousands) September 30, September 30,
1996 1995
-------------------- ---------------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 249 $ 985
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 46 68
Loss due to impairment of real estate 600 -
Minimum lease payments received, net of interest income
earned, on leases accounted for under the financing method 257 233
Gain on sale of property (57) -
Changes in assets and liabilities:
Decrease (increase) in other assets 96 (57)
Increase (decrease) in accounts payable
and accrued expenses 68 (33)
-------------------- ---------------------
Net cash provided by operating activities 1,259 1,196
-------------------- ---------------------
Cash Flows From Investing Activities:
Proceeds from sale of property 141 -
-------------------- ---------------------
Cash provided by investing activities 141 -
-------------------- ---------------------
Cash Flows From Financing Activities:
Cash distributions (1,260) (1,086)
-------------------- ---------------------
Cash used in financing activities (1,260) (1,086)
-------------------- ---------------------
Net increase in cash and cash equivalents 140 110
Cash and cash equivalents, beginning of period 795 728
-------------------- ---------------------
Cash and cash equivalents, end of period $ 935 $ 838
==================== =====================
</TABLE>
See notes to financial statements.
5 of 12
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 1996
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. General
The accompanying financial statements, footnotes and discussions
should be read in conjunction with the financial statements,
related footnotes and discussions contained in the Partnership's
annual report on Form 10-K for the year ended December 31, 1995.
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, except as described
in Note 4. Certain amounts have been reclassified to conform to
the September 30, 1996 presentation. The balance sheet at December
31, 1995 was derived from audited financial statements at such
date.
The results of operations for the three and nine months ended
September 30, 1996 and 1995 are not necessarily indicative of the
results to be expected for the full year.
2. Accounting Change
On January 1, 1996, the Partnership adopted 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", which requires impairment losses to be recognized
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 properties located in Mt.
Pleasant, Iowa ($300,000), Nebraska City, Nebraska ($200,000) and
two Ohio properties leased to Dairymart ($100,000) was other than
temporary and that recovery of their carrying values was not
likely. Accordingly, a loss for impairment of value of $600,000
was recognized by the Partnership to reduce the property's
carrying value to an amount equal to its estimated fair value.
3. Related Party Transactions
Management fees paid by the Partnership to an affiliate of the
Managing General Partner, totaled $17,000 and $19,000 during the
nine months ended September 30, 1996 and 1995, respectively.
4. Sale of Property
In January 1996, the Partnership sold its St. Clair Shores,
Michigan property for $141,000, resulting in a gain of $57,000.
6 of 12
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WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 1996
Item 2. Management's Discussion and Analysis or Plan of Operation
This Item should be read in conjunction with the financial
statements and other items contained elsewhere in the report.
Liquidity and Capital Resources
Each of the Partnership's properties (except Ashtabula, Ohio) is
leased to a single tenant pursuant to triple net leases with
remaining lease terms, subject to extensions, ranging between nine
months and fifty-one months. 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 $140,000 increase at September 30, 1996 as compared
to December 31, 1995. The Partnership's $1,259,000 of cash
provided by operating activities and $141,000 provided from the
sale of its St. Clair Shores property (investing activities) was
only partially offset by $1,260,000 of cash used for partner
distributions (financing activities).
The Partnership has continued to make quarterly distributions to
its partners from operating revenue since inception. Based on the
projected revenue and expenses of the Partnership, it is expected
that quarterly distributions will continue to be made to its
partners in the foreseeable future.
The Partnership requires cash primarily to pay management fees and
general and administrative expenses. In addition, the Partnership
is responsible for operating expenses, such as real estate taxes,
insurance and utility expenses associated with the vacant
Ashtabula, Ohio property and would be responsible for similar
expenses if other properties were to become vacant upon the
expiration of leases. These expenses for the vacant Ashtabula,
Ohio property are not significant. The Partnership's rental and
interest income was sufficient for the nine months ended September
30, 1996, and is expected to be sufficient in future periods, to
pay all of the Partnership's operating expenses as well as to
provide for cash distributions to the partners from operations.
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. In the future, the
Partnership expects inflation and changing prices to affect the
Partnership's revenues. With respect to the Motorola and the three
Dairy Mart leases, the remaining terms of the original leases
expire in 1997 and 1998. The Duckwall lease, which expires in
2000, provides the tenant with the option to terminate the lease
in 1998. If a tenant fails to exercise its renewal option,
exercises its option to terminate its lease early or does not
renew at the expiration of the lease term, the Partnership
7 of 12
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 1996
Item 2. Management's Discussion and Analysis or Plan of Operation
(Continued)
Liquidity and Capital Resources (continued)
will be competing for new tenants in the then current rental
markets which may not be able to support terms as favorable as
those contained in the original lease options or it may seek to
sell the property. 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 Managing General Partner is presently conducting preliminary
discussions with the Partnership's Creston, Ohio property pursuant
to which the tenant would acquire the property. No agreement with
such tenant has been reached, nor can there be any assurance that
if an agreement is reached a sale will be consummated or upon what
terms.
The Partnership is currently negotiating with the owner of the
parcel of land adjacent to its Mount Pleasant, Iowa property. It
is anticipated that the Partnership will acquire the parcel of
land, which currently contains a parking lot used in part by the
Partnership's tenant, for approximately $25,000.
The Partnership invests its working capital reserves in a money
market mutual fund.
Results of Operations
Net income decreased by $736,000 for the nine months ended
September 30, 1996, as compared to 1995, due to a decrease in
revenues and a $600,000 loss due to the impairment of value
recorded on certain of the Partnership's properties (Mt. Pleasant,
Iowa ($300,000), Nebraska City, Nebraska ($200,000) and two Ohio
properties leased to Dairymart ($100,000)), during the 1996
period. Net income decreased $32,000 for the three months ended
September 30, 1996 as compared to 1995 due to a decrease in
revenues.
Revenues decreased by $137,000 for the nine months ended September
30, 1996, as compared to 1995, primarily due to a decrease of
$141,000 in rental income which was partially offset by a $57,000
gain on the sale of the Partnership's St. Clair Shores property.
With respect to the remaining properties, rental income decreased
by approximately $127,000, primarily due to the elimination of
percentage rents in 1996 with respect to the Wal-Mart Bowling
Green lease. Wal-Mart, which vacated the Bowling Green property
during 1995, continues to pay rent, and is attempting to sublet
the property.
With respect to the remaining properties, except for the loss due
to impairment of value, total expenses remained relatively
constant during the nine months ended September 30, 1996, as
compared to 1995. General and administrative expenses increased
$24,000 due to an increase in professional fees and related costs
while depreciation and amortization expense decreased $23,000,
partially due to the impairment of value recorded on the above
mentioned properties.
8 of 12
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 1996
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 of Form 8-K:
On September 23, 1996 a current report on Form 8-K was
filed with respect to the Registrant's change of
Independent Auditors.
9 of 12
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1996
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BY: ONE WINTHROP PROPERTIES, INC.
Managing General Partner
BY: /s/ Michael L. Ashner
Michael L. Ashner
Chief Executive Officer and Director
BY: /s/ Edward V. Williams
Edward V. Williams
Chief Financial Officer
Dated: November 4, 1996
10 of 12
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
SEPTEMBER 30, 1996
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
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
SEPTEMBER 30, 1996
Supplementary Information Required Pursuant to Section 9.4 of the Partnership
Agreement
1. Statement of Cash Available for Distribution for the three months ended
September 30, 1996:
Net income $ 252,000
Add: Depreciation and amortization charges to income not
affecting cash available for distribution 12,000
Minimum lease payments received, net of interest
income earned, on leases accounted for under the
financing method 87,000
Prepaid rent (10,000)
---------
Cash Available for Distribution $ 341,000
=========
Distributions allocated to General Partners $ 27,000
=========
Distributions allocated to Limited Partners $ 314,000
=========
2. Fees and other compensation paid or accrued by the Partnership to the
General Partners, or their affiliates, during the three months ended September
30, 1996:
Entity Receiving Form of
Compensation Compensation Amount
- ---------------- ------------ ------
Winthrop
Management Property Management Fees $ 5,000
General Partners Interest in Cash Available for Distribution $27,000
WFC Realty Co., Inc.
(Initial Limited Partner) Interest in Cash Available for Distribution $ 1,000
12 of 12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Winthrop
Partners 80 Limited Partnership and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 935,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 8,136,000
<DEPRECIATION> (840,000)
<TOTAL-ASSETS> 8,239,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 7,785,000
<TOTAL-LIABILITY-AND-EQUITY> 8,239,000
<SALES> 0
<TOTAL-REVENUES> 937,000
<CGS> 0
<TOTAL-COSTS> 63,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 249,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 249,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 249,000
<EPS-PRIMARY> 5.02
<EPS-DILUTED> 5.02
</TABLE>
