As filed with the Securities and Exchange Commission on February 28, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) February 15, 1996
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Its Charter)
Massachusetts
(State or Other Jurisdiction of organization)
0-9684 04-2693546
(Commission File Number) (I.R.S. Employer Identification No.)
One International Place, Boston, Massachusetts 02110
(Address of Principal Executive Offices) (Zip Code)
(617) 330-8600
(Registrant's Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
Pursuant to the terms of Registrant's partnership
agreement, Registrant is mailing to its limited partners its
financial statements for the year ended December 31, 1995.
Item 7. Financial Statements, Pro Forma Financial Statements
and Exhibits.
(c) Exhibits.
19. Letter to Limited Partners dated February
14, 1996
SIGNATURES
Pursuant to the requirement of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
WINTHROP PARTNERS 80 LIMITED
PARTNERSHIP
By: One Winthrop Properties, Inc.,
Managing General Partner
Date: March 1, 1996 By:/s/_ Carol C.J. Mills___
Carol C.J. Mills
Vice President
To the Limited Partners of
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP:
Enclosed is your distribution check for the quarter ended December 31, 1995 (the
"Fourth Quarter"). This Report describes the activities of WINTHROP PARTNERS 80
LIMITED PARTNERSHIP, summarizes the results achieved by the Partnership through
1995 and contains its audited financial statements for the year ended December
31, 1995.
The Partnership has to date sold eight properties or 41% of its original assets,
based on acquisition cost. The Partnership continues to own ten properties of
which nine are leased to various tenants and one is vacant. All lease payments
due to the Partnership through year-end 1995 were current.
Cash distributions derived from rental income in 1995 resulted in an annual
return on your remaining investment of approximately 9.4%. This return compares
favorably to yields available from other similar investment opportunities. The
cash distributions provided by the Partnership since its inception in July 1980
through 1995 are summarized on Page 3 of this Report. The Partnership's cash
reserves are approximately $850,000 as of December 31, 1995.
Cash Distribution/State Withholding Tax Requirements
The Partnership's net cash flow generated in the Fourth Quarter was $7.33 per
unit. However, the actual amount distributed will be $7.30 per unit for
individuals who are not Nebraska residents as a result of the withholding
requirements of Nebraska. To ensure the collection of state income taxes,
several states now require that partnerships, rather than the limited partners,
pay withholding tax on a partnership's share of income and/or distributions
earned in those states. Winthrop Partners 80 must pay withholding tax for 1995
to Nebraska because the Partnership owns properties that generated income in
that state. Previous quarterly distributions have been reduced by the state
withholding requirements of Nebraska. Cash distributions will continue to be
reduced by such withholding requirements. Please consult your tax advisor or the
Department of Taxation in Nebraska regarding any filings a limited partner needs
to make, and the possibility of obtaining a tax refund.
For limited partners who elected the monthly method of distribution, the
enclosed check is one-third of the quarterly distribution. Your second and third
monthly installments will be mailed to you in 30 and 60 days, respectively.
Please note that your share of the Partnership's cash distribution for 1995 is
not taxable in and of itself. The amount of passive income and other items
necessary to complete your 1995 income tax returns are reported on your Schedule
K-1 which will be distributed to you by the end of February.
Properties Sold
1. NCNB, Greenville, SC. This property was sold in 1993 with the proceeds
distributed to limited partners in 1993. The cash-on cash return
provided by the property during its holding period was approximately
5.3% per annum, taking into account the quarterly distributions
attributable to the property and the loss of capital incurred on sale.
The Partnership's original investment in this property represented
approximately 4% of the initial offering proceeds.
2. Dairy Mart, Berkley, MI. This property was sold in 1993 with the
proceeds distributed to limited partners in 1993. The cash-on cash
return provided by the property during its holding period was
approximately 7.2% per annum, taking into account the quarterly
distributions attributable to the property and the return of capital
upon sale. The Partnership's original investment in this property
represented approximately 1% of the initial offering proceeds.
3. NCNB, Anderson, SC. This property was sold in 1992 with the proceeds
distributed to limited partners in 1992. The cash-on cash return
provided by the property during its holding period was approximately 7%
per annum, taking into account the quarterly distributions attributable
to the property and the return of capital upon sale. The Partnership's
original investment in this property represented approximately 1.8% of
the initial offering proceeds.
4. NCNB, Beaufort, SC. This property was sold in 1992 with the proceeds
distributed to limited partners in 1992. The cash-on cash return
provided by the property during its holding period was approximately 6%
per annum, taking into account the quarterly distributions attributable
to the property and the return of capital upon sale. The Partnership's
original investment in this property represented approximately 8.9% of
the initial offering proceeds.
<PAGE>
5. NCNB, Johnston, SC. This property was sold in 1991 with the proceeds
distributed to limited partners in 1991. The cash-on cash return
provided by the property during its holding period was approximately 3%
per annum, taking into account the quarterly distributions attributable
to the property and the loss of capital incurred on sale. The
Partnership's original investment in this property represented
approximately 1.2% of the initial offering proceeds.
6. Electric Power Research Institute, Charlotte, NC. This property was
sold in 1991 with the proceeds distributed to limited partners in 1991.
The cash-on cash return provided by the property during its holding
period was approximately 11% per annum, taking into account the
quarterly distributions attributable to the property and the profit
incurred on sale. The Partnership's original investment in this
property represented approximately 20.5% of the initial offering
proceeds.
7. Circuit City, Gaithersburg, MD. This property was sold in 1989 with the
proceeds distributed to limited partners in 1989. The cash-on cash
return provided by the property during its holding period was
approximately 19% per annum, taking into account the quarterly
distributions attributable to the property and the profit incurred on
sale. The Partnership's original investment in this property
represented approximately 2.5% of the Partnership's initial offering
proceeds.
8. Dairy Mart, St. Clair Shores, MI. The property was sold in January
1996 with the sale proceeds of approximately $3 per unit, to be
distributed to limited partners with the first quarter 1996
distribution. The cash-on-cash return provided by the property during
its holding period was approximately 8.12% per annum, taking into
account the quarterly distributions attributable to the property and
the return of capital upon sale. The Partnership's original investment
in this property represented less than 1% of the initial offering
proceeds. The sale price of $140,000 is less than the original
purchase price of $173,680. The property was sold to Dairy Mart's
sublet tenant. The sale price was determined by independent appraisal.
Winthrop is not affiliated with either the purchaser or the appraiser.
Status of the Partnership's Remaining Properties
The table on Page 4 provides summary information concerning the properties still
owned by the Partnership. The leasing status of each property is described
below:
1. Motorola, Mt. Pleasant, IA. Motorola has extended its lease through
November 30, 1997. Motorola is making annual lease payments of $111,600,
which is an increase of $5,800 over the original lease.
2. Duckwall-Alco, Nebraska City, NE. The lease expires on December 22,
2000 with an early termination option on January 31, 1998. A percentage
of the gross store sales was paid to the Partnership as additional rent
and distributed to investors in the First Quarter of 1993; no
percentage rents were paid in 1994 or 1995.
3. Dairy Mart, Ashtabula, OH. The lease for this property expired on July
1, 1995, and the porperty remains vacant. The Partnership is currently
marketing this property for sale but has received no offers. The
Partnership's original investment in this property represented less
than 1% of the initial offering proceeds.
4-6. Dairy Mart, three locations in Ohio and Michigan. The original terms of
the leases for the Dairy Mart properties have expired. Dairy Mart
renewed the leases at the current lease rates. The terms of the
renewals are: the Creston and Royal Oak locations through June 30, 1998
and the Bolivar location through June 30, 1997.
7,8. Toys R Us, Beaumont, TX and Livingston, NJ. These two leases expire on
January 1, 2001. Annual sales remain low at the Beaumont location;
thus, no additional rent has been paid to the Partnership. The
Livingston location has paid a percentage of gross sales as additional
rent in each of the last five years.
9. Wal-Mart, Bowling Green, KY. This lease expires on December 23, 2000.
The Partnership modified the existing lease, effective November 1994,
by increasing the annual base lease payment by $150,000, reducing the
percentage rents by $150,000, and allowing Wal-Mart to sublease the
property to another retail operator. The property is currently vacant,
however the tenant continues to make rent payments per the terms of the
lease.
10. Wal-Mart, Victoria, TX. This lease expires on December 23, 2000. A
percentage of the gross store sales has been paid to the Partnership in
each of the last nine years as additional rent. Due to strong local
retail market, Wal-Mart constructed in 1994 a Wal-Mart Super Store and
closed the store located in the Partnership's property. The Partnership
continues to receive the base lease payments from Wal-Mart but will not
receive percentage rent payments.
<PAGE>
The Partnership's future cash distributions will include ongoing disbursements
from net cash flow and one-time disbursements of sale proceeds. Cash flow will
be affected by, among other things, the terms of any new leases, any tenant
improvement and leasing costs associated with renewing leases with existing
tenants or signing leases with new tenants, the loss of rent and increased
expense during any period when a property is not under lease and the loss of
rent after a property is sold as well as on-going Partnership administrative
expenses.
Distributions of sale proceeds will be made as a partial return of capital. Per
the Partnership Agreement, sale proceeds are distributed 100% to limited
partners until they have received the $331.82 balance of their $500 per unit
original Capital Contribution. The general partners' 8% share of sale proceeds
would be paid subsequently.
The following tables outline the per unit cash distribution amounts for 1995 and
the cumulative results of the investment to date:
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
Summary of 1995 Investor Benefits
Total Annualized Total Total
Cash Pre-Tax Passive Portfolio
Distributions1 Return2 Income3 Income(4)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$31.34* 9.4% $24.45 $1.00
1st Quarter paid 5/15/95 $ 5.74
2nd Quarter paid 8/14/95 $ 10.76
3rd Quarter paid 11/14/95 $ 7.51
4th Quarter paid 2/14/96 $ 7.33
*The actual amount distributed was $31.22 per unit as a result of Nebraska
state withholding requirements.
- ------------------------------------------------------------------------------------------------------------------------------------
Cumulative Results Through December 31, 1995
</TABLE>
<TABLE>
Total Total Total
Limited Partner Cash Quarterly Cash Return of Total
Admission Date Distributions Distributions(1) Capital Profit(5)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
July 28, 1980 $829.70 $661.52 $145.69 $22.49
August 25, 1980 $826.20 $658.02 $145.69 $22.49
September 26, 1980 $822.19 $654.01 $145.69 $22.49
October 24, 1980 $817.73 $649.55 $145.69 $22.49
November 12, 1980 $814.62 $646.44 $145.69 $22.49
November 26, 1980 $812.28 $644.10 $145.69 $22.49
December 22, 1980 $807.99 $639.81 $145.69 $22.49
February 20, 1981 $799.96 $631.78 $145.69 $22.49
</TABLE>
The actual amount of the per unit distributions will vary as a result of
Nebraska and South Carolina state withholding requirements.
1 Represents one unit's share of cash flow generated from Partnership
operations.
2 Represents the annualized pre-tax return on remaining capital of $331.82 per
original $500.00 unit. Due to the Tax Reform Act of 1986, the Partnership is
unable to provide accurate after-tax returns as a result of investors'
varying Federal income tax situations. Please consult your personal financial
advisor.
3 Represents one unit's share of passive income generated from Partnership
operations. Passive losses generated from other sources may be used to offset
against this passive income, subject to limitations.
4 Rental income and funds held in Partnership reserves are invested in
short-term money market instruments prior to their distribution. This
portfolio income represents the interest income earned on these investments.
5 Profit is defined as the portion of sale proceeds distributed to limited
partners from the sale of a property in excess of the property's original
purchase price.
<PAGE>
The following table presents information regarding the eleven properties still
owned by the Partnership. All rental payments due to the Partnership through
December 31, 1995 are current.
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
Summary of Partnership Investments
Date of Total Cost of Tenant Use of Type of 1995 Base Lease
Tenant/Location Purchase the Property the Property Lease/ Rent Expiration
Terms
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Duckwall-Alco Stores, Inc.
Mt. Pleasant, IA 12/24/80 $ 982,616 Industrial Triple Net $ 109,200 12-22-2000
Motorola, Inc.
(Formerly Duckwall-Alco Stores, Inc.)
Nebraska City, NE 12/24/80 972,008 Retail Dept. Step Rent/ 111,600 11-30-97
Store % Rent
Dairy Mart
Ashtabula, OH 9/23/80 151,815 Convenience Triple Net/ 15,940 6-30-95
Stores % Rent
Bolivar, OH 9/23/80 178,163 18,707 6-30-97
Creston, OH 9/23/80 150,695 15,650 6-30-98
Royal Oak, MI 9/23/80 199,237 20,920 6-30-98
St. Clair Shores, MI 9/23/80 173,680 18,236 6-30-98
Toys "R" Us, Inc.
Beaumont, TX 11/19/80 2,234,050 Retail Toy Triple Net/ 224,700 1-1-2001
Livingston, NJ 11/19/80 2,127,950 Stores % Rent 214,000(1) 1-1-2001
Wal-Mart Stores, Inc.
Bowling Green, KY 12/30/80 1,877,000 Retail Dept. Triple Net/ 361,4932 12-23-2000
Victoria, TX 12/30/80 3,121,436 Stores % Rent 352,262 12-23-2000
$12,168,650 $1,462,708
</TABLE>
1 An additional rental payment of $48,547, representing a percentage of store
sales, was included in the Second Quarter of 1995 cash distribution.
2 An additional rental payment of $110,982, representing a percentage of store
sales, was included in the Second Quarter of 1995 cash distribution.
Definitions
Triple Net-all operating expenses are paid by tenant. Step Rent-the rent payable
by tenant periodically increases over time.
% Rent-additional rent payable by tenant in excess of base rent if annual sales
exceed certain minimum levels.
<PAGE>
Closing Comments
Your distribution check and Partnership Report for the First Quarter of 1996
will be mailed on May 15, 1996. In the meantime, please contact a representative
at Gemisys, our investor services agent, at (303) 705-3220 with any questions.
Very truly yours,
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
By: One Winthrop Properties, Inc.
Managing General Partner
/S/ Richard J. McCready
-----------------------------
Richard J. McCready
Chief Operating Officer
February 14, 1996
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO WINTHROP PARTNERS 80 LIMITED PARTNERSHIP:
We have audited the accompanying balance sheets of Winthrop Partners 80
Limited Partnership (a Massachusetts limited partnership) as of December 31,
1995 and 1994, and the related statements of income, changes in partners'
capital and cash flows for each of the three years in the period ended December
31, 1995. These financial statements are the responsibility of Winthrop Partners
80 Limited 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 80 Limited
Partnership as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1995, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
January 31, 1996
<PAGE>
STATEMENTS OF INCOME
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
For the Years Ended
December 31, 1995, 1994 and 1993 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income:
Rental income from real estate leases
accounted for under the operating
method............................................................. $ 702,265 $ 928,493 $ 871,894
Interest on short-term investments................................... 49,586 35,871 28,256
Interest income on real estate leases
accounted for under the financing
method............................................................. 622,317 538,661 564,843
Other income......................................................... 22,355 128 -
------ ---- -
1,396,523 1,503,153 1,464,993
--------- ---------- ---------
Expenses:
Depreciation and amortization........................................ 73,644 103,093 101,458
Management fees...................................................... 24,310 26,155 25,446
General and administrative........................................... 39,855 43,845 49,425
------ ------- ------
137,809 173,093 176,329
------- -------- -------
Operating income....................................................... 1,258,714 1,330,060 1,288,664
Loss on sale of property, net.......................................... - - (105,909)
Provision for write-down of property................................... (73,000) - -
-------- ------ -
Net income............................................................. $ 1,185,714 $ 1,330,060 $ 1,182,755
= ========= = ========== = =========
Net income allocated to General Partners............................... $ 100,697 $ 106,405 $ 103,093
= ======= = ======== = =======
Net income allocated to Limited Partners............................... $ 1,085,017 $ 1,223,655 $ 1,079,662
= ========= = ========== = =========
Net income per Unit of Limited Partnership
Interest............................................................. $ 23.77 $ 26.81 $ 23.65
= ===== = ====== = =====
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BALANCE SHEETS
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
December 31, 1995 and 1994 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Real Estate Leased to Others:
Accounted for under the operating method, at cost,......................
net of accumulated depreciation of $885,378 and
$741,473 as of December 31, 1995 and 1994,.............................
respectively........................................................... $ 3,261,161 $ 3,405,066
Accounted for under the financing method................................ 5,020,239 5,334,922
---------- ---------
8,281,400 8,739,988
Other Assets:
Cash and cash equivalents, at cost, which
approximates market value.............................................. 795,018 728,190
Other, net of accumulated amortization of
$13,923 and $11,184 as of December 31, 1995
and 1994, respectively................................................. 106,193 69,346
-------- ------
$ 9,182,611 $ 9,537,524
= ========== = =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities:
Accounts payable and accrued expenses................................... $ 44,979 $ 86,822
Distributions payable to Partners....................................... 366,216 336,604
-------- -------
411,195 423,426
-------- -------
Partners' Capital (Deficit):
Limited Partners
Units of Limited Partnership Interest, $500
stated value per Unit; authorized - 50,010
Units; issued and outstanding - 45,646 Units.......................... 9,281,303 9,626,831
General Partners........................................................ (509,887) (512,733)
--------- --------
8,771,416 9,114,098
---------- ---------
$ 9,182,611 $ 9,537,524
= ========== = =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENTS OF CASH FLOWS
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
For the Years Ended
December 31, 1995, 1994 and 1993 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
<S> <C> <C> <C>
Net income.............................................................. $ 1,185,714 $ 1,330,060 $ 1,182,755
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization......................................... 73,644 103,093 101,458
Provision for write-down of property.................................. 73,000 - -
Minimum lease payments received, net of interest
income earned, on leases accounted for under
the financing method................................................. 314,683 285,839 259,657
Loss on sale of property.............................................. - - 105,909
Changes in assets and liabilities:
(Decrease) increase in accounts payable and
accrued expenses................................................... (41,843) 12,305 15,452
(Increase) decrease in other assets................................. (39,586) (61,355) 2,221
-------- -------- -----
Net cash provided by operating activities:............................ 1,565,612 1,669,942 1,667,452
---------- ---------- ---------
Cash flows from financing activities:
Cash distributions paid................................................. (1,498,784) (1,672,819) (2,172,156)
----------- ----------- ----------
Net cash used by financing activities................................. (1,498,784) (1,672,819) (2,172,156)
----------- ----------- ----------
Cash flows from investing activities:
Net proceeds from sale of property...................................... - - 435,582
----- ----- -------
Net cash provided by investing activities............................. - - 435,582
----- ----- -------
Net increase (decrease) in cash and cash equivalents...................... 66,828 (2,877) (69,122)
Cash and cash equivalents, beginning of year.............................. 728,190 731,067 800,189
-------- -------- -------
Cash and cash equivalents, end of year.................................... $ 795,018 $ 728,190 $ 731,067
= ======== = ======== = =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------
UNITS OF
LIMITED GENERAL LIMITED
For the Years Ended PARTNERSHIP PARTNERS' PARTNERS' TOTAL
December 31, 1995, 1994 and 1993 INTEREST (DEFICIT) CAPITAL CAPITAL
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, December 31, 1992........................... 45,646 $ (454,074) $ 10,843,277 $ 10,389,203
Cash distributions paid or
accrued............................................ (133,583) (1,974,646) (2,108,229)
Net income........................................... 103,093 1,079,662 1,182,755
-------- ---------- ---------
Balance, December 31, 1993........................... 45,646 (484,564) 9,948,293 9,463,729
------ --------- ---------- ---------
Cash distributions paid or
accrued............................................ (134,574) (1,545,117) (1,679,691)
Net income........................................... 106,405 1,223,655 1,330,060
-------- ---------- ---------
Balance, December 31, 1994........................... 45,646 (512,733) 9,626,831 9,114,098
------ --------- ---------- ---------
Cash distributions paid or
accrued............................................ (97,851) (1,430,545) (1,528,396)
Net income........................................... 100,697 1,085,017 1,185,714
-------- ---------- ---------
Balance, December 31, 1995........................... 45,646 $ (509,887) $ 9,281,303 $ 8,771,416
====== = ========= = ========== = =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
1. ORGANIZATION
Winthrop Partners 80 (the Partnership), a limited partnership, was
organized under the Uniform Limited Partnership Act of the
Commonwealth of Massachusetts on February 5, 1980 for the purpose of
owning and leasing commercial and industrial real properties. The
Partnership will terminate on December 31, 2008 or sooner, in
accordance with the terms of the Partnership Agreement.
2. SIGNIFICANT ACCOUNTING POLICIES
Financial Statements - The financial statements of the Partnership
are prepared on the accrual basis of accounting in accordance with
generally accepted accounting principles.
Use of Estimate - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Income Taxes - No provision has been made for federal, state or local
income taxes in the financial statements of the Partnership. Partners
are required to report on their individual tax returns their
allocable share of income, gains, losses, deductions and credits of
the Partnership. The Partnership prepares tax returns on the accrual
basis. On May 16, 1980, the Internal Revenue Service issued a ruling
that the Partnership will be classified as a partnership for federal
income tax purposes.
Distributions to Partners - The cash distribution due Partners for
the three months ended December 31, 1995 is recorded in the
accompanying financial statements as a liability and a reduction of
Partners' capital. As provided in the Partnership Agreement,
quarterly distributions are payable to Partners within 60 days after
the end of the quarter.
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, 1995, 1994 and 1993, the Partnership received percentage
rent totaling approximately $161,418, $456,230 and $357,870,
respectively.
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.
(b) Operating Method
Under this method, revenue is recognized as rental payments
become due, which does not materially differ from the
straight-line method. Expenses (including depreciation) are
charged to operations as incurred.
<PAGE>
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Cash and cash equivalents - Cash and cash equivalents consist of a
mutual fund that invests in treasury bills and repurchase agreements
that mature in three months or less. Cash equivalents are valued at
cost, which approximates market 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 useful life of each class of asset,
which ranges from 5 to 35 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
fair market value at the date of implementation of operating lease
accounting.
3. TRANSACTIONS WITH RELATED PARTIES
One Winthrop Properties, Inc. (One Winthrop), the Managing General
Partner; Winthrop Securities Co., Inc. (Winthrop Securities), the
selling agent for the Public Offering; and Winthrop Management, the
manager of the properties, are wholly owned subsidiaries of First
Winthrop Corporation, which in turn is wholly owned by Winthrop
Financial Associates, a Limited Partnership (WFA).
Winthrop Management 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 it manages. For the years ended
December 31, 1995, 1994 and 1993, Winthrop Management earned $24,310,
$26,155 and $25,446, respectively, for managing the real 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. The General Partners are also
entitled to 8% of Sale or Refinancing Proceeds, subordinated to
certain priority distributions to the Limited Partners as provided
for in the Partnership Agreement. For the years ended December 31,
1995, 1994 and 1993, the Partnership has paid or accrued
distributions from Cash Available for Distribution totaling $97,851,
$134,574 and $133,583, respectively, to the General Partners. The
proceeds from the sales of properties in 1993 (see Note 6) were
distributed entirely to the Limited Partners.
During the liquidation stage of the Partnership, the General Partners
and their affiliates are entitled to receive distributions,
subordinated to specified minimum returns to the Limited Partners, as
described in the Partnership Agreement.
<PAGE>
4. REAL ESTATE LEASED TO OTHERS ACCOUNTED FOR UNDER THE OPERATING METHOD
Real estate leased to others, at cost, accounted for under the
operating method as of December 31, 1995 and 1994, is summarized as
follows:
<TABLE>
-------------------------------------------------------------------------------------------------
1995 1994
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Land............................................ $ 2,127,427 $ 2,127,427
Commercial buildings............................ 2,019,112 2,019,112
Less: Accumulated depreciation.................. (885,378) (741,473)
-------- --------
$ 3,261,161 $ 3,405,066
= ========= = =========
</TABLE>
<TABLE>
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:
<S> <C> <C> <C>
1996................................................. 493,000
1997................................................. 474,000
1998................................................. 343,000
1999................................................. 318,000
2000................................................. 272,000
Thereafter........................................... 0
</TABLE>
5. REAL ESTATE LEASED TO OTHERS ACCOUNTED FOR UNDER THE FINANCING METHOD
Real estate leased to others, accounted for under the financing
method, as of December 31, 1995 and 1994, is summarized as follows:
<TABLE>
-----------------------------------------------------------------------------------------------------------------
1995 1994
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Minimum lease payments receivable................................ $ 4,527,666 $ 4,920,916
Unguaranteed residual value...................................... $ 2,918,533 2,918,533
- --------- ---------
7,446,199 7,839,449
Less: Unearned income (2,425,960) (2,504,527)
----------- ----------
$ 5,020,239 $ 5,334,922
= ========= = =========
</TABLE>
The following is a summary of the approximate minimum anticipated
future rental receipts, excluding percentage rents, by year, under
the noncancelable portion of the financing leases:
<TABLE>
<S> <C> <C>
1996..................................... 937,000
1997..................................... 937,000
1998..................................... 937,000
1999..................................... 918,000
2000..................................... 798,000
Thereafter............................... 0
</TABLE>
6. SALES OF PROPERTIES
On September 8, 1993, the Partnership sold the Dairy Mart in
Berkeley, Michigan, for $120,000 in cash, and on September 30, 1993,
the Partnership sold the Greenville, South Carolina, property for
$345,000 in cash. The sales provided $435,582 of net proceeds, which
were distributed in the fourth quarter of 1993 and resulted in a net
loss of $105,909.
7. WRITE-DOWN OF PROPERTY
In connection with its evaluation of the Ashtabula, Ohio property,
management of the Partnership wrote down the carrying value of the
property by $73,000 to $0, at December 31, 1995. The reserve is
reflected as a component of accumulated depreciation in the
accompanying balance sheets.
<PAGE>
8. TAXABLE INCOME
The Partnership's taxable income for 1995 differs from net income for
financial reporting purposes primarily due to the differences in the
methods used for the recognition of depreciation and the accounting
for certain real property leases under the financing method for
financial reporting purposes and the operating method for tax return
purposes. Taxable income for 1995 is as follows:
<TABLE>
<S> <C>
Net income for financial reporting purposes................................................... $ 1,185,714
Plus: Minimum lease payments received,
net of interest income earned, on
leases accounted for under the
financing method..................................................................... 314,683
Write-down of property................................................................ 73,000
Minus: Depreciation on property subject to leases
accounted for under the financing
method and tax depreciation adjustment............................................... (256,181)
--------
Taxable income............................................................................... $ 1,317,216
= =========
</TABLE>
9. SUBSEQUENT EVENT
On January 18, 1996, the Partnership sold the property in St. Clair
Shores, Michigan for $140,000, resulting in a gain of approximately
$50,000 for financial reporting purposes. The net proceeds will be
distributed to the limited partners during 1996.
<PAGE>
SUPPLEMENTARY INFORMATION
REQUIRED PURSUANT TO SECTION 9.4 OF THE PARTNERSHIP AGREEMENT
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
December 31, 1995 Three Months Ended Year Ended
(Unaudited) December 31, 1995 December 31, 1995
1. Statement of Cash Available for Distribution:
<S> <C> <C>
Net Income............................................................. $ 200,808 $ 1,185,714
Add: Depreciation and amortization charges to income
not affecting Cash Available for
Distribution................................................. 5,175 73,664
Minimum lease payments received, net of
interest income earned, on leases accounted
for under the financing method............................... 81,535 314,683
Write-down of property........................................ 73,000 73,000
Write-off of accounts payable................................. 0 (22,676)
Rent receivable............................................... 12,363 (95,980)
Prepaid Rent.................................................. (9,300) 0
------- -
Cash Available for Distribution........................................ $ 363,581 $ 1,528,385
- -------- - ---------
Distributions allocated to General Partners............................ $ 29,007 $ 97,851
- ------- - ------
Distributions allocated to Limited Partners............................ $ 334,574 $ 1,430,546
= ======== = =========
</TABLE>
2. Fees and other compensation paid or accrued by the Partnership to the
General Partners, or their affiliates, for the three months ended December
31, 1995:
<TABLE>
<S> <C> <C> <C>
Entity Receiving Form of (Unaudited)
Compensation Compensation Amount
- ----------------- ------------------- ------
Winthrop Management Property management fees $ 5,286
General Partners Interest in Cash Available
for Distribution $ 29,007
WFC Realty Co., Inc. Interest in Cash Available
for Distribution $ 1,539
</TABLE>
All other information required pursuant to Section 9.4 of the Partnership
Agreement is set forth in the attached Financial Statements and related notes or
the Annual Partnership Report.
<PAGE>
8. PROPERTY SUMMARY
The following is a summary of real estate (accounted for under the
operating or financing method) leased to others (land and commercial
building at each location) held on a fee ownership basis at December 31,
1995:
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------
Costs
Purchase Capitalized
Name Price Including Subsequent
Date Acquired of Tenant Location Acquisition Fees to Acquisition Gross Cost
<S> <C> <C> <C> <C> <C>
September 23, 1980 The Lawson Company Bolivar, Creston, $1,025,131 $13,556 $1,038,687
and Ashtabula, OH;
Royal Oak, Berkley
and St. Clair
Shores, MI
November 19, 1980 Toys "R" Us, Inc. Livingston, NJ 4,360,000 2,000 4,362,000
and Beaumont, TX
December 24, 1980 Duckwall-Alco Mt. Pleasant, IA 1,941,575 13,049 1,954,624
Stores, Inc. & and Nebraska City,
Motorolla, Inc. NE
December 30, 1980 Wal-Mart Bowling Green, KY 4,984,416 14,020 4,998,436
Stores, Inc. and Victoria, TX
</TABLE>
<PAGE>
WINTHROP PARTNERS 80
REAL ESTATE AND ACCUMULATED DEPRECIATION
(ACCOUNTED FOR UNDER THE OPERATING METHOD)
DECEMBER 31, 1995
SCHEDULE XI
1 of 3
<TABLE>
Initial cost to Partnership &
gross amount at which carried
as of Dec. 31, 1995 (A,B,&C) Accumulated Life on which
----------------------------
Depreciation Date of Depreciation
Buildings & as of Dec. 31, Construction Date Expense
Description Land Improvements Total 1995 (D) Completion Acquired is Computed
- ----------- ---- ------------ ----- -------------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Land and retail stores,
Bolivar, Creston and
Ashtabula, OH; Royal
Oak, and St. Clair
Shores, MI (E) $ 210,533 $ 491,242 $ 701,775 $ 378,180 1980 Sept. 1980 5-40 years
Land and retail store,
Mt. Pleasant, IA 95,999 703,999 799,998 176,000 1979 Dec. 1980 5-40 years
Land and retail store,
Nebraska City, NB 62,400 717,600 780,000 179,400 1979 Dec. 1980 5-40 years
Land,
Livingston, NJ 595,826 - 595,826 - - Nov. 1980 -
Land,
Beaumont, TX 647,875 - 647,875 - - Nov. 1980 -
Land,
Bowling Green, KY 469,250 - 469,250 - - Dec. 1980 -
---------- ---------- ---------- ----------
$2,127,427 $2,019,112 $3,994,724 $ 733,580
========== ========== ========== ==========
</TABLE>
<PAGE>
WINTHROP PARTNERS 80
REAL ESTATE AND ACCUMULATED DEPRECIATION
(ACCOUNTED FOR UNDER THE OPERATING METHOD)
DECEMBER 31, 1995
SCHEDULE XI
page 2 of 3
(A) The cost of the properties represents the purchase price of the
properties plus miscellaneous acquisition and closing costs. Included
in the costs are property acquisition fees totaling $585,437 paid to
the Managing General Partner (see Note 3 of Notes to Financial
Statements).
(B) The cost of real estate owned at December 31, 1995 is the same for
financial statement and income tax reporting purposes.
(C) Reconciliation of real estate owned:
<TABLE>
<S> <C>
Balance as of December 31, 1994...................... $ 4,146,539
Additions during 1995................................ 0
Write-down of property during 1995................... (151,815)
----------
Balance as of December 31, 1995...................... $ 3,994,724
===========
</TABLE>
(D) Reconciliation of accumulated depreciation:
<TABLE>
<S> <C>
Balance as of December 31, 1994...................... $ 741,490
Depreciation expense during 1995..................... 70,905
Write-down of property during 1995................... (78,815)
----------
Balance as of December 31, 1995...................... $ 733,580
===========
</TABLE>
(E) All five stores are approximately the same size and have equivalent land,
building and improvement costs.
<PAGE>
WINTHROP PARTNERS 80
REAL ESTATE AND ACCUMULATED DEPRECIATION
(ACCOUNTED FOR UNDER THE FINANCING METHOD)
DECEMBER 31, 1995
SCHEDULE XI
page 3 of 3
<TABLE>
Minimum lease payments
Net Investment in received net of interest Date of Length of Lease
Financing Leases at Income Earned at Construction Date on Which Interest
Description point of purchase(A) December 31, 1995 (B) Completion Acquired Income is Computed
- ----------- -------------------- ------------------------ ------------ -------- ------------------
<S> <C> <C> <C> <C> <C>
Retail store,
Livingston, NJ $1,532,124 $ 619,348 1980 Nov. 1980 20 years
Retail store,
Beaumont, TX 1,586,176 640,927 1980 Nov. 1980 20 years
Retail store,
Bowling Green, KY 1,407,750 532,978 1980 Dec. 1980 20 years
Land and retail store,
Victoria, TX 3,121,435 833,993 1980 Dec. 1980 20 years
---------- ----------
$7,647,485 $2,627,246
========== ==========
</TABLE>
(A) The net investment in financing leases at the point of purchase reflects the
purchase price of the properties plus miscellaneous acquisition and closing
costs. Included in the costs are property acquisition fees totaling $555,463
paid to the Managing General Partner (See Note 3 of Notes to Financial
Statement). The net investment at the point of purchase is as follows:
<TABLE>
<S> <C>
Minimum lease payments receivable........... $ 17,033,726
Plus: Unguaranteed residual................ 2,918,533
Minus: Unearned income..................... (12,304,774)
------------
Net Investment.............................. $ 7,647,485
============
</TABLE>
(B) Reconciliation of minimum lease payments received net of interest income
earned:
<TABLE>
<S> <C>
Balance as of December 31, 1994............. $ 2,312,563
Minimum lease payments received net of
interest income earned during 1995......... 314,683
------------
Balance as of December 31, 1995............. $ 2,627,246
============
</TABLE>
