<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, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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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)
Five Cambridge Center, Boston, 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
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<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1998
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
<CAPTION>
Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
September 30, December 31,
1998 1997
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<S> <C> <C>
Assets
Real Estate:
Accounted for under the operating method, at cost,
net of accumulated depreciation of $487 (1998)
and $667 (1997) $ 4,263 $ 2,474
Accounted for under the operating method, at cost,
net of accumulated depreciation of $85 and held for sale 90 --
Accounted for under the financing method 2,046 4,292
------- -------
6,399 6,766
Other Assets:
Cash and cash equivalents 1,840 1,541
Other assets, net of accumulated amortization
of $2 (1998) 57 15
------- -------
Total Assets $ 8,296 $ 8,322
======= =======
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 69 $ 63
Distributions payable to partners 293 152
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Total Liabilities 362 215
------- -------
Partners' Capital:
Limited Partners -
Units of Limited Partnership Interest,
$500 stated value per Unit; authorized - 50,010
Units; issued and outstanding - 45,646 Units 8,362 8,610
General Partners' Deficit (428) (503)
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Total Partners' Capital 7,934 8,107
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Total Liabilities and Partners' Capital $ 8,296 $ 8,322
======= =======
</TABLE>
See notes to financial statements.
2 of 13
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
Statements of Income (Unaudited)
(In Thousands, Except Unit Data)
For the Three Months Ended For The Nine Months Ended
September 30, September 30, September 30, September 30,
1998 1997 1998 1997
------ ------ ------ ------
<S> <C> <C> <C> <C>
Income:
Rental income from real estate leases accounted
for under the operating method $ 151 $ 124 $ 474 $ 445
Interest on short-term investments 23 17 69 42
Interest income on real estate leases accounted
for under the financing method 76 138 322 420
Gain on sale of property -- 46 131 46
Other income -- 17 200 47
------ ------ ------ ------
Total income 250 342 1,196 1,000
------ ------ ------ ------
Expenses:
Depreciation and amortization 20 12 43 33
Management fees 5 5 16 17
General and administrative 25 22 79 91
------ ------ ------ ------
Total expenses 50 39 138 141
------ ------ ------ ------
Net income $ 200 $ 303 $1,058 $ 859
====== ====== ====== ======
Net income allocated to general partners $ 16 $ 21 $ 75 $ 65
====== ====== ====== ======
Net income allocated to limited partners $ 184 $ 282 $ 983 $ 794
====== ====== ====== ======
Net income per Unit of Limited Partnership Interest $ 4.03 $ 6.18 $21.54 $17.39
====== ====== ====== ======
Distributions per Unit of Limited Partnership Interest $ 6.42 $ 5.00 $26.97 $11.90
====== ====== ====== ======
</TABLE>
See notes to financial statements.
3 of 13
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1998
Statements of Partners' Capital (Unaudited)
(In Thousands, Except Unit Data)
Units of
Limited General Limited
Partnership Partners' Partners' Total
Interest Deficit Capital Capital
------- ------- ------- -------
Balance - January 1, 1998 45,646 $ (503) $ 8,610 $ 8,107
Distributions -- (1,231) (1,231)
Net income 75 983 1,058
------- ------- ------- -------
Balance - September 30, 1998 45,646 $ (428) $ 8,362 $ 7,934
======= ======= ======= =======
See notes to financial statements.
4 of 13
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
Statements of Cash Flows (Unaudited)
(In Thousands)
For The Nine Months Ended
September 30, September 30,
1998 1997
------- -------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 1,058 $ 859
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 41 31
Amortization 2 2
Gain on sale of property (131) (46)
Changes in assets and liabilities:
Increase in other assets (44) (4)
Increase (decrease) in accounts payable and
accrued expenses 6 (47)
------- -------
Net cash provided by operating activities: 932 795
------- -------
Cash Flows From Investing Activities:
Minimum lease payments received, net of interest income
earned, on leases accounted for under the financing method 263 282
Net proceeds from sale of property 194 80
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Cash provided by investing activities 457 362
------- -------
Cash Flows From Financing Activities:
Cash distributions (1,090) (648)
------- -------
Cash used in financing activities (1,090) (648)
------- -------
Net increase in cash and cash equivalents 299 509
Cash and cash equivalents, beginning of period 1,541 904
------- -------
Cash and cash equivalents, end of period $ 1,840 $ 1,413
======= =======
Supplemental Disclosure of Non-cash Financing
Activities:
Accrued Distribution to Partners $ 293 $ 228
======= =======
</TABLE>
Change in lease classification due to new tenant - see Note 4
See notes to financial statements.
5 of 13
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 1998
NOTES TO FINANCIAL STATEMENTS
1. General
The accompanying financial statements, footnotes and discussions
should be read in conjunction with the financial statements, related
footnotes and discussions contained in the Partnership's annual
report on Form 10-KSB for the year ended December 31, 1997.
The financial information contained herein is unaudited. In the
opinion of management, all adjustments necessary for a fair
presentation of such financial information have been included. All
adjustments are of a normal recurring nature, except as discussed in
Notes 3 and 4. Certain amounts have been reclassified to conform to
the September 30, 1998 presentation. The balance sheet at December
31, 1997, was derived from audited financial statements at such
date.
The results of operations for the nine months ended September 30,
1998 and 1997, are not necessarily indicative of the results to be
expected for the full year.
2. Related Party Transactions
Management fees earned by an affiliate of the Managing General
Partner, totaled $16,000 and $17,000 during the nine months ended
September 30, 1998 and 1997, respectively.
3. Sale of Property
On March 6, 1998, the Partnership sold its Royal Oak, Michigan
property to an unaffiliated third party for $194,000 (net of closing
costs of $6,000), resulting in a gain of $131,000.
4. Significant Tenant
During January 1998, the Partnership leased approximately 60,000
square feet of the 96,000 square foot Victoria, Texas property to
Hobby Lobby Creative Center pursuant to a lease which expires May
2008, with two renewal options of five years each. The new lease is
accounted for as an operating lease in accordance with Statement of
Financial Accounting Standards No. 13. The previous tenant's lease
(Wal-Mart) was to expire in December 2000, however, on January 30,
1998, the Partnership signed a lease termination agreement with the
previous tenant whereby the previous tenant would make certain
improvements to the property, pay rent through June 1, 1998 and pay
a termination fee in the amount of $200,000. The termination fee is
included in other income.
6 of 13
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WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 1998
Item 2. Management's Discussion and Analysis or Plan of Operation
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
Each of the Partnership's remaining eight properties (except
Ashtabula, Ohio which is currently not leased) is leased to a single
tenant pursuant to triple net leases with remaining lease terms,
subject to extensions, ranging between one month and ten years. The
Partnership receives rental income from its properties which is its
primary source of liquidity. Pursuant to the terms of the leases,
the tenants are responsible for substantially all of the operating
expenses with respect to the properties, including maintenance,
capital improvements, insurance and taxes (except for the Victoria,
Texas property, where the tenant is responsible only for its
proportionate share of expenses other than capital improvements). 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 will be required to either sell the
properties or procure new tenants. If the Partnership attempts to
procure new tenants, it 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.
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. With respect to the Dairymart lease
(Bolivar, Ohio), the term of the original lease expired in June 1998
and was extended on a month to month basis. The tenant has exercised
its right to terminate the lease December 1998. The Partnership is
currently marketing this property for sale. The Motorola lease
extension (the Mt. Pleasant, IA property), which expires in November
1998, is anticipated to be extended for another year, until November
1999, at the same rental rate. If, however, the lease is not
extended, the Partnership will be required to either sell the
property or procure a new tenant. The Partnership's Bowling Green,
Kentucky property which is leased to Wal-Mart Stores is currently
vacant. This lease is scheduled to expire in December 2000. Wal-Mart
continues to pay rent pursuant to the lease terms. On March 6, 1998,
the Partnership sold its Royal Oak, Michigan property for $194,000
(net of closing costs of $6,000), resulting in a gain of $131,000.
The Partnership distributed the net sales proceeds during March
1998.
7 of 13
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 1998
Item 2. Management's Discussion and Analysis or Plan of Operation (Continued)
Liquidity and Capital Resources (Continued)
During January 1998, the Partnership leased approximately 60,000
square feet of the 96,000 square foot Victoria, Texas property to
Hobby Lobby Creative Center pursuant to a lease which expires May
2008, with two renewal options of five years each. The previous
tenant's lease (Wal-Mart) was to expire in December 2000, however,
on January 30, 1998, the Partnership signed a lease termination
agreement with the previous tenant whereby the previous tenant would
make certain improvements to the property, pay rent through June 1,
1998 and pay a termination fee in the amount of $200,000. The new
lease with Hobby Lobby provides for a higher rental rate and the
tenant started to occupy the space in May 1998.
The level of liquidity based on cash and cash equivalents
experienced a $299,000 increase at September 30, 1998, as compared
to December 31, 1997. The Partnership's $932,000 of cash provided by
operating activities, $263,000 of lease payments received under
financing leases (net of interest income) and net proceeds of
$194,000 from the sale of the Royal Oak, Michigan property
(investing activities) were partially offset by $1,090,000 of cash
used for partner distributions (financing activities). At September
30, 1998, the Partnership had $1,840,000 in cash and cash
equivalents which has been invested primarily in money market mutual
funds. The Partnership maintains cash reserves to enable it to make
potential capital improvements required in connection with the
re-leasing of the properties.
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 operating 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, 1998, 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. As of September 30,
1998, Partnership distributions (paid or accrued) aggregated
$1,231,000 ($26.97 per Unit) to its limited partners, which included
approximately $194,000 of proceeds from the sale of the
Partnership's Royal Oak, Michigan property and the $200,000
termination fee received from Wal-Mart stores for the Partnership's
Victoria, Texas property.
8 of 13
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WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 1998
Item 2. Management's Discussion and Analysis or Plan of Operation (Continued)
Results of Operations
Net income increased by $199,000 for the nine months ended September
30, 1998, as compared to 1997, due to an increase in revenues of
$196,000 and a decrease in expenses of $3,000.
Revenues increased for the nine months ended September 30, 1998, as
compared to 1997, due to the $131,000 gain on sale of the Royal Oak,
Michigan property during 1998, as compared to a $46,000 gain on sale
of the Creston, Ohio property during 1997, and an increase in other
income of $153,000. Other income increased due to the $200,000
termination fee received from Wal-Mart Stores for the Partnership's
Victoria, Texas property. With respect to the remaining properties,
income (excluding the termination fee from Wal-Mart stores) and
expenses remained relatively constant.
9 of 13
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 1998
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27. Financial Data Schedule
99. Supplementary Information Required Pursuant to Section 9.4
of the Partnership Agreement.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the three months ended
September 30, 1998.
10 of 13
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1998
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
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 6, 1998
11 of 13
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 1998
Exhibit Index
Exhibit Page No.
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27. Financial Data Schedule --
99. Supplementary Information Required Pursuant to
Section 9.4 of the Partnership Agreement. 13
12 of 13
<PAGE>
Exhibit 99
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 1998
Supplementary Information Required Pursuant to Section 9.4 of the Partnership
Agreement
1. Statement of Cash Available for Distribution for the three months ended
September 30, 1998:
Net income $200,000
Add: Depreciation and amortization charged to income not
affecting cash available for distribution 20,000
Minimum lease payments received, net of interest
income earned, on leases accounted for under the
financing method 70,000
Cash from reserves 3,000
--------
Cash Available for Distribution $293,000
========
Distributions allocated to General Partners $ --
========
Distributions allocated to Limited Partners $293,000
========
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, 1998:
<TABLE>
<CAPTION>
Entity Receiving Form of
Compensation Compensation Amount
- ------------------------- ---------------------------------------------- -------------
<S> <C> <C>
Winthrop
Management LLC Property Management Fees $ 5,000
General Partners Interest in Cash Available for Distribution $ -
WFC Realty Co., Inc.
(Initial Limited Partner) Interest in Cash Available for Distribution $ 1,346
</TABLE>
13 of 13
<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-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 1,840,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 6,971,000
<DEPRECIATION> (572,000)
<TOTAL-ASSETS> 8,296,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 7,934,000
<TOTAL-LIABILITY-AND-EQUITY> 8,296,000
<SALES> 0
<TOTAL-REVENUES> 1,127,000 <F1>
<CGS> 0
<TOTAL-COSTS> 59,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,058,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,058,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,058,000
<EPS-PRIMARY> 21.54
<EPS-DILUTED> 21.54
<FN>
<F1>
Includes gain on sale of property of $131,000.
</FN>
</TABLE>
