<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, 1999
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)
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
----- -----
1 of 16
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
--------------------- ---------------------
<S> <C> <C>
Assets
Real Estate:
Accounted for under the operating method,
at cost, net of accumulated depreciation of
$549 (1999) and $506 (1998) $ 3,957 $ 4,456
Accounted for under the operating method, at cost,
net of accumulated depreciation of $85 and held for sale 39 39
Accounted for under the financing method 1,243 1,975
--------------------- ---------------------
5,239 6,470
Other Assets:
Cash and cash equivalents 3,523 1,761
Other assets 70 69
--------------------- ---------------------
Total Assets $ 8,832 $ 8,300
===================== =====================
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 82 $ 146
Distributions payable to partners 255 310
--------------------- ---------------------
Total Liabilities 337 456
--------------------- ---------------------
Partners' Capital:
Limited Partners -
Units of Limited Partnership Interest,
$500 stated value per Unit; authorized - 50,010
Units; issued and outstanding - 45,646 Units 8,870 8,254
General Partners' Deficit (375) (410)
--------------------- ---------------------
Total Partners' Capital 8,495 7,844
--------------------- ---------------------
Total Liabilities and Partners' Capital $ 8,832 $ 8,300
===================== =====================
</TABLE>
See notes to financial statements.
2 of 16
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
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,
1999 1998 1999 1998
------------------- ------------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Income:
Rental income from real estate leases
accounted for under the operating method $ 216 $ 194 $ 394 $ 320
Interest on short-term investments 21 24 39 46
Interest income on real estate leases
accounted for under the financing method 27 113 86 246
Gain on sale of property 527 - 527 134
Other income 2 - 2 200
------------------- ------------------- ------------------ ------------------
Total income 793 331 1,048 946
------------------- ------------------- ------------------ ------------------
Expenses:
Depreciation and amortization 23 13 46 23
Management fees 3 6 8 11
Operating expenses 24 1 35 2
General and administrative 28 23 53 52
------------------- ------------------- ------------------ ------------------
Total expenses 78 43 142 88
------------------- ------------------- ------------------ ------------------
Net income $ 715 $ 288 $ 906 $ 858
=================== =================== ================== ==================
Net income allocated to general partners $ 20 $ 23 $ 35 $ 59
=================== =================== ================== ==================
Net income allocated to limited partners $ 695 $ 265 $ 871 $ 799
=================== =================== ================== ==================
Net income per Unit of Limited Partnership
Interest $ 15.22 $ 5.80 $ 19.08 $ 17.50
=================== =================== ================== ==================
Distributions per Unit of Limited Partnership
Interest $ 5.59 $ 6.44 $ 5.59 $ 20.55
=================== =================== ================== ==================
</TABLE>
See notes to financial statements.
3 of 16
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
Statements of Partners' Capital (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
Units of
Limited Limited General
Partnership Partners' Partners' Total
Interest Capital Deficit Capital
------------------ ------------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Balance - January 1, 1999 45,646 $ 8,254 $ (410) $ 7,844
Distribution (255) - (255)
Net income 871 35 906
------------------ ------------------- ------------------ -------------------
Balance - June 30, 1999 45,646 $ 8,870 $ (375) $ 8,495
================== =================== ================== ===================
</TABLE>
See notes to financial statements.
4 of 16
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
Statements of Cash Flows (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
For The Six Months Ended
June 30, June 30,
1999 1998
--------------------- ---------------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 906 $ 858
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 43 22
Amortization 3 1
Gain on sale of property (527) (134)
Changes in assets and liabilities:
(Increase) in other assets (4) (41)
Increase (decrease) in accounts payable and
accrued expenses 16 (4)
--------------------- ---------------------
Net cash provided by operating activities: 437 702
--------------------- ---------------------
Cash Flows From Investing Activities:
Minimum lease payments received, net of interest income
earned, on leases accounted for under the financing method 116 193
Net proceeds from sale of property 1,765 197
Additions to real estate (246) -
--------------------- ---------------------
Net cash provided by investing activities 1,635 390
--------------------- ---------------------
Cash Flows From Financing Activities:
Cash distributions (310) (796)
--------------------- ---------------------
Cash used in financing activities (310) (796)
--------------------- ---------------------
Net increase in cash and cash equivalents 1,762 296
Cash and cash equivalents, beginning of period 1,761 1,541
--------------------- ---------------------
Cash and cash equivalents, end of period $ 3,523 $ 1,837
===================== =====================
Supplemental Disclosure of Non-cash Financing
Activities -
Accrued Distributions to Partners $ 255 $ 294
===================== =====================
</TABLE>
See notes to financial statements.
5 of 16
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
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, 1998.
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 Note 3. Certain amounts
have been reclassified to conform to June 30, 1999 presentation. The
balance sheet at December 31, 1998 was derived from audited financial
statements at such date.
The results of operations for the six months ended June 30, 1999 and
1998, 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 $8,000 and $11,000 during the six months ended June 30, 1999
and 1998, respectively.
3. Sale of Property
The Partnership's Bowling Green, Kentucky property was sold on June 16,
1999 for $1,765,000 (net of closing costs of $135,000). Since the
carrying value of the property was approximately $1,238,000, the
Partnership realized a gain of approximately $527,000. The Partnership
is negotiating with Wal-Mart for the settlement of insurance proceeds
for damages sustained as a result of a hailstorm in April 1998.
Insurance proceeds are expected to be approximately $750,000.
4. Subsequent Event
The Partnership's Ashtabula, Ohio property was sold on July 23, 1999
for approximately $31,000 (net of approximately $9,000 in closing
costs). Since the carrying value of the property was written down to
zero, the Partnership will realize a gain of approximately $31,000
during the third quarter of 1999.
6 of 16
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
NOTES TO FINANCIAL STATEMENTS
(Continued)
5. Pro Forma Financial Information
The following pro forma statements of income for the six months ended
June 30, 1999 and 1998, gives effect to the sales of the Bowling Green,
Kentucky; Ashtabula, Ohio; and Royal Oak, Michigan properties. The
adjustments to the pro forma statements of income assumes the
transactions were consummated at the beginning of the period presented.
The Bowling Green property was sold on June 16, 1999, the Ashtabula
Property was sold on July 23, 1999 and the Royal Oak, Michigan property
was sold on March 6, 1998. The Ashtabula property had been vacant
since 1995.
These pro forma adjustments are not necessarily reflective of the
results that actually would have occurred if the sale had been in
effect, as of, and for the period presented or what may be achieved in
the future.
7 of 16
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
NOTES TO FINANCIAL STATEMENTS
(Continued)
Pro Forma Statement of Income (Unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended June 30, 1999
(In thousands, except unit data) Pro Form
Historical Adjustments Pro Forma
------------------- ------------------- -------------------
<S> <C> <C> <C>
Income:
Rental income from real estate leases accounted
for under the operating method $ 394 $ (15) $ 379
Interest on short-term investments 39 - 39
Interest income on real estate leases accounted
for under the financing method 86 (29) 57
Gain on sale of property 527 (527) -
Other income 2 - 2
------------------- ------------------- -------------------
Total income 1,048 (571) 477
------------------- ------------------- -------------------
Expenses:
Depreciation and amortization 46 - 46
Management fees 8 - 8
Operating expenses 35 (25) 10
General and administrative 53 (4) 49
------------------- ------------------- -------------------
Total expenses 142 (29) 113
------------------- ------------------- -------------------
Net income $ 906 $ (542) $ 364
=================== =================== ===================
Net income allocated to general partners $ 35 $ (6) $ 29
=================== =================== ===================
Net income allocated to limited partners $ 871 $ (536) $ 335
=================== =================== ===================
Net income per unit of limited partnership interest $ 19.08 $ (11.74) $ 7.34
=================== =================== ===================
</TABLE>
8 of 16
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
NOTES TO FINANCIAL STATEMENTS
(Continued)
Pro Forma Statement of Income (Unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended June 30, 1998
(In thousands, except unit data) Pro Form
Historical Adjustments Pro Forma
------------------- ------------------- -------------------
<S> <C> <C> <C>
Income:
Rental income from real estate leases accounted
for under the operating method $ 320 $ (63) $ 257
Interest on short-term investments 46 - 46
Interest income on real estate leases accounted
for under the financing method 246 (92) 154
Gain on sale of property 134 (134) -
Other income 200 - 200
------------------- ------------------- -------------------
Total income 946 (289) 657
------------------- ------------------- -------------------
Expenses:
Depreciation and amortization 23 - 23
Management fees 11 (3) 8
Operating expenses 2 (2) -
General and administrative 52 - 52
------------------- ------------------- -------------------
Total expenses 88 (5) 83
------------------- ------------------- -------------------
Net income $ 858 $ (284) $ 574
=================== =================== ===================
Net income allocated to general partners $ 59 $ (13) $ 46
=================== =================== ===================
Net income allocated to limited partners $ 799 $ (271) $ 528
=================== =================== ===================
Net income per unit of limited partnership interest $ 17.50 $ (5.93) $ 11.57
=================== =================== ===================
</TABLE>
9 of 16
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
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 six properties (except Bolivar,
Ohio, which is currently vacant) is leased to a single tenant pursuant
to net leases with remaining lease terms, subject to extensions,
ranging between three months and nine 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). Four of the Partnership's properties,
representing approximately 67% of minimum rental receipts anticipated
during 1999, have leases which expire between November 30, 1999 and
January 1, 2001. 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.
The Partnership's Bowling Green, Kentucky property, which was leased to
Wal-Mart stores, was sold on June 16, 1999 for $1,765,000 (net of
closing costs of $135,000). Since the carrying value of the property
was approximately $1,238,000, the Partnership realized a gain of
approximately $527,000. The Partnership is currently negotiating with
Wal-Mart the settlement of insurance proceeds for damages sustained as
a result of a hailstorm in April 1998. Insurance proceeds are expected
to be between $500,000 and $1,000,000. Any insurance proceeds actually
received will be recorded as income when received. The Partnership's
Ashtabula, Ohio property was sold on July 23, 1999 for approximately
$31,000 (net of approximately $9,000 in closing costs).
The level of liquidity based on cash and cash equivalents experienced a
$1,762,000 increase at June 30, 1999 as compared to December 31, 1998.
The increase was due to $1,635,000 provided by investing activities and
$437,000 provided by operating activities, which was partially offset
by $310,000 of cash used for partner distributions. The investing
activities consisted of net sale proceeds of $1,765,000 and minimum
lease payments (net of interest income) of $116,000 which was partially
offset by real estate improvements of $246,000. At June 30, 1999, the
Partnership had $3,523,000 in cash reserves which has been invested
primarily in money market mutual funds.
10 of 16
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
Item 2. Management's Discussion and Analysis or Plan of Operation (Continued)
Liquidity and Capital Resources (continued)
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 properties
and a portion of expenses for the Victoria, Texas property and would be
responsible for similar expenses if other properties were to become
vacant upon the expiration of leases. The Partnership's rental and
interest income was sufficient for the six months ended June 30, 1999,
and is expected to be sufficient until expiration of the leases, to pay
all of the Partnership's operating expenses as well as to provide for
cash distributions to the partners from operations. As of June 30,
1999, Partnership distributions (paid or accrued) aggregated $255,000
(5.59 per Unit) to its limited partners.
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 exercised its right to
terminate the lease in December 1998. The Partnership is marketing this
property for sale. The Motorola lease which expired in November 1998,
was extended for another year until November 1999 at the same rental
rate.
The Partnership maintains cash reserves to enable it to make potential
capital improvements required in connection with the re-letting of the
properties. The Partnership invests its working capital reserves in
money market mutual funds.
Results of Operations
Net income increased by $48,000 for six months ended June 30, 1999, as
compared to 1998, due to an increase in revenues of $102,000 and an
increase in expenses of $54,000.
Revenues increased due to the $527,000 gain on sale of the Bowling
Green, Kentucky property during 1999, as compared to a $134,000 gain on
the sale of the Royal Oak, Michigan Property during the six months
ended June 30, 1998. With respect to the remaining properties, rental
income increased by approximately $122,000 and interest income on real
estate leases declined by $97,000 primarily due to the Victoria, Texas
property being converted to an operating lease. In addition, other
income decreased by $198,000 and interest income decreased by $7,000.
Depreciation expense increased by $21,000 primarily as a result of
reclassifying the new lease at the Victoria, Texas property as an
operating lease from a financing lease. Operating expenses increased by
approximately $33,000, due to expenses paid for the vacant properties,
as well as, a portion of the Victoria, Texas property.
11 of 16
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
Item 2. Management's Discussion and Analysis or Plan of Operation (Continued)
Year 2000
The Year 2000 Issue is the result of computer programs being written
using two digits rather than four to define the applicable year. The
Partnership is dependent upon the Managing General Partner and its
affiliates for management and administrative services. Any computer
programs or hardware that have date-sensitive software or embedded
chips may recognize a date using "00" as the year 1900 rather than the
year 2000. This could result in system failure or miscalculations
causing disruptions of operations, including, among other things, a
temporary inability to process transactions, send invoices, or engage
in similar normal business activities.
During the first half of 1998, the Managing General Partner and its
affiliates completed their assessment of the various computer software
and hardware used in connection with the management of the Partnership.
This review indicated that significantly all of the computer programs
used by the Managing General Partner and its affiliates are
off-the-shelf "packaged" computer programs which are easily upgraded to
be Year 2000 compliant. In addition, to the extent that custom programs
are utilized by the Managing General Partner and its affiliates, such
custom programs are Year 2000 compliant.
Following the completion of its assessment of the computer software and
hardware, the Managing General Partner and its affiliates began
upgrading those systems which required upgrading. To date,
significantly all of these systems have been upgraded. The Partnership
has to date not borne, nor is it expected that the Partnership will
bear, any significant costs in connection with the upgrade of those
systems requiring remediation.
To date, the Managing General Partner is not aware of any external
agent with the Year 2000 issue that would materially impact the
Partnership's results of operations, liquidity or capital resources.
However, the Managing General Partner has no means of ensuring that
external agents will be Year 2000 compliant. The Managing General
Partner does not believe that the inability of external agents to
complete their Year 2000 resolution process in a timely manner will
have a material impact on the financial position or results of
operations of the Partnership. However, the effect of non-compliance by
external agents is not readily determinable.
12 of 16
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
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:
No reports on Form 8-K were filed during the six months ended
June 30, 1999.
13 of 16
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
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/ Thomas Staples
------------------------------------
Thomas Staples
Chief Financial Officer
Dated: August 9, 1999
14 of 16
<PAGE>
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
Exhibit Index
Exhibit Page No.
------- --------
27. Financial Data Schedule -
99. Supplementary Information Required Pursuant to
Section 9.4 of the Partnership Agreement. 16
15 of 16
<PAGE>
Exhibit 99
WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
Supplementary Information Required Pursuant to Section 9.4 of the Partnership
Agreement
1. Statement of Cash Available for Distribution for the three months ended
June 30, 1999:
<TABLE>
<CAPTION>
<S> <C>
Net income $ 715,000
Add: Depreciation and amortization charged to income not
affecting cash available for distribution 23,000
Minimum lease payments received, net of interest
income earned, on leases accounted for under the
financing method 51,000
Net proceeds from sale of property 1,765,000
Less: Gain on Sale of Property (527,000)
Additions to real estate (152,000)
Reserves (1,620,000)
-------------------
Cash Available for Distribution $ 255,000
===================
Distributions allocated to General Partners $ -
===================
Distributions allocated to Limited Partners $ 255,000
===================
</TABLE>
2. Fees and other compensation paid or accrued by the Partnership to the
General Partners, or their affiliates, during the three months ended
June 30, 1999:
<TABLE>
<CAPTION>
Entity Receiving Form of
Compensation Compensation Amount
----------------------------- -------------------------------------------------- -----------------
<S> <C> <C>
Winthrop
Management LLC Property Management Fees $ 3,000
General Partners Interest in Cash Available for Distribution $ -
WFC Realty Co., Inc.
(Initial Limited Partner) Interest in Cash Available for Distribution $ 1,172
</TABLE>
16 of 16
<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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 3,523,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 5,873,000
<DEPRECIATION> (634,000)
<TOTAL-ASSETS> 8,832,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 8,495,000
<TOTAL-LIABILITY-AND-EQUITY> 8,832,000
<SALES> 0
<TOTAL-REVENUES> 1,009,000
<CGS> 0
<TOTAL-COSTS> 89,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 906,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 906,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 906,000
<EPS-BASIC> 19.08
<EPS-DILUTED> 19.08
</TABLE>
