<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 March 31, 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
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(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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WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
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FORM 10-QSB MARCH 31, 1999
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PART 1 - FINANCIAL INFORMATION
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Item 1. Financial Statements.
Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
-------------- ----------------
Assets
- ------
Real Estate:
<S> <C> <C>
Accounted for under the operating method,
at cost, net of accumulated depreciation of
$527 (1999) and $506 (1998) $ 3,979 $ 4,456
Accounted for under the operating method, at cost,
net of accumulated depreciation of $85 and held for sale 1,124 39
Accounted for under the financing method 1,294 1,975
-------------- ----------------
6,397 6,470
Other Assets:
Cash and cash equivalents 1,668 1,761
Other assets 57 69
-------------- ----------------
Total Assets $ 8,122 $ 8,300
============== ================
Liabilities and Partners' Capital
- ---------------------------------
Liabilities:
Accounts payable and accrued expenses $ 87 $ 146
Distributions payable to partners - 310
-------------- ----------------
Total Liabilities 87 456
-------------- ----------------
Partners' Capital:
Limited Partners -
Units of Limited Partnership Interest,
$500 stated value per Unit; authorized - 50,010
Units; issued and outstanding - 45,646 Units 8,430 8,254
General Partners' Deficit (395) (410)
-------------- ----------------
Total Partners' Capital 8,035 7,844
-------------- ----------------
Total Liabilities and Partners' Capital $ 8,122 $ 8,300
============== ================
</TABLE>
See notes to financial statements.
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WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
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FORM 10-QSB MARCH 31, 1999
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Statements of Income (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
For The Three Months Ended
March 31, March 31,
1999 1998
<S> <C> <C>
Income:
Rental income from real estate leases accounted
for under the operating method $ 178 $ 126
Interest on short-term investments 18 22
Interest income on real estate leases accounted
for under the financing method 59 133
Gain on sale of property - 131
Other income - 200
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Total income 255 612
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Expenses:
Depreciation and amortization 23 10
Management fees 5 5
Operating expenses 11 1
General and administrative 25 29
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Total expenses 64 45
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Net income $ 191 $ 567
============= ============
Net income allocated to general partners $ 15 $ 36
============= ============
Net income allocated to limited partners $ 176 $ 531
============= ============
Net income per Unit of Limited Partnership Interest $ 3.86 $ 11.63
============= ============
Distributions per Unit of Limited Partnership Interest $ - $ 14.11
============= ============
</TABLE>
See notes to financial statements.
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WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
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FORM 10-QSB MARCH 31, 1999
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Statements of Partners' Capital (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
Units of
Limited General Limited
Partnership Partners' Partners' Total
Interest Deficit Capital Capital
------------------ ------------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Balance - January 1, 1999 45,646 $ (410) $ 8,254 $ 7,844
Net income 15 176 191
------------------ ------------------- ------------------ -------------------
Balance - March 31, 1999 45,646 $ (395) $ 8,430 $ 8,035
================== =================== ================== ===================
</TABLE>
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WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
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FORM 10-QSB MARCH 31, 1999
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Statements of Cash Flows (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
For The Three Months Ended
March 31, March 31,
1999 1998
------------- ------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 191 $ 567
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 22 10
Amortization 1 -
Gain on sale of property - (131)
Changes in assets and liabilities:
Decrease (increase) in other assets 11 (53)
Increase in accounts payable and
accrued expenses 21 36
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Net cash provided by operating activities: 246 429
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Cash Flows From Investing Activities:
Minimum lease payments received, net of interest income
earned, on leases accounted for under the financing method 65 101
Net proceeds from sale of property - 194
Additions to real estate (94) -
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Net cash (used in) provided by investing activities (29) 295
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Cash Flows From Financing Activities:
Cash distributions (310) (152)
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Cash used in financing activities (310) (152)
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Net (decrease) increase in cash and cash equivalents (93) 572
Cash and cash equivalents, beginning of period 1,761 1,541
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Cash and cash equivalents, end of period $ 1,668 $ 2,113
============= ============
Supplemental Disclosure of Non-cash Financing
- ---------------------------------------------
Activities -
------------
Distributions declared not paid as of March 31 $ - $ 644
- ---------------------------------------------- ============= ============
</TABLE>
See notes to financial statements.
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WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
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FORM 10-QSB MARCH 31, 1999
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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. The balance sheet at December 31, 1998 was derived from
audited financial statements at such date.
The results of operations for the three months ended March 31, 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 $5,000 during each of the three months ended March 31, 1999 and
1998.
3. Contingency
The lease with respect to the Partnership's Bowling Green Kentucky property
was scheduled to expire in December 2000, and represents 26% of the
Partnership's 1998 rental income. As a result of a hailstorm causing
significant damage to this property in April 1998, Wal-Mart Stores, Inc.,
which had previously vacated the property, exercised its right under the
terms of the lease and has discontinued paying rent effective March 1,
1999. The Partnership expects to receive insurance proceeds in excess of
the residual value of this property. The Partnership is currently marketing
this property for sale and has classified this property as held for sale,
therefore no depreciation is being recorded.
4. Reclassification
Certain reclassifications have been made to the 1998 balances to conform to
the 1999 presentation.
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WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
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FORM 10-QSB MARCH 31, 1999
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Item 6. Management's Discussion and Analysis or Plan of Operation
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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; Bolivar, Ohio; and Bowling Green, Kentucky, which are currently
vacant) is leased to a single tenant pursuant to net leases with
remaining lease terms, subject to extensions, ranging between six
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 is currently vacant. In April 1998 a hailstorm caused
significant damage to this property. As a result, Wal-Mart exercised
its right under the terms of the lease and has discontinued paying rent
effective March 1, 1999. The Partnership expects to receive insurance
proceeds in excess of the residual value of the property. The
Partnership is currently marketing this property for sale.
The level of liquidity based on cash and cash equivalents experienced a
$93,000 decrease at March 31, 1999, as compared to December 31, 1998.
The Partnership's $246,000 of cash provided by operating activities,
$65,000 of lease payments received under financing leases (net of
interest income) (investing activities) were significantly offset by
$310,000 of cash used for partner distributions (financing activities)
and $94,000 of real estate improvements (investing activities). At
March 31, 1999, the Partnership had $1,668,000 in cash reserves which
has been invested primarily in money market mutual funds.
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WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
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FORM 10-QSB MARCH 31, 1999
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Item 2. Management's Discussion and Analysis or Plan of Operation (Continued)
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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 three months ended March 31,
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
March 31, 1999 there were no distributions paid or accrued to the
partners due to improvements made to Victoria, Texas property.
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 decreased by $376,000 for three months ended March 31, 1999,
as compared to 1998, due to a decrease in revenues of $357,000 and an
increase in expenses of $19,000.
Revenues decreased primarily due to the $131,000 gain on sale of the
Royal Oak, Michigan property during 1998 and a $200,000 termination fee
received in 1998 from Wal-Mart Stores for the Partnership's Victoria,
Texas property. With respect to the remaining properties, rental income
from real estate leases increased by approximately $56,000 and interest
income on real estate leases declined by $74,000 primarily due to the
Victoria, Texas property being converted to an operating lease.
Interest income decreased by approximately $4,000.
Expenses increased primarily due to a $12,000 increase in depreciation
expense 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 $10,000, due to expenses paid for
the vacant properties, as well as, a portion of the Victoria, Texas
property.
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WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
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FORM 10-QSB MARCH 31, 1999
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Item 2. Management's Discussion and Analysis or Plan of Operation (Continued)
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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. It is expected that all systems will be
remediated, tested and implemented during the first half of 1999.
To date, the Managing General Partner is not aware of any external
agent with a 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.
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WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
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FORM 10-QSB MARCH 31, 1999
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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 three months ended
March 31, 1999.
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WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
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FORM 10-QSB MARCH 31, 1999
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SIGNATURES
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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: May 13, 1999
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WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
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FORM 10-QSB MARCH 31, 1999
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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. 12
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Exhibit 99
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WINTHROP PARTNERS 80 LIMITED PARTNERSHIP
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FORM 10-QSB MARCH 31, 1999
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Supplementary Information Required Pursuant to Section 9.4 of the Partnership
Agreement
1. Statement of Cash Available for Distribution for the three months ended
March 31, 1999:
Net income $ 191,000
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 65,000
Less: Reserves for improvements and leasing costs (279,000)
------------------
Cash Available for Distribution $ -
==================
Distributions allocated to General Partners $ -
==================
Distributions allocated to Limited Partners $ -
==================
2. Fees and other compensation paid or accrued by the Partnership to the
General Partners, or their affiliates, during the three months ended March
31, 1999:
<TABLE>
<CAPTION>
Entity Receiving Form of
Compensation Compensation Amount
- ------------------------- -------------------------------------------- -----------------
<S> <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 $ -
</TABLE>
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<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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,668,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 7,009,000
<DEPRECIATION> (612,000)
<TOTAL-ASSETS> 8,122,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 8,035,000
<TOTAL-LIABILITY-AND-EQUITY> 8,122,000
<SALES> 0
<TOTAL-REVENUES> 237,000
<CGS> 0
<TOTAL-COSTS> 39,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 191,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 191,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 191,000
<EPS-PRIMARY> 3.86
<EPS-DILUTED> 3.86
</TABLE>
