SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1995 Commission File Number 0-10272
WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Maryland 04-2720493
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One International Place, Boston, MA 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 330-8600
Indicate by check mark whether the 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
PART 1 - FINANCIAL INFORMATION
STATEMENTS OF OPERATIONS
<TABLE>
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Three Months Ended Six Months Ended
June 30, June 30,
(Unaudited) (Note 1) 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Interest income $ - $ - $ - $ -
Expenses:
Amortization 1,704 1,704 3,408 3,408
Interest (Note 5) 16,391 11,997 31,796 22,258
General and administrative 30,285 26,161 34,328 27,741
48,380 39,862 69,532 53,407
Loss from operations (48,380) (39,862) (69,532) (53,407)
Equity in income of Local Limited
Partnerships (Note 4) 7,376 16,323 8,792 18,526
Net loss $(41,004) $(23,539) $(60,740) $(34,881)
Net loss allocated to General
Partners $ (2,050) $ (1,177) $ (3,037) $ (1,744)
Net loss allocated to Limited
Partners $(38,954) $(22,362) $(57,703) $(33,137)
Net Loss per Unit of Limited
Partnership Interest $ (1.52) $ (.87) $ (2.25) $ (1.29)
</TABLE>
BALANCE SHEETS
<TABLE>
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June 30, December 31,
1995 1994
June 30, 1995 and December 31, 1994 (Unaudited) (Audited)
ASSETS
<S> <C> <C>
Investments in Local Limited Partnerships (Note 4)................................... $ 1,620,502 $ 1,615,118
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses............................................. $ 431,665 $ 398,543
Loans payable to affiliate (Note 4)............................................... 666,273 633,271
1,097,938 1,031,814
Partners' Capital:
Limited Partners
Units of Limited Partnership Interest, $1,000 stated value per Unit;
25,646 units authorized, and 25,661
units issued and outstanding ............................................. 1,596,732 1,654,435
General Partners..................................................................... (1,074,168) (1,071,131)
522,564 583,304
$ 1,620,502 $ 1,615,118
</TABLE>
STATEMENTS OF CASH FLOWS
<TABLE>
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For The Six Months Ended
June 30, 1995 and 1994 (Unaudited) (Note 1) 1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net loss............................................................................ $ (60,740) $ (34,881)
Adjustments to reconcile net loss to cash provided by
operating activities:
Amortization....................................................................... 3,408 3,408
Equity in net income Local Limited Partnerships.................................... (8,792) (18,526)
Changes in assets and liabilities:
Increase in accounts payable and accrued
expenses........................................................................ 33,122 22,258
Net cash used by operating activities............................................... (33,002) (27,741)
Cash flows from financing activities:
Proceeds from loan payable.......................................................... 33,002 27,741
Net increase in cash and cash equivalents.............................................. - -
Cash and cash equivalents, beginning of period......................................... - -
Cash and cash equivalents, end of period............................................... $ - $ -
</TABLE>
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
<TABLE>
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UNITS OF
For the Six Months Ended LIMITED GENERAL LIMITED
June 30, 1995 and 1994 PARTNERSHIP PARTNERS' PARTNERS' TOTAL
(Unaudited (Note 1) INTEREST CAPITAL CAPITAL CAPITAL
<S> <C> <C> <C> <C>
Balance December 31, 1994............................ 25,646 $(1,071,131) $1,654,435 $ 583,304
Net loss............................................. (3,037) (57,703) (60,740)
Balance June 30, 1995................................ 25,646 $(1,074,168) $1,596,732 $ 522,564
Balance December 31, 1993............................ 25,646 $(1,067,731) $1,719,040 $ 651,309
Net loss............................................. (1,744) (33,137) (34,881)
Balance June 30, 1994................................ 25,646 $(1,069,475) $1,685,903 $ 616,428
</TABLE>
NOTES TO FINANCIAL STATEMENTS
June 30, 1995 (Unaudited)
1. ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein have been prepared by the
Registrant, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. The Registrant's accounting and financial
reporting policies are in conformity with generally accepted accounting
principles and include adjustments in interim periods considered necessary for a
fair presentation of the results of operations. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. It is suggested that these condensed
financial statements be read in conjunction with the financial statements and
the notes thereto included in the Registrant's latest annual report on Form
10-K.
The accompanying financial statements reflect the Partnership's results of
operations for an interim period and are not necessarily indicative of the
results of operations for the year ending December 31, 1995.
2. TAX INCOME/LOSS
The Partnership's tax income/loss for 1995 is expected to differ from that for
financial reporting purposes primarily due to accounting differences in the
recognition of construction period costs and depreciation incurred by the Local
Limited Partnerships and differences in the recognition of equity in net
income/loss of Local Limited Partnerships under the equity method of accounting
described below.
3. INVESTMENT IN LOCAL LIMITED PARTNERSHIPS
The Partnership accounts for its investment in each Local Limited Partnership on
the equity method of accounting. The investment cost (including amounts paid or
accrued) is subsequently adjusted by the Partnership's share of the Local
Limited Partnership's results of operations and by distributions received or
accrued. Costs relating to the acquisition and selection of the investment in
the Local Limited partnership are capitalized to the investment account and
amortized over the life of the investment or until the investment balance has
been written down to zero. Costs in excess of the Partnership's initial basis in
the net assets of the Local Limited Partnership are amortized over the estimated
useful lives of the underlying assets. Equity in the loss of Local Limited
Partnerships is not recognized to the extent that the investment balance would
become negative.
4. LOANS PAYABLE TO AFFILIATE
Beginning in 1986, the Partnership depleted its available reserves and as a
result borrowed amounts from First Winthrop Corporation ("First Winthrop") to
pay operating expenses and fund operating deficits at properties owned by the
Local Limited Partnerships. The borrowings from First Winthrop bear interest at
the prime rate (9.00% at June 30, 1995) plus 1%. The Partnership accrued
interest expense of $31,796 and $22,258 to First Winthrop during the six months
ended June 30, 1995 and 1994. The Partnership will meet its interest payments
and repay First Winthrop's loans from cash flow generated by the Local Limited
Partnerships or from the proceeds of any sales of real estate owned by the Local
Limited Partnerships.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Net loss for the six months ended June 30, 1995 was $60,740 compared to $34,881
for the six months ended June 30, 1994. This was the result of an increase in
loss from operations and a decrease in the Partnership's equity in income of a
local limited partnership (Copperfield). Loss from operations increased to
$69,532 for the six months ended June 30, 1995 from $53,407 for the six months
ended June 30, 1994. This was due to an increase in interest expenses and
general and administrative expenses.
One of the local limited partnerships, Candlewood, was unable to negotiate a
workout agreement with the U.S. Department of Housing and Urban Development
("HUD"), resulting in a foreclosure sale of the property in January 1995. The
Partnership will recognize a taxable gain of approximately $125 per unit in 1995
as a result of the foreclosure.
Two properties, The Villas and Windscape, had previously defaulted on their
mortgage obligations. Currently, both properties are operating under provisional
workout arrangements with HUD. The workout arrangements are both effective
February 1, 1995 through January 31, 1996. In May 1995, HUD informed the local
general partner that Windscape's mortgage will be included in an auction to take
place in the fall of 1995. The local general partner is currently corresponding
with HUD to request the Modification Agreement be executed prior to the sale of
the loan to a new mortgagee. The Modification Agreement essentially allows the
mortgagor to recast any delinquent and/or unpaid principal and interest at 7.5%
if certain conditions are met.
Shadowbrook's mortgage will be included in a HUD auction to be held in the fall
of 1995. Efforts will be made to negotiate a workout agreement with the new
mortgagee. Shadowbrook was unable to secure a new agreement with HUD subsequent
to the expiration of its prior workout agreement with HUD in December 1992.
Stonewood's mortgage loan was sold to a new mortgagee in May, 1995. Efforts are
currently being made to negotiate a workout agreement with the new mortgagee.
Stonewood defaulted on its mortgage in July 1991 but was unable to negotiate a
workout agreement with HUD.
The five remaining properties met their financial obligations during the six
months ended June 30, 1995, but did not generate sufficient revenue to
distribute any cash flow to the Partnership.
The Partnership requires cash to pay general and administrative expenses. All
cash requirements are satisfied by loans from First Winthrop.
Variations for future interim periods will occur as the operating results of the
Local Limited Partnership's change and as the Partnership sells its interests in
Local Limited Partnerships and the gains or losses are recognized.
PART II - ITEM 5 - OTHER INFORMATION
All items are inapplicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
WINTHROP RESIDENTIAL ASSOCIATES I,
A LIMITED PARTNERSHIP
(Registrant)
BY: ONE WINTHROP PROPERTIES, INC.
Managing General Partner
BY: /s/ F. X. Jacoby
F. X. Jacoby
Chief Accounting Officer
BY: /s/ Richard J. McCready
Richard J. McCready
Chief Operating Officer
DATED: August 14, 1995
SUPPLEMENTARY INFORMATION
REQUIRED PURSUANT TO SECTION 9.4 OF THE PARTNERSHIP AGREEMENT
<TABLE>
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June 30, 1995 (Unaudited)............................
1. Statement of Cash Available for Distribution
for the three months ended June 30, 1995:
<S> <C>
Net loss.......................................................................................... $(55,756)
Add: Charges to income not affecting cash available for
distribution (amortization)........................................................... 1,704
Equity in net income of Local Limited Partnerships..................................... (7,370)
Cash Available for Distribution................................................................... $ -
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, 1995:
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Entity Receiving Form of
Compensation Compensation Amount
First Winthrop Corporation Interest on Loans $11,997
</TABLE>
All other information required pursuant to Section 9.4 of the Partnership
Agreement is set forth in the attached Report on Form 10-Q or Partnership
Report.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from unaudited financial statements for the
period ending June 30, 1995 and is qualified
in its entirety by reference to such financial statements
</LEGEND>
<CIK> 0000350903
<NAME> Winthrop Residential Asso
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1.00000
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,620,502
<CURRENT-LIABILITIES> 431,665
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 522,564
<TOTAL-LIABILITY-AND-EQUITY> 1,620,502
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 69,532
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (69,532)
<INCOME-TAX> 0
<INCOME-CONTINUING> (69,532)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (60,740)
<EPS-PRIMARY> (2.250)
<EPS-DILUTED> 0.000
</TABLE>
