<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, 1996
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 0-10272
Winthrop Residential Associates I, A Limited Partnership
(Exact name of small business issuer 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 office) (Zip Code)
Registrant's telephone number, including area code (617) 330-8600
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 RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB - JUNE 30, 1996
PART - I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets (Unaudited)
(In Thousands, Except Unit Data) June 30, December 31,
1996 1995
-------- ------------
Assets
Cash $ 344 $ 111
------- --------
Investment in Local Limited Partnerships 1,585 1,605
------- --------
Total Assets $ 1,929 $ 1,716
======= =======
Liabilities and Partners' Capital
Liabilities:
Accrued expenses $ 30 --
Accrued interest payable to affiliate 128 447
Loans payable to affiliate 666 666
------- -------
Total Liabilities 824 1,113
------- -------
Partners' Capital:
Limited Partners
Units of Limited Partnership Interest, $1,000
stated value per Unit; 25,676 units
authorized; and 25,595 2,150 1,673
General Partners (deficit) (1,045) (1,070)
------- -------
Total Partners' capital 1,105 603
------- -------
Total Liabilities and Partners' capital $ 1,929 $ 1,716
======= =======
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB - JUNE 30, 1996
<TABLE>
<CAPTION>
Statements of Operations (Unaudited)
(In Thousands) For the Three For the Six
Months Ended Months Ended
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Income:
Income from Local Limited Partnership
cash distributions $ 287 $ -- $ 637 $ --
Equity in net (loss) income of Local
Limited Partnerships (21) (7) (15) 9
Interest 2 -- 3 --
----- ------ ------ ------
Total income 268 (7) 625 9
----- ------ ------ ------
Expenses:
Amortization 2 2 4 4
Interest 16 16 31 31
General and administrative 61 30 78 34
Management fees 10 -- 10 --
----- ------ ------ ------
Total expenses 89 48 123 69
----- ------ ------ ------
Net income (loss) $ 179 $ (55) $ 502 $ (60)
===== ====== ====== ======
Net income (loss) per Unit of Limited
Partnership Interest $6.64 $(2.03) $18.64 $(2.22)
===== ====== ======= ======
</TABLE>
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB - JUNE 30, 1996
Statement of Changes in Partners' Capital (Unaudited)
(In Thousands, Except Unit Data)
Units of
Limited General Limited Total
Partnership partner's partners' partners'
Interest (deficit) capital capital
----------- --------- --------- ---------
Balance - January 1, 1996 25,595 $(1,070) $1,673 $ 603
Net Income 25 477 502
------ ------- ------ ------
Balance - June 30, 1996 25,595 $(1,045) $2,150 $1,105
====== ======= ====== ======
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB - JUNE 30, 1996
Statements of Cash Flows (Unaudited)
(In Thousands) For the Six Months Ended
June 30, 1996 June 30, 1995
------------- -------------
Cash Flows from Operating Activities:
Net income (loss) $ 502 $(60)
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Amortization 4 4
Equity in net loss (income) of Local
Limited Partnerships 15 (9)
Changes in assets and liabilities:
(Decrease) increase in accrued interest
payable to affiliate (318) 32
Increase in accrued expenses 30 --
----- ----
Net cash provided by (used in) operating
activities 233 (33)
----- ----
Cash Flows From Financing Activities:
Proceeds from loan payable -- 33
----- ----
Cash provided by financing activities: -- 33
----- ----
Net increase in cash 233 --
Cash, beginning of period 111 --
----- ----
Cash, end of period $ 344 $ --
===== ====
Supplemental disclosure of cash flow
information:
Cash paid for interest $ 350 $ --
===== ====
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB - JUNE 30, 1996
Notes to Financial Statements
(Unaudited)
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-K for the
year ended December 31, 1995.
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. Certain amounts have been reclassified to conform to the
June 30, 1996 presentation. The balance sheet at December 31, 1995 was
derived from audited financial statements at such date.
The results of operations for the three and six months ended June 30, 1996
and 1995 are not necessarily indicative of the results to be expected for the
full year.
2. Related Party Transactions
The Partnership had depleted its available reserves and, as a result,
borrowed amounts from 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 (8.25% at June
30, 1996) plus 1%. Interest expense related to such borrowings was $31,000
during the six months ended June 30, 1996 and June 30, 1995, respectively.
The Partnership paid $350,000 of accrued interest to First Winthrop during
the six months ended June 30, 1996.
Management fees paid by the Partnership to an affiliate of the Managing
General Partner, totaled $10,000 for the six months ended June 30, 1996.
3. Foreclosure of Real Estate
The mortgage encumbering Stonewood Associates Ltd. ("Stonewood") was
foreclosed upon in March 1996. The carrying value on the books of the
Partnership of this investment was zero at the time of foreclosure.
4. Subsequent Event
The mortgage encumbering Louisiana Housing Partners ("Shadowbrook") was
effectively deeded in lieu of foreclosure to the lender in August 1996. The
carrying value on the books of the Partnership of this investment was zero at
the time of foreclosure.
6 of 12
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB - JUNE 30, 1996
Item 2. Management's Discussion and Analysis or Plan of Operation
This Item should be read in conjunction with the financial statements
and other items contained elsewhere in the report.
Liquidity and Capital Resources
As of June 30, 1996, the Partnership retained an equity interest in
eight Local Limited Partnerships. On March 14, 1996, the Stonewood
Apartments property was foreclosed upon by the lender. In August 1996
the Shadowbrook Apartments property was also effectively foreclosed upon
by its lender.
The level of liquidity based on cash and cash equivalents experienced a
$233,000 increase at June 30, 1996, as compared to December 31, 1995,
resulting from $637,000 in distributions received from Local Limited
Partnerships which was partially offset by the payment of $350,000 in
accrued interest to an affiliate of the Managing General Partner (see
Item 1, Note 2). The bulk ($536,000) of these distributions were from
the Shadowbrook and Stonewood Apartment properties which were lost to
foreclosure. The Partnership invests its working capital reserves in a
money market mutual fund.
The Partnership's primary source of income is distributions from the
Local Limited Partnerships. The Partnership requires cash to pay
management fees, general and administrative expenses or to make capital
contributions to any of the Local Limited Partnerships which the
Managing General Partner deems to be in the Partnership's best interest
to preserve its ownership interest. To date, all cash requirements have
been satisfied by interest income, cash distributed by the Local Limited
Partnerships to the Partnership or by loans from an affiliate of the
Managing General Partner.
At June 30, 1996, the outstanding principal and accrued interest balance
on the loans payable to an affiliate of the Managing General Partner was
$794,000. The Partnership will be unable to fully repay this
indebtedness and continue to fund its general and administrative
expenses until such time as (i) the operating results of any or all of
the Local Limited Partnerships improve sufficiently to provide cash
distributions to the Partnership, or (ii) any or all of the properties
owned by the Local Limited Partnerships can be sold at a price
sufficient to provide net sales proceeds to the Partnership. In
addition, any future contributions by the Partnership to the Local
Limited Partnerships would have to be funded by additional affiliate
loans. Neither the Managing General Partner or its affiliates has an
obligation to fund any loan amounts required. The Partnership does not
expect to make cash distributions to its partners in 1996.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB - JUNE 30, 1996
Item 2. Management's Discussion and Analysis or Plan of Operation
Liquidity and Capital Resources (Continued)
The Partnership does not intend to make advances to fund future
operating deficits incurred by any Local Limited Partnership, but
retains its prerogative to exercise business judgment to reverse this
position if circumstances change. Moreover, the Partnership is not
obligated to provide any additional funds to the Local Limited
Partnerships to fund operating deficits. If a Local Limited Partnership
sustains continuing operating deficits and has no other sources of
funding, it is likely that it will eventually default on its mortgage
obligations and risk a foreclosure on its property by the lender. If a
foreclosure were to occur, the Local Limited Partnership would lose its
investment in the property and would incur a tax liability due to the
recapture of tax benefits taken in prior years. The Partnership, as an
owner of the Local Limited Partnership, would share these consequences
in proportion to its ownership interest in the Local Limited
Partnership.
The Local Limited Partnerships owning the Stonewood and Shadowbrook
Apartments lost their properties to lenders in March 1996 and August
1996, respectively. The aggregate amount of income which the Partnership
expects to be recaptured for income tax purposes is estimated to be $10
million (approximately $370 per limited partnership Unit).
Results of Operations
Net income increased for the six and three months ended June 30, 1996 by
$562,000 and $234,000, respectively, as compared to 1995, due to cash
distributions received from three Local Limited Partnerships
(Shadowbrook $494,000, Lynwood $101,000 and Stonewood $42,000). No
distributions from Local Limited Partnerships were received by the
Partnership for the six months ended 1995. The Shadowbrook and Stonewood
Apartment properties have been lost through foreclosure and accordingly
no additional distributions will be received from them. Expenses
increased by $54,000 for the six months ended June 30, 1996, as compared
to the comparable period in 1995, primarily due to an increase in
general and administrative expenses of $44,000. General and
administrative expenses increased due to costs associated with the
Shadowbrook foreclosure and an increase in professional fees and related
costs.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB - JUNE 30, 1996
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
June 30, 1996.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB - JUNE 30, 1996
SIGNATURE
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/ Michael L. Ashner
Michael L. Ashner
Chief Executive Officer
BY: /s/ Edward V. Williams
Edward V. Williams
Chief Financial Officer
Dated: August 13, 1996
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
JUNE 30, 1996
Exhibit Index
Exhibit Page No.
------- --------
27. Financial Data Schedule --
99. Supplementary Information Required Pursuant to
Section 9.4 of the Partnership Agreement. 12
11 of 12
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Exhibit 99
WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
JUNE 30, 1996
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, 1996:
Net Income $ 179,000
Add: Amortization 2,000
Equity in net loss of local Limited
Partnerships 21,000
Less: Cash to reserves (202,000)
---------
Cash available for distribution $ 0
=========
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, 1996:
Entity Receiving Form of
Compensation Compensation Amount
---------------- ------------------------ ------
First Winthrop Corporation Interest on Loans $16,000
Winthrop Management Property Management Fees $10,000
12 of 12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Winthrop
Residential Associates I, A 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-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 344,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,929,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1,105,000
<TOTAL-LIABILITY-AND-EQUITY> 1,929,000
<SALES> 0
<TOTAL-REVENUES> 622,000
<CGS> 0
<TOTAL-COSTS> 14,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31,000
<INCOME-PRETAX> 502,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 502,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 502,000
<EPS-PRIMARY> 18.64
<EPS-DILUTED> 18.64
</TABLE>
