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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, 1997
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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
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Winthrop Residential Associates I, A Limited Partnership
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(Exact name of small business issuer as specified in its charter)
Maryland 04-2720493
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One International Place, Boston, MA 02110
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (617) 330-8600
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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
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FORM 10-QSB JUNE 30, 1997
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PART I - FINANCIAL INFORMATION
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Item 1. Financial Statements.
Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
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<S> <C> <C>
Assets
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Cash and cash equivalents $ 237 $ 280
Investment in Local Limited Partnerships 1,520 1,524
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Total Assets $ 1,757 $ 1,804
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Liabilities and Partners' Capital
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Liabilities:
Accrued expenses $ 8 $ 17
Accrued interest payable to affiliate 117 159
Loans payable to affiliate 666 666
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Total Liabilities 791 842
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Partners' Capital:
Limited Partners
Units of Limited Partnership Interest, $1,000 stated value per Unit;
25,676 units authorized; and 25,595
units issued and outstanding 2,018 2,014
General Partners (Deficit) (1,052) (1,052)
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Total Partners' Capital 966 962
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Total Liabilities and Partners' Capital $ 1,757 $ 1,804
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</TABLE>
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
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FORM 10-QSB JUNE 30, 1997
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Statements of Income (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
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<S> <C> <C> <C> <C>
Income:
Income from Local Limited Partnership
cash distributions $ -- $ 287 $ 80 $ 637
Equity in net loss of Local Limited
Partnerships (2) (21) -- (15)
Interest 4 2 7 3
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Total income 2 268 87 625
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Expenses:
Amortization 2 2 4 4
Interest 16 16 31 31
General and administrative 36 61 40 78
Management fees -- 10 8 10
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Total expenses 54 89 83 123
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Net (loss) income $ (52) $ 179 $ 4 $ 502
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Net (loss) income allocated to general partners $ (3) $ 9 $ -- $ 25
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Net (loss) income allocated to limited partners $ (49) $ 170 $ 4 $ 477
============== ============== ============== ==============
Net (loss) income per Unit of Limited
Partnership Interest $ (1.91) $ 6.64 $ 0.16 $ 18.64
============== ============== ============== ==============
</TABLE>
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
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FORM 10-QSB JUNE 30, 1997
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Statement of Partners' Capital (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
Units of
Limited General Limited Total
Partnership Partners' Partners' Partners'
Interest (Deficit) Capital Capital
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<S> <C> <C> <C> <C>
Balance - January 1, 1997 25,595 $ (1,052) $ 2,014 $ 962
Net Income -- 4 4
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Balance - June 30, 1997 25,595 $ (1,052) $ 2,018 $ 966
==================== =================== =================== ====================
</TABLE>
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
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FORM 10-QSB JUNE 30, 1997
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Statements of Cash Flows (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
For the Six Months Ended
June 30, 1997 June 30, 1996
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<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 4 $ 502
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Amortization 4 4
Equity in net loss of Local Limited Partnerships -- 15
Changes in assets and liabilities:
(Decrease) in accrued interest payable to
affiliate (42) (318)
(Decrease) increase in accrued expenses (9) 30
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Net cash (used in) provided by operating activities (43) 233
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Net (decrease) increase in cash and cash equivalents (43) 233
Cash and cash equivalents, beginning of period 280 111
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Cash and cash equivalents, end of period $ 237 $ 344
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Supplemental Disclosure of Cash Flow Information:
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Cash paid for interest $ 73 $ 350
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</TABLE>
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
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FORM 10-QSB JUNE 30, 1997
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NOTES TO FINANCIAL STATEMENTS
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(Unaudited)
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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, 1996.
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, 1996 was derived from
audited financial statements at such date.
The results of operations for the six months ended June 30, 1997 and 1996
are not necessarily indicative of the results to be expected for the full
year.
2. Related Party Transactions
The $666,000 owed to First Winthrop bears interest at the prime rate (8.5%
at June 30, 1997) plus 1%. Interest expense related to such borrowings was
$31,000 for each of the six months ended June 30, 1997 and 1996.
Management fees earned by an affiliate of the Managing General Partner
totaled $8,000 and $10,000 for the six months ended June 30, 1997 and 1996,
respectively.
3. Subsequent Event
During July 1997, the Local Limited Partnership owning the Heritage Hills
Townhouses sold the property. The Partnership received approximately
$500,000 in distributions regarding the sale. The Local Limited
Partnerships investment account had a zero balance at the date of sale.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
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FORM 10-QSB JUNE 30, 1997
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Item 6. Management's Discussion and Analysis or Plan of Operation
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This Item should be read in conjunction with the financial
statements and other items contained elsewhere in the report.
Liquidity and Capital Resources
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As of June 30, 1997, the Partnership retained an equity interest in
seven Local Limited Partnerships.
The level of liquidity based on cash and cash equivalents
experienced a $43,000 decrease for the six months ended June 30,
1997, as compared to December 31, 1996, primarily due to the
payment of accrued interest to an affiliate of $42,000. 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 and 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,
loans from an affiliate of the Managing General Partner and cash
reserves.
At June 30, 1997, the outstanding principal and accrued interest
balance on the loans payable to an affiliate of the Managing
General Partner was $783,000. The Partnership will be unable to
fully repay this indebtedness 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 to provide sufficient 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 1997.
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 judgement 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.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
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FORM 10-QSB JUNE 30, 1997
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Item 6. Management's Discussion and Analysis or Plan of Operation
(Continued)
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Liquidity and Capital Resources (Continued)
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During July 1997, the Local Limited Partnership owning the Heritage
Hills Townhouses sold the property. The Partnership received
approximately $500,000 in distributions from the sale and intends
to repay the accrued interest and a portion of the principal
balance of the loans payable to an affiliate with the proceeds. The
Local Limited Partnership investment account had a zero balance at
the date of sale. The partners of the Partnership, as owners of the
Local Limited Partnership, will incur a tax liability due to the
recapture of the benefits taken in prior years.
On September 1, 1996, the Local Limited Partnership owning The
Villas Apartments signed a provisional workout agreement, expiring
August 31, 1997, with the U.S. Housing and Urban Development
Corporation ("HUD"). If HUD does not extend such workout agreement
on August 31, 1997, the property could be lost through foreclosure.
If HUD sells the mortgage, the provisional workout agreement may be
terminated by the new lender.
Results of Operations
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Net income decreased for the six months ended June 30, 1997 by
$498,000, as compared to 1996, due to a decrease in cash
distributions of $557,000 received from Local Limited Partnerships.
In 1996, $637,000 was received from three Local Limited
Partnerships (Shadowbrook $494,000, Lynwood $101,000, and Stonewood
$42,000). The Shadowbrook and Stonewood Apartment properties were
lost through foreclosure during 1996 and accordingly no additional
distributions will be received from these Local Limited
Partnerships. For the six months ended June 30, 1997, $80,000 was
received from the Local Limited Partnership owning the Lynnwood
property. Expenses decreased by $40,000 for the six months ended
June 30, 1997, as compared to 1996, primarily due to a decrease in
general and administrative expenses of $38,000 attributable to
costs associated with the Shadowbrook foreclosure during 1996.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
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FORM 10-QSB JUNE 30, 1997
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Part II - Other Information
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Item 6. Exhibits and Reports on Form 8-K.
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(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, 1997.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
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FORM 10-QSB JUNE 30, 1997
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SIGNATURES
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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
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Michael L. Ashner
Chief Executive Officer
BY: /s/ Edward V. Williams
--------------------------------
Edward V. Williams
Chief Financial Officer
Dated: August 4, 1997
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
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JUNE 30, 1997
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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
11 of 12
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Exhibit 99
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
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FORM 10-QSB JUNE 30, 1997
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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 June 30, 1997:
Net loss $ (52,000)
Add: Amortization 2,000
Cash from reserves 52,000
Less: Equity in (loss) of Local Limited Partnership (2,000)
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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, 1997:
Entity Receiving Form of
Compensation Compensation Amount
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First Winthrop Corporation Interest on Loans $ 16,000
WP Management Co., Inc. Management Fees $ --
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-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 237,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,757,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 966,000
<TOTAL-LIABILITY-AND-EQUITY> 1,757,000
<SALES> 0
<TOTAL-REVENUES> 80,000
<CGS> 0
<TOTAL-COSTS> 12,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31,000
<INCOME-PRETAX> 4,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 4,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,000
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
</TABLE>
