<PAGE>
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
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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)
Five Cambridge Center, Cambridge, MA 02142-1493
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (617) 234-3000
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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
FORM 10-QSB MARCH 31, 1999
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
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<S> <C> <C>
Assets
Cash and cash equivalents $ 430 $ 455
Note receivable and accrued interest 110 107
Investment in Local Limited Partnership 320 329
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Total Assets $ 860 $ 891
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Liabilities and Partners' Capital
Liabilities:
Accrued expenses $ 8 $ 9
Loan payable and accrued interest - affiliate 334 328
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Total Liabilities 342 337
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Partners' Capital:
Limited Partners -
Units of Limited Partnership Interest, $1,000
stated value per unit; 25,676 units authorized;
25,595 units issued and outstanding 1,611 1,645
General Partners deficit (1,093) (1,091)
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Total Partners' Capital 518 554
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Total Liabilities and Partners' Capital $ 860 $ 891
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</TABLE>
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1999
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/(Loss):
Income from Local Limited Partnership
cash distributions $ - $ 23
Equity in (loss) income of Local Limited
Partnership (9) 2
Interest 5 2
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Total (Loss) Income (4) 27
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Expenses:
Interest 6 7
General and administrative 26 19
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Total expenses 32 26
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Net (loss) income $ (36) $ 1
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Net loss allocated to General Partners $ (2) $ -
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Net (loss) income allocated to Limited Partners $ (34) $ 1
===================== =====================
Net (loss) income per Unit of Limited Partnership Interest $ (1.33) $ .04
===================== =====================
</TABLE>
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1999
Statements 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
---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Balance - January 1, 1999 25,595 $ (1,091) $ 1,645 $ 554
Net loss (2) (34) (36)
---------------- --------------- --------------- ---------------
Balance - March 31, 1999 25,595 $ (1,093) $ 1,611 $ 518
================ =============== =============== ===============
</TABLE>
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1999
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 (loss) income $ (36) $ 1
Adjustments to reconcile net (loss) income to net cash (used in)
provided by operating activities:
Equity in (loss) income of Local Limited Partnership 9 (2)
Changes in assets and liabilities:
Increase in accrued interest receivable (3) -
(Decrease) increase in accrued expenses (1) 12
Increase in accrued interest payable 6 -
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Net cash (used in) provided by operating activities (25) 11
--------------------- ---------------------
Net (decrease) increase in cash and cash equivalents (25) 11
Cash and cash equivalents, beginning of period 455 251
--------------------- ---------------------
Cash and cash equivalents, end of period $ 430 $ 262
===================== =====================
</TABLE>
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 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. Certain amounts have been reclassified to conform to the
March 31, 1999 presentation. 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.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 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
As of March 31, 1999, the Partnership retained an equity interest
in six Local Limited Partnerships. The level of liquidity based on
cash and cash equivalents experienced a $25,000 decrease from cash
used in operating activities for the three months ended March 31,
1999, as compared to December 31, 1998. At March 31, 1999, the
Partnership had $430,000 in cash and cash equivalents, which has
been invested primarily in short-term certificates of deposit and
money market accounts.
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 or
by loans.
The loan payable to an affiliate of the Managing General Partner
which bears interest at prime plus 1% is repayable from cash flows
generated by the Local Limited Partnerships and the proceeds of any
sales of real estate owned by the Local Limited Partnerships. The
outstanding principal balance and accrued interest on the loan was
approximately $334,000 at March 31, 1999. The Partnership did not
make cash distributions to its partners during 1999 or 1998.
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.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1999
Item 2. Management's Discussion and Analysis or Plan of Operation
Liquidity and Capital Resources (Continued)
The Local Limited Partnership which owns The Villas Apartments
previously entered into a provisional workout agreement with the
U.S. Department of Housing and Urban Development ("HUD"). This
agreement expired on December 30, 1998. The general partner of the
Local Limited Partnership has been notified by HUD that they will
begin foreclosure proceedings. The Partnership's investment in this
Local Limited Partnership had previously been written-down to zero.
The Cedar Lake Ltd. Local Limited Partnership, which owns Albany
Landings Apartments, has incurred significant operating losses and
cash flow deficits. If operations at the property do not improve,
this property may be lost through foreclosure. The Partnership's
investment in this Local Limited Partnership had previously been
written-down to zero.
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 Registrant is dependent upon the General Partner and its
affiliates and Coordinated Services 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 a 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, Coordinated Services, the General
Partner and its affiliates completed their assessment of the
various computer software and hardware used in connection with the
management of the Registrant. 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, Coordinated Services, the General Partner and its
affiliates began upgrading those systems which required upgrading.
To date, significantly all of these systems have been upgraded. The
Registrant has to date not borne, nor is it expected that the
Registrant 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.
8 of 12
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1999
Item 2. Management's Discussion and Analysis or Plan of Operation
Year 2000 (Continued)
To date, neither Coordinated Services or the General Partner are
aware of any external agent with a Year 2000 issue that would
materially impact the Registrant'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 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 Registrant. However, the effect of
non-compliance by external agents is not readily determinable.
Results of Operations
Net income decreased by $37,000 to a net loss of $36,000 for the
three months ended March 31, 1999, as compared to the comparable
period in 1998, due to a decrease in income of $31,000 and an
increase in expenses of $6,000.
Income declined primarily due to the Partnership not receiving any
cash distributions from any Local Limited Partnerships. During the
three months ended March 31, 1998, the Partnership received
residual cash distributions of $23,000 from the Shadowbrook
property which was lost through foreclosure during 1996. In
addition, the Partnership's equity in income of a Local Limited
Partnership decreased by $11,000 to a loss of 9,000. These amounts
were offset by an increase in interest income of $3,000 which was
due to higher cash reserves. Expenses increased primarily due to an
increase in professional fees.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1999
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit 27
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 March 31, 1999.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1999
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
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/ Thomas C. Staples
-------------------------------
Thomas C. Staples
Chief Financial Officer
Dated: May 13, 1999
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<PAGE>
Exhibit 99
WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 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 March 31, 1999:
Net loss $ (36,000)
Add: Equity in loss of Local Limited Partnership 9,000
Cash from reserves 27,000
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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 March 31, 1999:
Entity Receiving Form of
Compensation Compensation Amount
-------------------------- ------------------ ----------------
None
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<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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 430,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 860,000
<CURRENT-LIABILITIES> 0
<BONDS> 289,000
<COMMON> 0
0
0
<OTHER-SE> 518,000
<TOTAL-LIABILITY-AND-EQUITY> 860,000
<SALES> 0
<TOTAL-REVENUES> (9,000)
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,000
<INCOME-PRETAX> (36,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (36,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (36,000)
<EPS-PRIMARY> (1.33)
<EPS-DILUTED> (1.33)
</TABLE>
