<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 June 30, 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 0-10272
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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
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, 1999
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
-------------------- --------------------
<S> <C> <C>
Assets:
Cash and cash equivalents $ 482 $ 455
Note receivable and accrued interest 112 107
Investment in Local Limited Partnership 296 329
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Total Assets $ 890 $ 891
==================== ====================
Liabilities and Partners' Capital
Liabilities:
Accrued expenses $ 7 $ 9
Loan payable and accrued interest - affiliate 340 328
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Total Liabilities 347 337
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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 1,635 1,645
General Partners deficit (1,092) (1,091)
-------------------- --------------------
Total Partners' Capital 543 554
-------------------- --------------------
Total Liabilities and Partners' Capital $ 890 $ 891
==================== ====================
</TABLE>
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
Statements of Income (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
For the Three Months Ended For The Six Months Ended
--------------------------------- -------------------------------
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
--------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
Income:
Income from Local Limited Partnership
cash distributions $ 73 $ 51 $ 73 $ 74
Equity in loss of Local Limited
Partnership (25) (2) (34) -
Interest 7 2 12 4
--------------- --------------- -------------- --------------
Total income 55 51 51 78
--------------- --------------- -------------- --------------
Expenses:
Interest 6 6 12 13
General and administrative 24 35 50 54
Management fees - 5 - 5
--------------- --------------- -------------- --------------
Total expenses 30 46 62 72
--------------- --------------- -------------- --------------
Net income (loss) $ 25 $ 5 $ (11) $ 6
============== =============== ============== ==============
Net income (loss) allocated to General Partners $ 1 $ - $ (1) $ -
============== =============== ============== ==============
Net income (loss) allocated to Limited Partners $ 24 $ 5 $ (10) $ 6
============== =============== ============== ==============
Net income (loss) per Unit of Limited
Partnership Interest $ .94 $ .19 $ (.39) $ .23
============== =============== ============== ==============
</TABLE>
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
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 25,595 $ (1,091) $ 1,645 $ 554
--------------- ---------------- --------------- ---------------
Net Loss (1) (10) (11)
--------------- ---------------- --------------- ---------------
Balance - June 30, 1999 25,595 $ (1,092) $ 1,635 $ 543
=============== ================ =============== ===============
</TABLE>
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
Statements of Cash Flows (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
For The Six Months Ended
June 30, June 30,
1999 1998
------------ ------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net (loss) income $ (11) $ 6
Adjustments to reconcile net (loss) income to net cash provided
by operating activities:
Equity in loss of Local Limited Partnership 34 -
Changes in assets and liabilities:
Increase in accrued interest receivable (5) -
Decrease in accrued expenses (2) (3)
Increase in accrued interest payable 11 14
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Net cash provided by operating activities 27 17
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Net increase in cash and cash equivalents 27 17
Cash and cash equivalents, beginning of period 455 251
-------------------- --------------------
Cash and cash equivalents, end of period $ 482 $ 268
==================== ====================
</TABLE>
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 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 June 30, 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 and six months ended June 30,
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 JUNE 30, 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 June 30, 1999, the Partnership retained an equity interest
in six Local Limited Partnerships. The level of liquidity based
on cash and cash equivalents experienced a $27,000 increase from
cash used in operating activities for the six months ended June
30, 1999, as compared to December 31, 1998. At June 30, 1999, the
Partnership had $482,000 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 $340,000 at June 30, 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 JUNE 30, 1999
Item 2. Management's Discussion and Analysis or Plan of Operation
(Continued)
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
have begun foreclosure proceedings. For financial reporting
purposes, the Partnership's investment in this Local Limited
Partnership had previously been written-down to zero. For tax
reporting purposes, the Partnership will incur a tax liability
due to the recapture of tax benefits taken in prior years in
proportion to its ownership interest in the Local Limited
Partnership.
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.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1999
Item 2. Management's Discussion and Analysis or Plan of Operation
(Continued)
Year 2000 (Continued)
To date, neither Coordinated Services or the General Partner is
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 $17,000 to a net loss of $11,000 for the
six months ended June 30, 1999 as compared to the comparable
period in 1998, due to a decrease in income of $27,000 and a
decrease in expenses of $10,000. Net income for three months
ended June 30, 1999 increased by $20,000 as compared to the three
months ended June 30, 1998, due to an increase in income of
$4,000 and a decrease in expenses of $16,000.
Income for the six months ended June 30, 1999, as compared to
1998, declined primarily due to the equity in income of a Local
Limited Partnership which decreased to a loss of $34,000. This
amount was partially offset by an increase in interest income of
$8,000 which was due to higher cash reserves. Expenses decreased
primarily due to a decrease in management fees and general and
administrative expenses.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 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 six months
ended June 30, 1999.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 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
--------------------------
Michael L. Ashner
Chief Executive Officer
BY: /s/ Thomas C. Staples
--------------------------
Thomas C. Staples
Chief Financial Officer
Dated: August 13, 1999
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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>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 482,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 890,000
<CURRENT-LIABILITIES> 0
<BONDS> 289,000
<COMMON> 0
0
0
<OTHER-SE> 543,000
<TOTAL-LIABILITY-AND-EQUITY> 890,000
<SALES> 0
<TOTAL-REVENUES> 39,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,000
<INCOME-PRETAX> (11,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (11,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11,000)
<EPS-BASIC> (.39)
<EPS-DILUTED> (.39)
</TABLE>
<PAGE>
Exhibit 99
WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 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 June 30, 1999:
Net income $ 25,000
Add: Equity in loss of Local Limited Partnership 34,000
Cash to reserves (59,000)
---------
Cash Available for Distribution $ -
=========
2. Fees and other compensation paid or accrued by the
Partnership to the General Partners, or their affiliates,
during the six months ended June 30, 1999:
<TABLE>
<CAPTION>
Entity Receiving Form of
Compensation Compensation Amount
- ----------------------------------------- ------------------------------------- ----------------
<S> <C> <C>
None
</TABLE>
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