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SECURITIES AND EXCHANGE COMMISSION
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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 September 30, 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
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 SEPTEMBER 30, 1999
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
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<S> <C> <C>
Assets
Cash and cash equivalents $ 463 $ 455
Note receivable and accrued interest 114 107
Investment in Local Limited Partnership 295 329
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Total Assets $ 872 $ 891
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Liabilities and Partners' Capital
Liabilities:
Accrued expenses $ 11 $ 9
Loan payable and accrued interest - affiliate 347 328
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Total Liabilities 358 337
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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 1,607 1,645
General Partners deficit (1,093) (1,091)
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Total Partners' Capital 514 554
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Total Liabilities and Partners' Capital $ 872 $ 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 SEPTEMBER 30, 1999
Statements of Income (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
For the Three Months Ended For The Nine Months Ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Income:
Income from Local Limited Partnership
cash distributions $ - $ - $ 73 $ 74
Equity in loss of Local Limited
Partnership - (21) (34) (21)
Interest 6 8 18 12
Loss on sale of investment in
Local Limited Partnership - (23) - (23)
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Total income (loss) 6 (36) 57 42
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Expenses:
Interest 7 8 19 21
General and administrative 28 27 78 81
Management fees - - - 5
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Total expenses 35 35 97 107
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Net loss $ (29) $ (71) $ (40) $ (65)
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Net loss allocated to General Partners $ (1) $ (2) $ (2) $ (2)
====== ======= ======= =======
Net loss allocated to Limited Partners $ (28) $ (69) $ (38) $ (63)
====== ======= ======= =======
Net loss per Unit of Limited
Partnership Interest $(1.09) $(2.70) $(1.48) $(2.46)
====== ======= ======= =======
</TABLE>
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1999
Statements of Partners' Capital (Unaudited)
(In Thousands, Except Unit Data)
Units of
Limited General Limited
Partnership Partners' Partners' Total
Interest Deficit Capital Capital
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Balance - January 1, 1999 25,595 $(1,091) $1,645 $554
Net Loss (2) (38) (40)
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Balance - September 30, 1999 25,595 $(1,093) $1,607 $514
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1999
Statements of Cash Flows (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
For The Nine Months Ended
September 30, September 30,
1999 1998
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<S> <C> <C>
Cash Flows From Operating Activities:
Net loss $ (40) $(65)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Equity in loss of Local Limited Partnership 34 21
Loss on sale of investment in Local Limited Partnership - 23
Changes in assets and liabilities:
Increase in accrued interest receivable (7) -
Increase (decrease) in accrued expenses 2 (2)
Increase in accrued interest payable 19 21
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Net cash provided by (used in) operating activities 8 (2)
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Cash Flows From Investing Activities:
Expenses relating to sale of investment in Local
Limited Partnership - (2)
Collections of note receivable - 70
Distributions received from Local Limited Partnership - 150
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Net cash provided by investing activities - 218
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Net increase in cash and cash equivalents 8 216
Cash and cash equivalents, beginning of period 455 251
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Cash and cash equivalents, end of period $ 463 $ 467
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</TABLE>
See notes to financial statements.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 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
September 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 nine months ended September 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 SEPTEMBER 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 September 30, 1999, the Partnership retained an equity
interest in six Local Limited Partnerships. The level of liquidity
based on cash and cash equivalents experienced an $8,000 increase
from cash provided by operating activities for the nine months
ended September 30, 1999, as compared to December 31, 1998. At
September 30, 1999, the Partnership had $463,000 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 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 $347,000 at September 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 SEPTEMBER 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 received a notice of default and
foreclosure sale from HUD. The foreclosure proceedings are expected
to occur in the fourth quarter of 1999. 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 SEPTEMBER 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 loss decreased by $25,000 to a net loss of $40,000 for the nine
months ended September 30, 1999 as compared to the comparable
period in 1998, due to an increase in income of $15,000 and a
decrease in expenses of $10,000. Net loss for three months ended
September 30, 1999 decreased by $42,000 as compared to the three
months ended September 30, 1998, due to an increase in income of
$42,000.
Income for the nine months ended September 30, 1999, as compared to
1998, increased primarily because there was a loss on sale of
investment in a Local Limited Partnership of $23,000 recorded in
1998. In addition, there was an increase in interest income of
$6,000 which was due to higher cash reserves. These amounts were
partially offset by an increase in the equity in loss of a Local
Limited Partnership of $13,000. Expenses decreased due to a
decrease in interest, management fees and general and
administrative expenses.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 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 period ended
September 30, 1999.
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WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 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
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Michael L. Ashner
Chief Executive Officer
BY: /s/ Thomas C. Staples
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Thomas C. Staples
Chief Financial Officer
Dated: November 10, 1999
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Exhibit 99
WINTHROP RESIDENTIAL ASSOCIATES I, A LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 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 September 30, 1999:
Net loss $(29,000)
Add: Cash from reserves 29,000
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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
September 30, 1999:
Entity Receiving Form of
Compensation Compensation Amount
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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>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 463,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 872,000
<CURRENT-LIABILITIES> 0
<BONDS> 289,000
0
0
<COMMON> 0
<OTHER-SE> 514,000
<TOTAL-LIABILITY-AND-EQUITY> 872,000
<SALES> 0
<TOTAL-REVENUES> 39,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,000
<INCOME-PRETAX> (40,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (40,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (40,000)
<EPS-BASIC> (1.48)
<EPS-DILUTED> (1.48)
</TABLE>
