As filed with the Securities and Exchange Commission on March 1, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) February 15, 1996
WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Its Charter)
Massachusetts
(State or Other Jurisdiction of organization)
0-10404 04-2720480
(Commission File Number) (I.R.S. Employer Identification No.)
One International Place, Boston, Massachusetts 02110
(Address of Principal Executive Offices) (Zip Code)
(617) 330-8600
(Registrant's Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
Pursuant to the terms of Registrant's partnership
agreement, Registrant is mailing to its limited partners its
financial statements for the year ended December 31, 1995.
Item 7 Financial Statements, Pro Forma Financial Statements
and Exhibits.
(c) Exhibits.
19. Letter to Limited Partners dated February
14, 1996
SIGNATURES
Pursuant to the requirement of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
WINTHROP PARTNERS 81 LIMITED
PARTNERSHIP
By: One Winthrop Properties, Inc.,
Managing General Partner
Date: March 1 1996 By:_/s/Carol C.J. Mills___
Carol C.J. Mills
Vice President
To the Limited Partners of
WINTHROP PARTNERS 81 LIMITED PARTNERSHIP:
Enclosed is your distribution check for the quarter ended December 31, 1995 (the
"Fourth Quarter"). This Report describes the activities of WINTHROP PARTNERS 81
LIMITED PARTNERSHIP, summarizes the results achieved by the Partnership through
1995 and contains its audited financial statements for the year ended December
31, 1995.
The Partnership has to date sold eight of its properties or 75.6% of its
original assets. The Partnership continues to own two properties, one of which
is leased to GTE and the other to Frank's Nursery. All lease payments due to the
Partnership through year-end 1995 were current.
Cash distributions derived from rental income in 1995 (and not from the sale of
Partnership assets) resulted in a return on investment of approximately 4.7% per
annum. The cash distributions provided by the Partnership since its inception in
August 1981 through 1995 are summarized on Page 3 of this Report. The
Partnership's cash reserves are approximately $230,000 as of December 31, 1995.
Cash Distribution/State Withholding Tax Requirements
The Partnership's net cash flow generated in the Fourth Quarter was $2.99 per
unit. For limited partners who elected the monthly method of distribution, the
enclosed check is one-third of the quarterly distribution. Your second and third
monthly installments will be mailed to you in 30 and 60 days, respectively.
Please note that your share of the Partnership's cash distribution for 1995 is
not taxable in and of itself. The amount of passive income and other items
necessary to complete your 1995 income tax returns are reported on your Schedule
K-1 which will be distributed to you by the end of February.
Properties Sold
1. NCNB, Orangeburg, SC. This property was sold in 1993 with the proceeds
distributed to limited partners in 1993. The cash-on-cash return
provided by the property during its original holding period was
approximately 2.7% per annum, taking into account the quarterly
distributions attributable to the property and the loss of capital
incurred on sale. The Partnership's original investment in this
property represented approximately 4.3% of the Partnership's initial
offering proceeds.
2. NCNB, Batesburg, SC. This property was sold in 1993 with the proceeds
distributed to limited partners in 1993. The cash-on-cash return
provided by the property during its holding period was approximately
4.4% per annum, taking into account the quarterly cash distributions
attributable to the property and the loss of capital incurred on sale.
The Partnership's original investment in this property represented
approximately 2.1% of the Partnership's initial offering proceeds.
3. NCNB, Sumter, SC. This property was sold in 1992 with the proceeds
distributed to limited partners in 1992. The cash-on-cash return
provided by the property during its holding period was approximately 7%
per annum, taking into account the quarterly distributions attributable
to the property and the return of capital upon sale. The Partnership's
original investment in this property represented approximately 4.2% of
the Partnership's initial offering proceeds.
4. NCNB, Greenville, SC. This property was sold in 1992 with the proceeds
distributed to limited partners in 1992. The cash-on-cash return
provided by the property during its original holding period was
approximately 12% per annum, taking into account the quarterly
distributions attributable to the property and the profit incurred on
sale. The Partnership's original investment in this property
represented approximately 2.4% of the Partnership's initial offering
proceeds.
<PAGE>
5. NCNB, Anderson, SC. This property was sold in 1992 with the proceeds
distributed to limited partners in 1992. The cash-on-cash return
provided by the property during its holding period was approximately 5%
per annum, taking into account the quarterly distributions attributable
to the property and the loss of capital incurred on sale. The
Partnership's original investment in this property represented
approximately 6% of the Partnership's initial offering proceeds.
6. NCNB, North, SC. This property was sold in 1991 with the proceeds
distributed to limited partners in 1991. The cash-on-cash return
provided by the property during its holding period was approximately
13% per annum, taking into account the quarterly distributions
attributable to the property and the profit incurred on sale. The
Partnership's original investment in this property represented
approximately 1.8% of the Partnership's initial offering proceeds.
7. Circuit City, Beltsville, MD. This property was sold in 1989 with the
proceeds distributed to limited partners in 1989. The cash-on-cash
return provided by the property during its holding period was
approximately 14% per annum, taking into account the quarterly
distributions attributable to the property and the profit incurred on
sale. The Partnership's original investment in this property
represented approximately 5.5% of the Partnership's initial offering
proceeds.
8. Seagate Technology ("Seagate"), formerly known as Magnetic
Peripherals, Oklahoma City, OK. This property was sold on January 12,
1995 with proceeds to be distributed to limited partners with the
First Quarter of 1995 distribution. Seagate exercised its option to
terminate the lease and vacated the property on May 1, 1994. The
annual base rent of $602,964 was approximately 30% higher than current
market rates. The Partnerhsip offered the property for sale in July
1993 through a third-party real estate broker. The property was sold
for $3,100,000 which was the highest offer received for the property.
The cash- on-cash return provided by the property during its holding
period was approximately 4.3% per annum, taking into account the
quarterly distributions attributable to the property, property
expenses and the loss incurred on sale. The Partnership's original
investment in this property represented approximately 49.3% of the
Partnerhsip's initial offering proceeds.
Status of the Partnership's Remaining Properties
The table on Page 3 provides summary information concerning the properties still
owned by the Partnership. The leasing status of each property is described
below:
1. Frank's Nursery and Crafts, Inc., Columbus, OH. This lease expires on
January 25, 1998. A percentage of gross sales has been paid to the
Partnership as additional rent in the each of the last five years.
2. GTE North Incorporated, formerly known as General Telephone Company
("GTE"), Columbus, OH. GTE's lease expires on April 30, 1997. The lease
provides that GTE's annual base rent will escalate annually from
$180,000 in the first year to $250,000 during the final year of the
lease term. GTE's prior base rent was $214,000 per annum.
The Partnership's future cash distributions will include ongoing distributions
from net cash flow and one-time distributions of sale proceeds. Cash flow will
be affected by, among other things, the terms of any new leases, any tenant
improvements and leasing costs associated with renewing leases with existing
tenants or signing leases with new tenants, the loss of rent and increased
expense during any period when a property is not under lease and the loss of
rent after a property is sold as well as on-going Partnership administrative
expenses.
Distributions of sale proceeds will be made as a partial return of capital. Per
the Partnership Agreement, the cash to be distributed from sale proceeds will go
100% to limited partners until they have received their $500 per unit original
Capital Contribution. The general partners' 8% share of sale proceeds would be
paid subsequently.
<PAGE>
The following table outlines the per unit cash distribution amounts for 1995 and
the cumulative results of the investment to date:
<TABLE>
- --------------------------------------------------------------------------------------------------------------------------------
Summary of 1995 Investor Benefits
Total Annualized Total Total
Quarterly Cash Pre-Tax Portfolio Passive
Distributions1 Return2 Income3 Income4
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$13.47 4% $2.31 $5.35
1st Quarter paid 5/15/95 $3.441
2nd Quarter paid 8/12/95 $3.75
3rd Quarter paid 11/14/95 $3.29
4th Quarter paid 2/14/96 $2.99
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Cumulative Results Through December 31, 1995
<TABLE>
Total Total Total Return
Limited Partner Cash Quarterly Cash of Total
Admission Date Distributed Distributions(1) Capital Profit5
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
August 24, 1981 $757.30 $546.22 $195.79 $15.29
September 23, 1981 $751.40 $540.32 $195.79 $15.29
October 26, 1981 $745.88 $534.80 $195.79 $15.29
November 25, 1981 $741.08 $530.00 $195.79 $15.29
December 23, 1981 $736.60 $525.52 $195.79 $15.29
January 25, 1982 $732.06 $520.98 $195.79 $15.29
February 22, 1982 $728.28 $517.20 $195.79 $15.29
March 26, 1982 $724.23 $513.15 $195.79 $15.29
April 26, 1982 $719.20 $508.12 $195.79 $15.29
June 9, 1982 $711.79 $500.71 $195.79 $15.29
</TABLE>
1 Represents one unit's share of cash flow generated from Partnership
operations. Does not include sale proceeds distribution of $114.80 per unit.
2 Represents the annualized pre-tax return on remaining capital of $288.92 per
original $500.00 unit. Due to the Tax Reform Act of 1986, the Partnership is
unable to provide accurate after-tax returns as a result of investors'
varying Federal income tax situations. Please consult your personal financial
advisor.
3 Rental income and funds held in Partnership reserves are invested in
short-term money market instruments prior to their distribution. This
portfolio income represents the interest income earned on these investments.
4 Represents one unit's share of passive income generated from Partnership
operations.
5 Profit is defined as the protion of proceeds distributed to limited partners
from the sale of a property in excess of the property's original purchase
price.
<PAGE>
The following table presents information regarding the two properties still
owned by the Partnership. All rental payments due to the Partnership through
December 31, 1995 were current:
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------------------
Summary of Partnership Investments
Date of Total Cost of Tenant Use Type of 1995 Lease
Tenant/Location Purchase the Property of the Lease/ Base Rent Expiration
Property Terms
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Frank's Nursery and Crafts, Inc.
(a wholly owned subsidiary of General Host Corp.)
Columbus, OH 1/25/83 $ 889,776 Retail Triple Net/ $ 99,0001 1-25-98
Nursery and Step Rent/
Crafts Store % Rent
GTE North Incorporated, formerly known as General Telephone Company of Ohio
Columbus, OH 10/14/82 1,849,948 Warehouse Triple Net/ 240,0002 4-30-97
Distribution Step Rent
Facility
$2,739,724 $339,000
</TABLE>
1 An additional rental payment of $5,284, representing a percentage of store
sales, was included in the First Quarter of 1994 cash distribution.
2 The annual lease rate was $230,000 through April 1995; $240,000 effective
May 1995 through April 1996; and $250,000 effective May 1996 through April
1997.
Definitions
Modified Net-most operating expenses are paid by tenant. Triple Net-all
operating expenses are paid by tenant.
% Rent-additional rent payable by tenant in excess of base rent if annual sales
exceed certain minimum levels. Step Rent-the rent payable by tenant periodically
increases over time.
Closing Comments
Your distribution check and Partnership Report for the First Quarter of 1996
will be mailed on May 15, 1996. In the meantime, please contact a representative
at Gemisys, our investor services agent, at (303) 705-3220 with any questions.
Very truly yours,
WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
By: One Winthrop Properties, Inc.
Managing General Partner
/S/ richard J. McCready
-----------------------------
Richard J. McCready
Chief Operating Officer
February 14, 1996
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO WINTHROP PARTNERS 81 LIMITED PARTNERSHIP:
We have audited the accompanying balance sheets of Winthrop Partners 81
Limited Partnership (a Massachusetts limited partnership) as of December 31,
1995 and 1994 and the related statements of income, changes in partners' capital
and cash flows for each of the three years in the period ended December 31,
1995. These financial statements are the responsibility of Winthrop Partners 81
Limited Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Winthrop Partners 81 Limited
Partnership as of December 31, 1995 and 1994 and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1995, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
January 31, 1996
<PAGE>
<TABLE>
STATEMENTS OF INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
For the Years Ended
December 31, 1995, 1994 and 1993 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income:
Rental income from real estate leases accounted
for under the operating method................................................ $ 266,830 $ 469,864 $ 858,174
Other income.................................................................... 14,113 54 -
Interest on short-term investments.............................................. 63,103 7,676 7,711
Interest income on real estate leases accounted
for under the financing method................................................ 21,222 23,953 26,452
------ ------- ------
365,268 501,547 892,337
------- -------- -------
Expenses:
Depreciation and amortization................................................... 64,181 221,558 233,117
Management fees................................................................. 5,092 9,595 12,821
General and administrative...................................................... 34,788 130,981 40,082
------ -------- ------
104,061 362,134 286,020
------- -------- -------
Operating income 261,207 139,413 606,317
Gain (loss) on sale of property, net 11,173 - (138,310)
------ ---- --------
Net income $ 272,380 $ 139,413 $ 468,007
= ======= = ======== = =======
Net income allocated to General Partners $ 20,897 $ 11,153 $ 48,505
= ====== = ======= = ======
Net income allocated to Limited Partners $ 251,483 $ 128,260 $ 419,502
= ======= = ======== = =======
Net income per Unit of Limited Partnership
Interest $ 10.02 $ 5.11 $ 16.71
= ===== = ===== = =====
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BALANCE SHEETS
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
December 31, 1995 and 1994 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Real Estate Leased to Others:
Accounted for under the operating method, at cost, net of accumulated
depreciation of $808,214 and $3,486,376 as of December 31, 1995 and 1994,
respectively................................................................... $ 1,451,031 $ 4,386,653
Accounted for under the financing method........................................ 220,360 252,598
-------- -------
1,671,391 4,639,251
Other Assets:
Cash and cash equivalents, at cost, which approximates
market value.................................................................. 233,877 179,327
Other........................................................................... 1,440 2,227
------ -----
.................................................................................. $ 1,906,708 $ 4,820,805
= ========== = =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities:
Accounts payable and accrued expenses........................................... $ 11,274 $ 27,653
Distributions payable to Partners............................................... 75,376 25,235
------- ------
.................................................................................. 86,650 52,888
------- ------
Partners' Capital (Deficit):
Limited Partners
Units of Limited Partnership Interest, $500 stated value per Unit;
authorized - 70,010 Units; issued
and outstanding - 25,109 Units............................................ 2,118,897 5,087,653
General Partners................................................................ (298,839) (319,736)
--------- --------
1,820,058 4,767,917
---------- ---------
$ 1,906,708 $ 4,820,805
= ========== = =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENTS OF CASH FLOWS
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
For the Years Ended
December 31, 1995, 1994 and 1993 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
<S> <C> <C> <C>
Net income.................................................................$ 272,380 $ 139,413 $ 468,007
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization............................................. 64,181 221,558 233,117
Minimum lease payments received, net of
interest income earned, on leases accounted for
under the financing method............................................... 32,238 29,507 27,008
(Gain) Loss on sale of property, net...................................... (11,173) - 138,310
Changes in assets and liabilities:
(Decrease) Increase in accounts payable and
accrued expenses....................................................... (16,379) 9,690 (48,038)
Decrease (increase) in other assets..................................... 788 5,878 (7,500)
---- ------ ------
Net cash provided by operating activities:................................ 342,035 406,046 810,904
-------- -------- -------
Cash flows from investing activities:
Net proceeds from sale of property.......................................... 2,882,613 - 227,155
---------- ----- -------
Net cash provided by investing activities................................. 2,882,613 - 227,155
---------- ----- -------
Cash flows from financing activities:
Cash distributions paid..................................................... (3,170,098) (398,799) (1,139,536)
----------- --------- ----------
Net cash used by financing activities:.................................... (3,170,098) (398,799) (1,139,536)
----------- --------- ----------
Net increase (decrease) in cash and cash equivalents.......................... 54,550 7,247 (101,477)
Cash and cash equivalents, beginning of period................................ 179,327 172,080 273,557
-------- -------- -------
Cash and cash equivalents, end of period.....................................$ 233,877 $ 179,327 $ 172,080
= ======== = ======== = =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
- -----------------------------------------------------------------------------------------------------------------------------------
UNITS OF
LIMITED GENERAL LIMITED
For the Years Ended PARTNERSHIP PARTNERS' PARTNERS' TOTAL
December 31, 1995, 1994 and 1993 INTEREST DEFICIT CAPITAL CAPITAL
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, December 31, 1992........................... 25,109 $ (325,853) $ 5,804,899 $ 5,479,046
Cash distributions paid or
accrued............................................ (53,541) (973,225) (1,026,766)
Net income........................................... 48,505 419,502 468,007
------- -------- -------
Balance, December 31, 1993........................... 25,109 (330,889) 5,251,176 4,920,287
------ --------- ---------- ---------
Cash distributions paid or
accrued............................................ 0 (291,783) (291,783)
Net income........................................... 11,153 128,260 139,413
------- -------- -------
Balance, December 31, 1994........................... 25,109 (319,736) 5,087,653 4,767,917
------ --------- ---------- ---------
Cash distributions paid or
accrued............................................ 0 (3,220,239) (3,220,239)
Net income........................................... 20,897 251,483 272,380
------- -------- -------
Balance, December 31, 1995........................... 25,109 $ (298,839) $ 2,118,897 $ 1,820,058
====== = ========= = ========= = =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
1. ORGANIZATION
Winthrop Partners 81 Limited Partnership, (the Partnership), was
organized under the Uniform Limited Partnership Act of the Commonwealth
of Massachusetts on February 9, 1981 for the purpose of owning and
leasing commercial and industrial real properties. The Partnership will
terminate on December 31, 2009, or sooner, in accordance with the terms
of the Partnership Agreement.
2. SIGNIFICANT ACCOUNTING POLICIES
Financial Statements - The financial statements of the Partnership are
prepared on the accrual basis of accounting in accordance with generally
accepted accounting principles.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Income Taxes - No provision has been made for federal, state or local
income taxes in the financial statements of the Partnership. Partners
are required to report on their individual tax returns their allocable
share of income, gains, losses, deductions and credits of the
Partnership. The Partnership prepares its tax returns on the accrual
basis. On May 29, 1981, the Internal Revenue Service issued a ruling
that the Partnership will be classified as a partnership for federal
income tax purposes.
Distributions to Partners - The cash distribution due Partners for the
three months ended December 31, 1995 is recorded in the accompanying
financial statements as a liability and a reduction of Partners'
capital. As provided in the Partnership Agreement, quarterly
distributions are payable to Partners within 60 days after the end of
the quarter.
Cash and Cash Equivalents - Cash and cash equivalents consist of a
mutual fund that invests in treasury bills and repurchase agreements
maturing in three months or less, valued at cost which approximates
market value.
Percentage Rent - The Partnership has entered into several leases that
provide for a minimum annual rent plus additional rent based upon
percentages of sales at the properties (percentage rent). These
percentage rents are recorded on a cash basis. For the years ended
December 31, 1995, 1994 and 1993, the Partnership received percentage
rent totaling $5,284, $7,518 and $14,849, respectively.
Leases - The Partnership leases its real properties and accounts for
such leases in accordance with the provisions of Statement of Financial
Accounting Standards No. 13, "Accounting for Leases," as amended. This
statement sets forth specific criteria for determining whether a lease
should be accounted for as a financing lease or an operating lease.
<PAGE>
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(a) Financing Method
Under this method, minimum lease payments to be received plus the
estimated value of the property at the end of the lease are
considered to be the Partnership's gross investment in the lease.
Unearned income, representing the difference between gross
investment and actual cost of the leased property, is amortized
over the lease term using the interest rate implicit in the lease
to provide a level rate of return over the lease term.
(b) Operating Method
Under this method, revenue is recognized as rentals become due,
which does not materially differ from the straight-line method.
Expenses (including depreciation) are charged to operations, as
incurred.
Depreciation - Component depreciation on real estate leased to others,
accounted for under the operating method, is computed using the
straight-line method over the useful life of each class of asset, which
ranges from 5 to 35 years. The cost of the properties represents the
purchase price of the properties plus acquisition and closing costs.
Certain amounts from prior years have been reclassified to remain
consistent with the current year presentation.
3. TRANSACTIONS WITH RELATED PARTIES
One Winthrop Properties, Inc. (One Winthrop), the Managing General
Partner, Winthrop Securities Co., Inc. (Winthrop Securities), the
Selling Agent for the Public Offering, and Winthrop Management, the
manager of the properties, are wholly owned subsidiaries of First
Winthrop Corporation, which in turn is wholly owned by Winthrop
Financial Associates, A Limited Partnership (WFA).
Winthrop Management is entitled to annual property management fees equal
to 1.5% of the excess of cash receipts over cash expenditures (excluding
debt service, property management fees and capital expenditures) from
each property managed by it. For the years ended December 31, 1995, 1994
and 1993, Winthrop Management earned $5,092, $9,595 and $12,821,
respectively, for managing the real properties of the Partnership.
The General Partners are entitled to 8% of Cash Available for
Distribution, subordinated to a cumulative priority quarterly
distribution to the Limited Partners as provided for in the Partnership
Agreement. The General Partners are also entitled to 8% of Sale or
Refinancing Proceeds, subordinated to certain priority distribution to
the Limited Partners as provided for in the Partnership Agreement. For
the year ended December 31, 1993, the Partnership paid or accrued
distributions from Cash Available for Distribution totaling $53,541 to
the General Partners. No such amounts were paid or accrued in 1995 or
1994. The proceeds from the sale of the Orangeburg and Batesburg, South
Carolina properties in 1993, and the Seagate, Oklahoma property in 1995
(see Note 6) were distributed entirely to the Limited Partners.
During the liquidation stage of the Partnership, the General Partners
and their affiliates are entitled to receive certain fees and
distributions, subordinated to specified minimum returns to the Limited
Partners as described in the Partnership Agreement.
<PAGE>
4. REAL ESTATE LEASED TO OTHERS ACCOUNTED FOR UNDER THE OPERATING METHOD
Real estate leased to others, at cost, accounted for under the operating
method as of December 31, 1995 and 1994 is summarized as follows:
<TABLE>
--------------------------------------------------------------------------------------------
1995 1994
--------------------------------------------------------------------------------------------
<S> <C> <C>
Land........................................ $ 600,841 $ 1,351,629
Commercial buildings........................ 1,658,404 6,521,400
Less: Accumulated depreciation............. (808,214) (3,486,376)
-------- ----------
$ 1,451,031 $ 4,386,653
= ========= = =========
The following is a summary of the minimum anticipated future rental
receipts, excluding percentage rents, by year, under the noncancelable
portion of the operating leases:
</TABLE>
<TABLE>
<S> <C>
1996.................................... 292,000
1997.................................... 129,000
1998.................................... 3,000
1999.................................... 0
2000.................................... 0
</TABLE>
<PAGE>
5. REAL ESTATE LEASED TO OTHERS ACCOUNTED FOR UNDER THE FINANCING METHOD
Real estate leased to others accounted for under the financing method,
as of December 31, 1995 and 1994, is summarized as follows:
<TABLE>
1995 1994
<S> <C> <C>
Minimum lease payments receivable..................... $ 110,502 $ 163,962
Unguaranteed residual value........................... 145,356 145,356
------- -------
255,858 309,318
Less: Unearned income................................ (35,498) (56,720)
------- -------
$ 220,360 $ 252,598
= ======= = =======
The following is a summary of the approximate minimum anticipated future
rental receipts, excluding percentage rents, by year, under the
noncancelable portion of the financing leases:
1996............................... 53,000
1997............................... 53,000
1998............................... 5,000
1999............................... 0
2000............................... 0
</TABLE>
6. SALE OF PROPERTY
On July 30, 1993, the Partnership sold the property located in
Orangeburg, South Carolina, for a sale price of $125,000, and in March
1993, the Partnership sold the property located in Batesburg, South
Carolina, for a sale price of $112,500. The Partnership had accounted
for the leased properties under the operating method and realized an
aggregate loss of $138,310 on these transactions. The sales provided
$227,153 of net proceeds, which have been distributed to limited
partners.
On January 12, 1995, the Partnership sold the property located in
Oklahoma City, Oklahoma, for a sale price of $3,100,000. The net
proceeds received by the Partnership for the sale resulted in a gain of
$11,173 for financing reporting purposes. The sale provided $2,882,613
of net proceeds, which have been distributed to limited partners.
<PAGE>
7. TAXABLE INCOME
The Partnership's taxable income for 1995 differs from the net income
for financial reporting purposes primarily due to the differences in the
methods used for the recognition of depreciation and the accounting for
certain real property leases under the financing method for financial
reporting purposes and the operating method for tax return purposes.
Taxable income for 1995 is as follows:
<TABLE>
<S> <C>
Net income for financial reporting purposes............................................... $ 272,380
Plus: Minimum lease payments received, net of
interest income earned, on leases accounted
for under the financing method.................................................... 32,238
Minus: Excess depreciation under ACRS.................................................. (95,539)
-------
Taxable income............................................................................ $ 209,079
=======
</TABLE>
<PAGE>
SUPPLEMENTARY INFORMATION
REQUIRED PURSUANT TO SECTION 9.4 OF THE PARTNERSHIP AGREEMENT
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
December 31, 1995 Three Months Ended Year Ended
(Unaudited) December 31, 1995 December 31, 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Statement of Cash Available for Distribution:
Net income.................................................................... $ 54,335 $ 272,380
Add: Depreciation and amortization charges
to income not affecting Cash Available
for Distribution.................................................... 12,469 64,181
Sales proceeds..................................................... - 2,882,613
Minimum lease payments received, net of
interest income earned, on leases
accounted for under the financing
method.............................................................. 8,329 32,238
Less: Reserves............................................................ (173) -
Prepaid rent........................................................ - (20,000)
Gain on sale of property............................................ - (11,173)
---- -------
Cash Available for Distribution............................................... $ 74,960 $ 3,220,239
- ------ - ---------
Distributions allocated to General Partners................................... $ - $ -
Distributions allocated to Limited Partners................................... $ 74,960 $ 3,220,239
- ------ - ---------
</TABLE>
2. Fees and other compensation paid or accrued by the Partnership to the General
Partners, or their affiliates, during the three months ended December 31, 1995:
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
Entity Receiving Form of (Unaudited)
Compensation Compensation Amount
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Winthrop Management Property management fees $ 1,271
General Partners Interest in Cash Available
for Distribution $ 0
WFC Realty Co., Inc. Interest in Cash Available
for Distribution $ 30
</TABLE>
All other information required pursuant to Section 9.4 of the Partnership
Agreement is set forth in the attached Financial Statements and related notes or
Annual Partnership Report.
<PAGE>
<TABLE>
WINTHROP PARTNERS 81
REAL ESTATE AND ACCUMULATED DEPRECIATION
(ACCOUNTED FOR UNDER THE OPERATING METHOD)
DECEMBER 31, 1995
SCHEDULE XI
1 of 2
<S> <C> <C> <C> <C> <C> <C> <C>
Initial cost to Partnership &
gross amount at which carried
as of Dec. 31, 1995 (A,B,&C) Accumulated Life on which
----------------------------
Depreciation Date of Depreciation
Buildings & as of Dec. 31, Construction Date Expense
Description Land Improvements Total 1995 (D) Completion Acquired is Computed
- ----------- ---- ------------ ----- -------------- ------------ -------- ------------
Land & Warehouse
Distribution Center,
Columbus, OH 191,544 1,658,404 1,849,948 808,214 1980 Oct. 1982 5-35 years
Land, Columbus, OH 409,297 - 409,297 - - Jan. 1983 -
---------- ------- ----------- ----------
$ 600,840 $1,658,404 $ 2,259,245 $ 808,214
========== ========== =========== ==========
</TABLE>
(A) The cost of the properties represents the purchase price of the
properties plus miscellaneous acquisition and closing costs. Included in
the costs are property acquisition fees totaling $544,827 paid to the
Managing General partner (See Note 3 of Notes to Financial Statements).
(B) The cost of real estate owned at December 31, 1995 is the same for
financial statement and income tax reporting purposes.
<TABLE>
(C) Reconciliation of real estate owned:
<S> <C>
Balance as of December 31, 1994...................... $ 7,873,029
Additions during 1995................................ 0
Sales of property during 1995........................ 5,613,784
---------
Balance as of December 31, 1995...................... $ 2,259,245
= =========
(D) Reconciliation of accumulated depreciation:
Balance as of December 31, 1994...................... $ 3,486,376
Depreciation expense during 1995..................... 64,181
Sales of property in 1995............................ 2,742,343
---------
Balance as of December 31, 1995...................... $ 6,292,900
= =========
</TABLE>
<PAGE>
REAL ESTATE AND ACCUMULATED DEPRECIATION
(ACCOUNTED FOR UNDER THE FINANCING METHOD)
DECEMBER 31, 1995
<TABLE>
SCHEDULE XI
Minimum Lease Payments
Net Investment in Received Net of Interest Date of Length of Lease
Financing Leases at Income Earned at Construction Date on Which Interest
Description point of purchase(A) December 31, 1995 (B) Completion Acquired Income is Computed
- ----------- -------------------- ------------------------ ------------ -------- ------------------
<S> <C> <C> <C> <C> <C>
Nursery & Craft Store,
Columbus, OH $480,479 $243,549 1968 Jan. 1983 15 years
======== ========
</TABLE>
(A) The net investment in financing leases at the point of purchase reflects the
purchase price of the properties plus miscellaneous acquisition and closing
costs. Included in the costs are property acquisition fees totaling $82,648 paid
to the Managing General Partner (See Note 3 of Notes to Financial Statement).
The net investment at the point of purchase is as follows:
<TABLE>
<S> <C>
Minimum lease payments receivable........... $ 801,885
Plus: Unguaranteed residual................ 145,356
Minus: Unearned income..................... (466,762)
---------
Net Investment.............................. $ 480,479
=========
</TABLE>
(B) Reconciliation of minimum lease payments received net of interest income
earned:
<TABLE>
<S> <C>
Balance as of December 31, 1994............. $ 222,327
Minimum lease payments received net of
interest income earned during 1995......... 21,222
---------
Balance as of December 31, 1995............. $ 243,549
=========
</TABLE>
