<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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 0-10404
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Winthrop Partners 81 Limited Partnership
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(Exact name of small business issuer as specified in its charter)
Massachusetts 04-2720480
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One International Place, Boston, MA 02110
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (617) 330-8600
--------------
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 PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets (Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
(In Thousands, Except Unit Data) 1997 1996
--------------- ---------------
<S> <C> <C>
Assets
Real Estate Leased to Others:
Accounted for under the operating method, at
cost, net of accumulated depreciation of $882 (1997)
and $858 (1996) $ 1,377 $ 1,401
Accounted for under the financing method 166 185
--------------- ---------------
1,543 1,586
Other Assets:
Cash and cash equivalents 506 419
Other -- 2
--------------- ---------------
Total Assets $ 2,049 $ 2,007
=============== ===============
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 23 $ 45
--------------- ---------------
Total Liabilities 23 45
--------------- ---------------
Partners Capital:
Limited Partners -
Units of Limited Partnership Interest,
$500 stated value per Unit; authorized -
70,010 Units; issued and outstanding - 25,109 Units 2,302 2,243
General Partners (Deficit) (276) (281)
--------------- ---------------
Total Partners' Capital 2,026 1,962
--------------- ---------------
Total Liabilities and Partners' Capital $ 2,049 $ 2,007
=============== ===============
</TABLE>
See notes to financial statements.
2 of 12
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
Statements of Income (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Income:
Rental income from real estate leases accounted
for under the operating method $ 32 $ 73 $ 106 $ 154
Interest on short-term investments 6 4 12 6
Interest income on real estate leases accounted
for under the financing method 4 5 8 9
-------------- -------------- -------------- --------------
Total income 42 82 126 169
-------------- -------------- -------------- --------------
Expenses:
Depreciation 12 12 24 25
Management fees 1 2 2 3
General and administrative 23 19 36 32
-------------- -------------- -------------- --------------
Total expenses 36 33 62 60
-------------- -------------- -------------- --------------
Net income $ 6 $ 49 $ 64 $ 109
============== ============== ============== ==============
Net income allocated to general partners $ -- $ 4 $ 5 $ 9
============== ============== ============== ==============
Net income allocated to limited partners $ 6 $ 45 $ 59 $ 100
============== ============== ============== ==============
Net income per Unit of Limited Partnership Interest $ .24 $ 1.79 $ 2.35 $ 3.98
============== ============== ============== ==============
Distributions per Unit of Limited Partnership Interest $ -- $ -- $ -- $ 3.23
============== ============== ============== ==============
</TABLE>
See notes to financial statements.
3 of 12
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
Statement of Partners' Capital (Unaudited)
<TABLE>
<CAPTION>
(In Thousands, Except Unit Data) Units of
Limited General Limited
Partnership Partners' Partners' Total
Interest Deficit Capital Capital
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Balance - January 1, 1997 25,109 $ (281) $ 2,243 $ 1,962
Net income 5 59 64
------------- ------------- ------------- -------------
Balance - June 30, 1997 25,109 $ (276) $ 2,302 $ 2,026
============= ============= ============= =============
</TABLE>
See notes to financial statements.
4 of 12
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
Statements of Cash Flows (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
For the Six Months Ended
June 30, 1997 June 30, 1996
--------------- ---------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 64 $ 109
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 24 25
Changes in assets and liabilities:
(Decrease) increase in accounts payable and accrued expenses (22) 48
Decrease in other assets 2 --
--------------- ---------------
Net cash provided by operating activities 68 182
--------------- ---------------
Cash Flows From Investing Activities:
Minimum lease payments received, net of interest income
earned, on leases accounted for under the financing method 19 17
--------------- ---------------
Cash provided by investing activities 19 17
--------------- ---------------
Cash Flows From Financing Activities:
Cash distributions -- (157)
--------------- ---------------
Cash used in financing activities -- (157)
--------------- ---------------
Net increase in cash and cash equivalents 87 42
Cash and cash equivalents, beginning of period 419 234
--------------- ---------------
Cash and cash equivalents, end of period $ 506 $ 276
=============== ===============
</TABLE>
See notes to financial statements.
5 of 12
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. General
The accompanying financial statements, footnotes and discussions
should be read in conjunction with the financial statements,
related footnotes and discussions contained in the Partnership's
annual report on Form 10-KSB for the year ended December 31, 1996.
The financial information contained herein is unaudited. In the
opinion of management, all adjustments necessary for a fair
presentation of such financial information have been included. All
adjustments are of a normal recurring nature. Certain amounts have
been reclassified to conform to the June 30, 1997 presentation.
The balance sheet at December 31, 1996 was derived from audited
financial statements at such date.
The results of operations for the six months ended June 30, 1997
and 1996 are not necessarily indicative of the results to be
expected for the full year.
2. Related Party Transactions
Management fees paid or accrued by the Partnership to an affiliate
of the Managing General Partner, totaled $2,000 and $3,000 during
the six months ended June 30, 1997 and 1996, respectively.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
Item 6. Management's Discussion and Analysis or Plan of Operation.
This Item should be read in conjunction with the financial
statements and other items contained elsewhere in the report.
Liquidity and Capital Resources
The Partnership's two remaining properties include a warehouse which
is leased to a single tenant pursuant to a triple net lease and a
vacant retail store. The recently extended lease with Frank's
Nursery and Crafts, Inc. (the "Frank's Lease") expires in January
2003, subject to extension. The lease with GTE North Incorporated
(the "GTE Lease") expired in April 1997 (see below). The Partnership
has engaged a local broker to attempt to procure a new tenant for
this property.
The Partnership receives rental income from its occupied property
which is its primary source of liquidity. Pursuant to the terms of
the lease, the tenant is responsible for substantially all of the
operating expenses with respect to the property including
maintenance, capital improvements, insurance and taxes. The
Partnership would be responsible for similar expenses if the
property was not re-let upon the expiration of such lease.
The level of liquidity based on cash and cash equivalents
experienced an $87,000 increase at June 30, 1997 as compared to
December 31, 1996. The Partnership's $68,000 of cash provided by
operating activities and $19,000 of cash provided by investing
activities increased its cash reserves. At June 30, 1997, the
Partnership had $506,000 in cash reserves.
The Partnership requires cash primarily to pay management fees and
general and administrative expenses. In addition, if the Partnership
is unable to sell its occupied property prior to its lease
expiration, extend the current lease or re-let the property upon the
expiration of the lease terms, the Partnership would be responsible
for operating expenses, such as real estate taxes, insurance and
utility expenses associated with the property. Since the expiration
of the GTE Lease, the Partnership has been responsible for
approximately $45,000 of annual operating costs which consist
principally of real estate taxes. In addition, there is some
environmental clean-up required relating to underground storage
tanks at the GTE property. The Partnership's obligation for the
clean-up costs, if any, is not expected to be significant. The
Partnership's rental and interest income has been sufficient to
satisfy the Partnership's obligations since the expiration of the
GTE lease.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
Item 6. Management's Discussion and Analysis or Plan of Operation (Continued)
Liquidity and Capital Resources (Continued)
Due to the net and long-term nature of the original leases,
inflation and changing prices have not significantly affected the
Partnership's revenues and net income. As tenant leases expire, the
Partnership expects that inflation and changing prices will affect
the Partnership's revenues. Due to the expiration and non-renewal of
the GTE lease, the general partner has decided to suspend cash
distributions in order to maintain cash reserves, which may be
needed to fund potential capital improvements required in connection
with the re-letting of the property. The Frank's Lease was recently
extended at a small increase in rent. The Partnership invests its
working capital reserves in a money market mutual fund.
Results of Operations
Net income decreased by $45,000 for the six months ended June 30,
1997, as compared to 1996, due to a decrease in revenues of $43,000
and an increase in expenses of $2,000.
Rental income decreased for the six months ended June 30, 1997, as
compared to 1996, primarily due to the expiration of the GTE lease
in April 1997. The Partnership received $7,000 of percentage rents
in 1996 and is not expecting any percentage rents in 1997. Expenses
remained relatively constant for the six months ended June 30, 1997,
as compared to 1996.
8 of 12
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27. Financial Data Schedule
99. Supplementary Information Required Pursuant to
Section 9.4 of the Partnership Agreement.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the three months
ended June 30, 1997.
9 of 12
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BY: ONE WINTHROP PROPERTIES, INC.
Managing General Partner
BY: /s/ Michael L. Ashner
------------------------------------
Michael L. Ashner
Chief Executive Officer and Director
BY: /s/ Edward V. Williams
------------------------------------
Edward V. Williams
Chief Financial Officer
Dated: August 4, 1997
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
Exhibit Index
Exhibit Page No.
27. Financial Data Schedule -
99. Supplementary Information Required Pursuant to
Section 9.4 of the Partnership Agreement. 12
11 of 12
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Exhibit 99
WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1997
Supplementary Information Required Pursuant to Section 9.4 of the Partnership
Agreement
1. Statement of Cash Available for Distribution for the three months
ended June 30, 1997:
Net income $ 6,000
Add: Depreciation charged to income not
affecting cash available for
distribution 12,000
Minimum lease payments received, net of
interest income earned, on leases
accounted for under the financing method 10,000
Less: Other noncash item (7,000)
Cash to reserves (21,000)
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Cash Available for Distribution $ 0
==========
2. Fees and other compensation paid or accrued by the
Partnership to the General Partners, or their affiliates,
during the three months ended June 30, 1997:
<TABLE>
<CAPTION>
Entity Receiving Form of
Compensation Compensation Amount
------------------------- ------------------------------------------- ----------
<S> <C> <C>
Winthrop
Management Property Management Fees $ 1,000
WFC Realty Co., Inc.
(Initial Limited Partner) Interest in Cash Available for Distribution $ -
</TABLE>
12 of 12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Winthrop
Partners 81 Limited Partnership and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 506,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,425,000
<DEPRECIATION> (882,000)
<TOTAL-ASSETS> 2,049,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,026,000
<TOTAL-LIABILITY-AND-EQUITY> 2,049,000
<SALES> 0
<TOTAL-REVENUES> 114,000
<CGS> 0
<TOTAL-COSTS> 26,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 64,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 64,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 64,000
<EPS-PRIMARY> 2.35
<EPS-DILUTED> 2.35
</TABLE>
