<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 September 30, 1997
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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
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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
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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 PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1997
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets (Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
(In Thousands, Except Unit Data) 1997 1996
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<S> <C> <C>
Assets
Real Estate Leased to Others:
Accounted for under the operating method, at
cost, net of accumulated depreciation of $894 (1997)
and $858 (1996) $ 1,365 $ 1,401
Accounted for under the financing method 157 185
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1,522 1,586
Other Assets:
Cash and cash equivalents 511 419
Other - 2
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Total Assets $ 2,033 $ 2,007
===================== ==========================
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 16 $ 45
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Total Liabilities 16 45
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Partners Capital:
Limited Partners -
Units of Limited Partnership Interest,
$500 stated value per Unit; authorized -
70,010 Units; issued and outstanding - 25,109 Units 2,294 2,243
General Partners (Deficit) (277) (281)
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Total Partners' Capital 2,017 1,962
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Total Liabilities and Partners' Capital $ 2,033 $ 2,007
===================== ==========================
</TABLE>
See notes to financial statements.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1997
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,
1997 1996 1997 1996
------------------ ---------------- ------------------- ---------------------------
<S> <C> <C> <C> <C>
Income:
Rental income from real estate leases
accounted for under the operating
method $ 11 $ 73 $ 117 $ 227
Interest on short-term investments 7 3 19 9
Interest income on real estate leases
accounted for under the financing
method 4 5 12 14
------------------ ---------------- ------------------- -----------------------
Total income 22 81 148 250
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Expenses:
Depreciation 12 12 36 37
Management fees - 1 2 4
General and administrative 19 10 55 42
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Total expenses 31 23 93 83
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Net (loss) income $ (9) $ 58 $ 55 $ 167
================== ================ =================== =======================
Net (loss) income allocated to
general partners $ (1) $ 5 $ 4 $ 13
================== ================ =================== =======================
Net (loss) income allocated to
limited partners $ (8) $ 53 $ 51 $ 154
================== ================ =================== =======================
Net (loss) income per Unit of
Limited Partnership Interest $ (.32) $ 2.11 $ 2.03 $ 6.13
================== ================ =================== ======================
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 SEPTEMBER 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 4 51 55
------------------ ------------------ ------------------ --------------------
Balance - September 30, 1997 25,109 $ (277) $ 2,294 $ 2,017
================== ================== ================== ====================
</TABLE>
See notes to financial statements.
4 of 12
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1997
Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
(In Thousands)
For the Nine Months Ended
September 30, September 30,
1997 1996
--------------------- --------------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 55 $ 167
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 36 37
Changes in assets and liabilities:
Decrease in other assets 2 -
(Decrease) increase in accounts payable and other liabilities (29) 30
-------------------- --------------------
Net cash provided by operating activities 64 234
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Cash Flows From Investing Activities:
Minimum lease payments received, net of interest income
earned, on leases accounted for under the financing method 28 26
-------------------- --------------------
Cash provided by investing activities 28 26
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Cash Flows From Financing Activities:
Cash distributions - (157)
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Cash used in financing activities - (157)
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Net increase in cash and cash equivalents 92 103
Cash and cash equivalents, beginning of period 419 234
-------------------- --------------------
Cash and cash equivalents, end of period $ 511 $ 337
==================== ====================
</TABLE>
See notes to financial statements.
5 of 12
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1997
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, 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 September 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 nine months ended September 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 $4,000 during
the nine months ended September 30, 1997 and 1996, respectively.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 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
a $92,000 increase at September 30, 1997, as compared to December
31, 1996. The Partnership's $64,000 of cash provided by operating
activities and $28,000 of cash provided by investing activities
increased its cash reserves. At September 30, 1997, the Partnership
had $511,000 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 a 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. As a result of the expiration of the
GTE Lease in April 1997, the Partnership is responsible for the
annual operating costs of approximately $45,000 associated with this
property (which consist principally of real estate taxes). In
addition, there is some environmental clean-up required relating to
previously removed 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 SEPTEMBER 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 $112,000 for the nine months ended September
30, 1997, as compared to 1996, due to a decrease in revenues of
$102,000 and an increase in expenses of $10,000.
Rental income decreased for the nine months ended September 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
increased by $10,000 primarily due to costs associated with the
vacant GTE building.
8 of 12
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 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 September 30, 1997.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 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.
WINTHROP PARTNERS 81 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
and Director
BY: /s/ Edward V. Williams
----------------------
Edward V. Williams
Chief Financial Officer
Dated: November 13, 1997
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1997
Exhibit Index
Exhibit Page No.
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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 SEPTEMBER 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 September 30, 1997:
Net loss $ (9,000)
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 9,000
Less: Other noncash item (7,000)
Cash to reserves (5,000)
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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 September 30, 1997:
Entity Receiving Form of
Compensation Compensation Amount
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Winthrop
Management Property Management Fees $ 371
WFC Realty Co., Inc. Interest in Cash Available
(Initial Limited Partner) for Distribution $ -
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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 511,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,416,000
<DEPRECIATION> (894,000)
<TOTAL-ASSETS> 2,033,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,017,000
<TOTAL-LIABILITY-AND-EQUITY> 2,033,000
<SALES> 0
<TOTAL-REVENUES> 129,000
<CGS> 0
<TOTAL-COSTS> 38,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 55,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 55,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 55,000
<EPS-PRIMARY> 2.03
<EPS-DILUTED> 2.03
</TABLE>
