<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, 1998
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
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
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, 1998
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
June 30, December 31,
1998 1997
--------- ---------
Assets
Real Estate:
Accounted for under the operating method,
at cost, net of accumulated depreciation
of $906 (1997) $ - $ 752
Land 409 601
Accounted for under the financing method 145 147
--------- ---------
554 1,500
Other Assets:
Cash and cash equivalents 2,406 518
Other assets 24 21
--------- ---------
Total Assets $ 2,984 $ 2,039
========= =========
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 8 $ 50
Distributions payable 1,910 -
--------- ---------
Total Liabilities 1,918 50
--------- ---------
Partners' Capital:
Limited Partners -
Units of Limited Partnership Interest,
$500 stated value per Unit; authorized-70,010 Units;
issued and outstanding - 25,109 Units 1,334 2,268
General Partners' Deficit (268) (279)
--------- ---------
Total Partners' Capital 1,066 1,989
--------- ---------
Total Liabilities and Partners' Capital $ 2,984 $ 2,039
========= =========
See notes to financial statements.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1998
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,
1998 1997 1998 1997
------- ------ ------ ------
<S> <C> <C> <C> <C>
Income:
Rental income from real estate leases accounted
for under the operating method $ 13 $ 32 $ 25 $ 106
Interest on short-term investments 16 6 23 12
Interest income on real estate leases accounted
for under the financing method 14 4 27 8
Gain on sale of building 967 -- 967 --
------- ------ ------ ------
Total income 1,010 42 1,042 126
------- ------ ------ ------
Expenses:
Operating 10 -- 24 --
Depreciation -- 12 -- 24
Management fees -- 1 -- 2
General and administrative 14 23 31 36
------- ------ ------ ------
Total expenses 24 36 55 62
------- ------ ------ ------
Net income $ 986 $ 6 $ 987 $ 64
======= ====== ====== ======
Net income allocated to general partners $ 11 $ -- $ 11 $ 5
======= ====== ====== ======
Net income allocated to limited partners $ 975 $ 6 $ 976 $ 59
======= ====== ====== ======
Net income per Unit of Limited Partnership Interest $ 38.83 $ .24 $38.87 $ 2.35
======= ====== ====== ======
Distributions per Unit of Limited Partnership Interest $ 76.07 $ -- $76.07 $ --
======= ====== ====== ======
</TABLE>
See notes to financial statements.
3 of 12
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1998
Statement of Partners' Capital (Unaudited)
(In Thousands, Except Unit Data)
Units of
Limited General Limited
Partnership Partners' Partners' Total
Interest Deficit Capital Capital
------- ------- ------- -------
Balance - January 1, 1998 25,109 $ (279) $ 2,268 $ 1,989
Net income 11 976 987
Distributions -- (1,910) (1,910)
------- ------- ------- -------
Balance - June 30, 1998 25,109 $ (268) $ 1,334 $ 1,066
======= ======= ======= =======
See notes to financial statements.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1998
Statements of Cash Flows (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
For The Six Months Ended
June 30, June 30,
1998 1997
------- -------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 987 $ 64
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation -- 24
Gain on sale of building (967) --
Changes in assets and liabilities:
(Increase) decrease in other assets (3) 2
Decrease in accounts payable and
accrued expenses (42) (22)
------- -------
Net cash (used in) provided by operating activities: (25) 68
------- -------
Cash Flows From Investing Activities:
Minimum lease payments received, net of interest
income earned, on leases accounted for under
the financing method 3 19
Net proceeds from sale of property 1,910 --
------- -------
Cash provided by investing activities 1,913 19
------- -------
Net increase in cash and cash equivalents 1,888 87
Cash and cash equivalents, beginning of period 518 419
------- -------
Cash and cash equivalents, end of period $ 2,406 $ 506
======= =======
Supplemental Disclosure of Non-Cash Financing Activities
Accrued Distribution to Partners $ 1,910 $ --
======= =======
</TABLE>
See notes to financial statements.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1998
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, 1997.
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, except as
discussed in Note 3, are of a normal recurring nature. The balance sheet
at December 31, 1997, was derived from audited financial statements at
such date.
The results of operations for the six months ended June 30, 1998 and
1997, are not 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 for the six months ended June
30, 1997.
3. Sale of Property
On May 21, 1998, the Partnership sold its Columbus, Ohio property
(formerly leased to GTE North Incorporated) for $1,910,000 (net of
closing costs of $93,000), resulting in a gain of $967,000.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1998
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
The Partnership's remaining property is a retail store, which is
leased to a single tenant pursuant to a triple net lease. The
Partnership is currently marketing its remaining property for sale.
If the Partnership is successful in obtaining a purchaser, the
Partnership will be liquidated. The recently extended lease with
Frank's Nursery and Crafts, Inc. expires in January 2003, subject to
extension. The lease was extended at a small increase in rent. On
May 21, 1998, the Partnership sold its Columbus, Ohio [formerly
leased to GTE North Incorporated (the "GTE Lease")] property for
$1,910,000 (net of closing costs of $93,000) resulting in a gain of
$967,000 for financial reporting purposes. The Partnership expects
to distribute the net sale proceeds of $1,910,000 ($76.07 per Unit)
during August 1998 and has made no other distributions during each
of the six months ended June 30, 1998 and 1997.
The Partnership receives rental income from its leased 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 were not re-let upon the expiration of such lease.
The level of liquidity based on cash and cash equivalents
experienced a $1,888,000 increase at June 30, 1998, as compared to
December 31, 1997, due to $1,910,000 of proceeds received on the
sale of the Partnership's Columbus, Ohio property. At June 30, 1998,
the Partnership had approximately $2,406,000 in cash and cash
equivalents which has been invested primarily in money market mutual
funds.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1998
Item 2. Management's Discussion and Analysis or Plan of Operation (Continued)
Liquidity and Capital Resources (Continued)
The Partnership requires cash primarily to pay general and
administrative expenses. In addition, if the Partnership is unable
to sell its remaining 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.
Results of Operations
Net income increased by $923,000 for the six months ended June 30,
1998, as compared to 1997, due to the gain of $967,000 on sale of
the Columbus, Ohio property.
Revenues, excluding the gain on sale, decreased for the six months
ended June 30, 1998, as compared to 1997, primarily due to the
expiration of the GTE lease in April 1997. Interest on short-term
investments increased due to the net proceeds received from the sale
of the property. Expenses declined by $7,000, due to decreases in
depreciation expense of $24,000 and general and administrative
expense of $5,000, which were only partially offset by $24,000 of
operating costs associated with the Columbus, Ohio property, which
was vacant prior to its sale.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1998
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, 1998.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1998
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
----------------------------
Michael L. Ashner
Chief Executive Officer and Director
BY: /s/ Edward V. Williams
----------------------------
Edward V. Williams
Chief Financial Officer
Dated: August 5, 1998
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1998
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
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Exhibit 99
WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB JUNE 30, 1998
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, 1998:
Net income $ 986,000
Add: Minimum lease payments received,
net of interest income earned,
on leases accounted for under the
financing method 1,000
Proceeds on sale of property 1,910,000
Less: Gain on sale of property (967,000)
Cash to reserves (20,000)
------------
Cash Available for Distribution $ 1,910,000
============
Distributions allocated to Limited Partners $ 1,910,000
============
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, 1998:
Entity Receiving Form of
Compensation Compensation Amount
------------ ------------ ------
Winthrop
Management LLC Property Management Fees $ 70
WFC Realty Co., Inc. Interest in Cash
(Initial Limited Partner) Available for Distribution $ 761
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-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 2,406,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 554,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,984,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1,066,000
<TOTAL-LIABILITY-AND-EQUITY> 2,984,000
<SALES> 0
<TOTAL-REVENUES> 1,019,000 <F1>
<CGS> 0
<TOTAL-COSTS> 24,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 987,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 987,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 987,000
<EPS-PRIMARY> 38.87
<EPS-DILUTED> 38.87
<FN>
<F1> Includes gain on sale of building of $967,000.
</FN>
</TABLE>
