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 March 31, 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 [ ]
<PAGE>
WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1998
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
March 31, December 31,
1998 1997
------- -------
Assets
Real Estate:
Accounted for under the operating method,
at cost, net of accumulated depreciation of
$906 and held for sale ............................ $ 752 $ --
Accounting for under the operating method,
at cost net of accumulated depreciation of $906 ... -- 752
Land - held for sale ................................... 192 --
Land ................................................... 409 601
Accounted for under the financing method ............... 145 147
------- -------
1,498 1,500
Other Assets:
Cash and cash equivalents .............................. 525 518
Other assets ........................................... 6 21
------- -------
Total Assets .................................. $ 2,029 $ 2,039
======= =======
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses .................. $ 39 $ 50
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Total Liabilities ............................. 39 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 ............... 2,269 2,268
General Partners' Deficit .............................. (279) (279)
------- -------
Total Partners' Capital ....................... 1,990 1,989
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Total Liabilities and Partners' Capital ....... $ 2,029 $ 2,039
======= =======
See notes to financial statements.
<PAGE>
WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1998
Statements of Income (Unaudited)
(In Thousands, Except Unit Data)
For The Three Months Ended
March 31, March 31,
1998 1997
------- ------
Income:
Rental income from real estate leases accounted
for under the operating method .......................... $ 12 $ 74
Interest on short-term investments ........................... 7 6
Interest income on real estate leases accounted
for under the financing method .......................... 13 4
----- -----
Total income ........................................ 32 84
----- -----
Expenses:
Operating .................................................... 14 --
Depreciation ................................................. -- 12
Management fees .............................................. -- 1
General and administrative ................................... 17 13
----- -----
Total expenses ...................................... 31 26
----- -----
Net income ................................................... $ 1 $ 58
===== =====
Net income allocated to general partners ..................... $ -- $ 5
===== =====
Net income allocated to limited partners ..................... $ 1 $ 53
===== =====
Net income per Unit of Limited Partnership Interest .......... $0.04 $2.11
===== =====
Distributions per Unit of Limited Partnership Interest ....... $ -- $ --
===== =====
See notes to financial statements.
<PAGE>
WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 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 ................... -- -- 1 1
------ ------ ------ ------
Balance - March 31, 1998 ........ 25,109 $ (279) $2,269 $1,990
====== ====== ====== ======
See notes to financial statements.
<PAGE>
WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1998
Statements of Cash Flows (Unaudited)
(In Thousands)
For The Three Months Ended
March 31, March 31,
1998 1997
---- ----
Cash Flows From Operating Activities:
Net income ............................................. $ 1 $ 58
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation ...................................... -- 12
Changes in assets and liabilities:
Decrease in other assets .......................... 15 2
Decrease in accounts payable and
accrued expenses ................................ (11) (9)
----- -----
Net cash provided by operating activities: ............. 5 63
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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 ........................... 2 9
----- -----
Cash provided by investing activities ............. 2 9
----- -----
Net increase in cash and cash equivalents .............. 7 72
Cash and cash equivalents, beginning of period ......... 518 419
----- -----
Cash and cash equivalents, end of period ............... $ 525 $ 491
===== =====
See notes to financial statements.
<PAGE>
WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 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 are of a normal
recurring nature. Certain amounts have been reclassified to conform to
the March 31, 1998 presentation. The balance sheet at December 31, 1997
was derived from audited financial statements at such date.
The results of operations for the three months ended March 31, 1998 and
1997, 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 $1,000 for the three months ended March
31, 1997.
3. Contract for Sale of Property
On April 8, 1998, the Partnership entered into a contract to sell the GTE
Property for $2,050,000. The sale, if consummated, is expected to close
during May 1998. If the sale is consummated, the Partnership will
recognize a gain for financial reporting purposes.
<PAGE>
WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 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 two remaining properties include a vacant warehouse and
a retail store, which is leased to a single tenant pursuant to a triple
net lease. 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). On April 8, 1998, the Partnership entered into a
contract to sell the GTE property for $2,050,000. If the sale is
consummated, which the Managing General Partner expects to be completed,
if at all, during May 1998, the Partnership will recognize a gain for
financial reporting purposes.
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
$7,000 increase at March 31, 1998, as compared to December 31, 1997. The
Partnership's $5,000 of cash provided by operating activities declined at
March 31, 1998, as compared to March 31, 1997, primarily due to the
decrease in net income in 1998. At March 31, 1998, the Partnership had
approximately $525,000 in cash and cash equivalents which has been
invested primarily in money market mutual funds.
<PAGE>
WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 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 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 $50,000 associated with this property (which consist
principally of real estate taxes). As of March 31,1998, the Partnership
incurred approximately $14,000 of operating expenses. In addition, there
is some environmental clean-up required relating to previously removed
underground storage tanks at the GTE property. GTE has agreed to pay for
these costs. 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.
Due to the expiration and non-renewal of the GTE lease, the general
partner had decided to suspend cash distributions in order to maintain
cash reserves, which may have been needed to fund potential capital
improvements required in connection with the re-letting of the property.
If the GTE property is sold, the Partnership expects to distribute
approximately $1,900,000, of net proceeds. The Frank's Lease was recently
extended at a small increase in rent.
Results of Operations
Net income decreased by $57,000 for the three months ended March 31,
1998, as compared to 1997, due to a decrease in revenues of $52,000 and
an increase in expenses of $5,000.
Revenues decreased for the three months ended March 31, 1998, as compared
to 1997, due to the expiration of the GTE lease in April 1997. Expenses
increased by $5,000 due to costs associated with the vacant GTE building
and slightly higher general and administrative expenses during 1998,
which was only partially offset by a decrease in depreciation of $12,000.
Depreciation expense declined due to the Partnership not taking
depreciation on the GTE Property during 1998, since the Partnership
expects to sell this property in 1998.
<PAGE>
WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 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
March 31, 1998.
<PAGE>
WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 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: May 6, 1998
<PAGE>
WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 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
Exhibit 99
WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 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 March 31, 1998:
Net income $ 1,000
Add: Minimum lease payments received, net of interest
income earned, on leases accounted for under the
financing method 2,000
Less: Cash to reserves (3,000)
--------
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 March 31, 1998:
Entity Receiving Form of
Compensation Compensation Amount
Winthrop
Management LLC Property Management Fees $ 76
WFC Realty Co., Inc. Interest in Cash Available
(Initial Limited Partner) for Distribution $ --
<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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 525,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,404,000
<DEPRECIATION> (906,000)
<TOTAL-ASSETS> 2,029,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1,990,000
<TOTAL-LIABILITY-AND-EQUITY> 2,029,000
<SALES> 0
<TOTAL-REVENUES> 25,000
<CGS> 0
<TOTAL-COSTS> 14,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,000
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
