<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 March 31, 1999
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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 ___________
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 MARCH 31, 1999
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
March 31, December 31,
1999 1998
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Assets
Real Estate Leased to Others:
Accounted for under the operating method
and held for sale $ 554 $ 554
Other Assets:
Cash and cash equivalents 560 581
Other assets 4 5
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Total Assets $ 1,118 $ 1,140
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Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 124 $ 10
Distributions payable to partners -- 151
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Total Liabilities 124 161
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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 1,256 1,242
General Partners' Deficit (262) (263)
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Total Partners' Capital 994 979
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Total Liabilities and Partners' Capital $ 1,118 $ 1,140
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See notes to financial statements.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1999
Statements of Income (Unaudited)
(In Thousands, Except Unit Data)
For The Three Months Ended
March 31, March 31,
1999 1998
----------- -----------
Income:
Rental income from real estate leases accounted
for under the operating method $ 27 $ 23
Interest on short-term investments 6 7
Interest income on real estate leases accounted
for under the financing method -- 2
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Total income 33 32
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Expenses:
Operating -- 14
General and administrative 18 17
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Total expenses 18 31
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Net income $ 15 $ 1
=========== ============
Net income allocated to general partners $ 1 $ --
=========== ============
Net income allocated to limited partners $ 14 $ 1
=========== ============
Net income per Unit of Limited
Partnership Interest $ 0.56 $ 0.04
=========== ============
Distributions per Unit of Limited
Partnership Interest $ -- $ --
=========== ============
See notes to financial statements.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1999
Statement of Partners' Capital (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
Units of
Limited General Limited Total
Partnership Partners' Partners' Partners'
Interest Deficit Capital Capital
------------------ --------------- --------------- --------------
<S> <C> <C> <C> <C>
Balance - January 1, 1999 25,109 $ (263) $ 1,242 $ 979
Net income 1 14 15
------------------ ----------------- -------------- --------------
Balance - March 31, 1999 25,109 $ (262) $ 1,256 $ 994
================== ================= =============== =============
</TABLE>
See notes to financial statements.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1999
Statements of Cash Flows (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
For The Three Months Ended
March 31, March 31,
1999 1998
---------------------------- ----------------------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 15 $ 1
Adjustments to reconcile net income to net cash provided
by operating activities:
Decrease in other assets 1 15
Increase (decrease) in accounts payable and
accrued expenses 114 (11)
---------------------------- ----------------------------
Net cash provided by operating activities: 130 5
---------------------------- ----------------------------
Cash Flows From Investing Activities:
Minimum lease payments received, net of interest
income earned, on leases accounted for under
the financing method -- 2
---------------------------- ----------------------------
Cash provided by investing activities -- 2
---------------------------- ----------------------------
Cash Flows From Financing Activities:
Cash distributions (151) --
---------------------------- ----------------------------
Cash used in financing activities (151) --
---------------------------- ----------------------------
Net (decrease) increase in cash and cash equivalents (21) 7
Cash and cash equivalents, beginning of period 581 518
---------------------------- ----------------------------
Cash and cash equivalents, end of period $ 560 $ 525
============================ ============================
</TABLE>
See notes to financial statements.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1999
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, 1998.
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
reclassifications have been made to the March 31, 1998 amounts
to conform to the March 31, 1999 presentation. The balance
sheet at December 31, 1998 was derived from audited financial
statements at such date.
The results of operations for the three months ended March 31,
1999 and 1998, are not necessarily indicative of the results to
be expected for the full year.
2. Contract for Sale of Property
On April 23, 1999, the Partnership entered into a contract to
sell its remaining property for $1,020,000. If the sale is
consummated, the Partnership will recognize a gain for
financial reporting purposes of approximately $360,000 and a
gain for tax reporting purposes of approximately $500,000.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1999
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, Frank's Nursery and Crafts, Inc.
("Franks"), pursuant to a triple net lease. On April 23, 1999,
the Partnership entered into a contract to sell this property for
$1,020,000. If the sale is consummated, the Partnership will
recognize a gain for financial reporting purposes and the
Partnership will be liquidated. The present lease with Franks
expires in January 2003, subject to extension. The lease was
extended during 1998 at an increase in rent of 8%. At December
31, 1998, the Partnership recorded an accrued distribution
payable of $151,000. These funds were distributed in March of
1999.
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 level of liquidity based on cash and cash equivalents
experienced a $21,000 decrease at March 31, 1999, as compared to
December 31, 1998. The Partnership's $130,000 of cash provided by
operating activities was offset by $151,000 of cash distributed
to partners (financing activities). At March 31, 1999, the
Partnership had approximately $560,000 in cash and cash
equivalents which has been invested primarily in money market
mutual funds.
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.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1999
Item 2. Management's Discussion and Analysis or Plan of Operation
Year 2000
The Year 2000 Issue is the result of computer programs being
written using two digits rather than four to define the
applicable year. The Registrant is dependent upon the Managing
General Partner and its affiliates for management and
administrative services. Any computer programs or hardware that
have date-sensitive software or embedded chips may recognize a
date using "00" as the year 1900 rather than the year 2000. This
could result in system failure or miscalculations causing
disruptions of operations, including, among other things, a
temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
During the first half of 1998, the Managing General Partner and
its affiliates completed their assessment of the various computer
software and hardware used in connection with the management of
the Registrant. This review indicated that significantly all of
the computer programs used by the Managing General Partner and
its affiliates are off-the-shelf "packaged" computer programs
which are easily upgraded to be Year 2000 compliant. In addition,
to the extent that custom programs are utilized by the Managing
General Partner and its affiliates, such custom programs are Year
2000 compliant.
Following the completion of its assessment of the computer
software and hardware, the Managing General Partner and its
affiliates began upgrading those systems which required
upgrading. To date, significantly all of these systems have been
upgraded. The Registrant has to date not borne, nor is it
expected that the Registrant will bear, any significant costs in
connection with the upgrade of those systems requiring
remediation. It is expected that all systems will be remediated,
tested and implemented during the first half of 1999.
To date, the Managing General Partner is not aware of any
external agent with a Year 2000 issue that would materially
impact the Registrant's results of operations, liquidity or
capital resources. However, the Managing General Partner has no
means of ensuring that external agents will be Year 2000
compliant. The Managing General Partner does not believe that the
inability of external agents to complete their Year 2000
resolution process in a timely manner will have a material impact
on the financial position or results of operations of the
Registrant. However, the effect of non-compliance by external
agents is not readily determinable.
Results of Operations
Net income increased by $14,000 for the three months ended March
31, 1999, as compared to the comparable period in 1998, primarily
due to a decrease in expenses of $13,000 and an increase in
income of $1,000. Expenses decreased due to the elimination of
operating expenses from the sale of the Partnership's Columbus,
Ohio property in May 1998.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1999
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, 1999.
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1999
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/ Thomas C. Staples
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Thomas C. Staples
Chief Financial Officer
Dated: May 13, 1999
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WINTHROP PARTNERS 81 LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1999
Exhibit Index
Exhibit Page No.
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 MARCH 31, 1999
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, 1999:
Net income $ 15,000
Less: Cash to reserves (15,000)
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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, 1999:
<TABLE>
<CAPTION>
Entity Receiving Form of
Compensation Compensation Amount
------------------------- ---------------------------------------------- -----------------
<S> <C> <C>
Winthrop
Management LLC Property Management Fees $ 398
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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 560,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 554,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,118,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 994,000
<TOTAL-LIABILITY-AND-EQUITY> 1,118,000
<SALES> 0
<TOTAL-REVENUES> 27,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 15,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 15,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,000
<EPS-PRIMARY> .56
<EPS-DILUTED> .56
</TABLE>
