SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1995 Commission File Number 0-11063
WINTHROP RESIDENTIAL ASSOCIATES II, A LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Maryland 04-2742158
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One International Place, Boston, MA 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 330-8600
Indicate by check mark whether the 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>
PART 1 - FINANCIAL INFORMATION
STATEMENTS OF OPERATIONS
<TABLE>
------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
(Unaudited) (Note 1) 1995 1994 1995 1994
-------------------- ----------------------- ---------------
<S> <C> <C> <C> <C>
Income from Local Limited Partnership cash
distributions...................................................... $ 235,030 197,142 $ 329,998 $ 264,642
Interest income..................................................... 23,905 12,562 45,427 23,902
--------- ------ ------ -----------
258,935 209,704 375,425 288,544
--------- ------- ------- -------
Expenses:
General and administrative....................................... 30,868 31,026 41,092 34,904
Management fee................................................... 23,503 19,714 39,750 26,464
--------- ------ ------ ------
54,371 50,740 80,842 61,368
--------- --------- ------ -------
Net income ......................................................... $ 204,564 $ 158,964 $ 294,583 227,176
--------- --------- --------- ----------
Net income allocated to General
Partners........................................................... $ 10,228 $ 7,948 $ 14,729 $ 11,359
--------- ------------ --------- ----------
Net income allocated to Limited
Partners........................................................... $ 194,336 $ 151,016 $ 279,854 $ 215,517
--------- --------- --------- ----------
Net income per Unit of Limited
Partnership Interest............................................... $ 7.77 $ 6.04 $ 11.19 $ 8.63
--------- --------- --------- -----------
</TABLE>
The accompanying notes are an integral part of
these financial statements.
2
<PAGE>
BALANCE SHEETS
<TABLE>
-----------------------------------------------------------------------------------------
June 30, December 31,
1995 1994
June 30, 1995 and December 31, 1994 (Unaudited) (Audited)
------------------------------------------- ----------- -----------
ASSETS
<S> <C> <C>
Investments in Local Limited Partnerships (Note 4)................................... $ - $ -
------------ --------
Other Assets:
Cash and cash equivalents......................................................... 1,818,864 1,565,490
Other assets...................................................................... 7,560 74,730
------------ ----------
$ 1,826,424 $1,640,220
------------ ----------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses............................................. $ 121 $ 3,194
Distributions Payable............................................................. 78,979 52,653
------------ -----------
79,100 55,847
------------ -----------
Partners' Capital:
Limited Partners
Units of Limited Partnership Interest, $1,000 stated value per Unit;
authorized, issued and outstanding -
25,010 Units.................................................................. 2,747,715 2,592,911
General Partners..................................................................... (1,000,391) (1,008,538)
------------ -----------
1,747,324 1,584,373
------------ -----------
$ 1,826,424 $ 1,640,220
------------ -----------
</TABLE>
The accompanying notes are an integral part of
these financial statements.
3
<PAGE>
STATEMENTS OF CASH FLOWS
<TABLE>
-------------------------------------------------------------------------------------
For The Six Months Ended
June 30, 1995 and 1994 (Unaudited) (Note 1) 1995 1994
--------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income.......................................................................... $ 294,583 $ 227,176
Adjustments to reconcile net income to cash used
by operating activities:
Income from Local Limited Partnership cash
distributions.................................................................... (329,998) (264,642)
Changes in assets and liabilities:
(Increase) decrease in other assets.............................................. 67,170 (934)
Increase (decrease) in accounts payable and accrued
expenses.................................................................... (3,073) 26,402
Increase in distributions payable................................................ 26,326 -
Net cash provided by (used in)
operating activities........................................................... 55,008 (11,998)
------------ ----------
Cash flows from investing activities:
Cash distributions from Local
Limited Partnerships................................................................. 329,998 264,642
------------ -------
Cash flows from financing activities:
Cash distributions paid or accrued to partners................................... (131,632) (105,306)
------------ --------
Net increase in cash and cash equivalents.............................................. 253,374 147,338
Cash and cash equivalents, beginning of period......................................... 1,565,490 1,411,237
------------ ---------
Cash and cash equivalents, end of period............................................... $ 1,818,864 $ 1,558,575
------------ -----------
</TABLE>
The accompanying notes are an integral part of
these financial statements.
4
<PAGE>
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
<TABLE>
---------------------------------------------------------------------------------------
UNITS OF
For the Six Months Ended LIMITED GENERAL LIMITED
June 30, 1995 and 1994 PARTNERSHIP PARTNERS' PARTNERS' TOTAL
(Unaudited (Note 1) INTEREST CAPITAL CAPITAL CAPITAL
------------------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Balance, December 31, 1994........................... 25,010 $(1,008,538) $ 2,592,911 $ 1,584,373
Net income........................................... 14,729 279,854 294,583
Cash distributions paid or accrued ................. (6,582) (125,050) (131,632)
------- ------- --------- --------
Balance, June 30, 1995............................... 25,010 $ (1,000,391) $2,747,715 $1,747,324
====== ============== =========== ==========
Balance, December 31, 1993........................... 25,010 $(1,019,826) $2,378,411 $1,358,585
Net income........................................... 11,359 215,817 227,176
Cash distributions paid or accrued................... (5,266) (100,040) (105,306)
- -------- --------- --------
Balance, June 30, 1994............................... 25,010 $(1,013,733) $2,494,188 $1,480,455
====== ============ =========== ==========
</TABLE>
The accompanying notes are an integral part of
these financial statements.
5
<PAGE>
NOTES TO FINANCIAL STATEMENTS JUNE 31, 1995 (UNAUDITED)
1. ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein have been prepared by
the Registrant, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. The Registrant's accounting and
financial reporting policies are in conformity with generally accepted
accounting principles and include adjustments in interim periods
considered necessary for a fair presentation of the results of operations.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such
rules and regulations. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and the
notes thereto included in the Registrant's latest annual report on Form
10-K.
The accompanying financial statements reflect the Partnership's results of
operations for an interim period and are not necessarily indicative of the
results of operations for the year ending December 31, 1995.
2. CASH AVAILABLE FOR DISTRIBUTION
Distributions are made on a quarterly basis from cash available for
distribution and reserves.
3. TAX INCOME/LOSS
The Partnership's tax income/loss for 1995 is expected to differ from that
for financial reporting purposes primarily due to accounting differences
in the recognition of construction period costs and depreciation incurred
by the Local Limited Partnerships and differences in the recognition of
equity in loss of Local Limited Partnerships under the equity method of
accounting described below.
4. INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS
The Partnership accounts for its investment in each Local Limited
Partnership on the equity method of accounting. The investment cost
(including amounts paid or accrued) is subsequently adjusted by the
Partnership's share of the Local Limited Partnership's results of
operations and by distributions received or accrued. Costs relating to the
acquisition and selection of the investment in the Local Limited
Partnership are capitalized to the investment account and amortized over
the life of the investment or until the investment balance has been
written down to zero. Equity in the loss of Local Limited Partnerships is
not recognized to the extent that the investment balance becomes negative.
As of December 31, 1991 all investments in the Local Limited Partnerships
had zero balances.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Partnership has equity interests in nine Local Limited Partnerships which
own eleven apartment complexes. The Partnership has recognized its proportionate
share of losses from Local Limited Partnerships through June 30, 1995.
The Partnership generated net income of $294,583 during the first six months of
1995 compared to net income of $227,176 for the first six months of 1994. This
resulted primarily from an increase in income from Local Limited Partnership
cash distributions. Local Limited Partnerships owning, Mountain Vista I,
Mountain Vista II, Cibola, Crofton Village Apts. and Honeywood, made cash
distributions of $329,998 to the Partnership.
The Partnership requires cash to pay general and administrative expenses. All
cash requirements are satisfied by interest income earned on short-term
investments and reserves and cash distributions from Local Limited Partnerships.
As of June 30, 1995, the Partnership had available net reserves of approximately
$1,800,000.
In April 1995, Sanford Landing and the U.S. Department of Housing and Urban
Development ("HUD") negotiated a workout agreement which involved restructuring
the property's mortgage. A portion of the property's mortgage was reassigned to
the original mortgagee. The remaining balance will continue to be held by HUD.
The restructuring essentially lowered the annual interest rate on the debt which
will bring debt service payments to a serviceable level.
HUD has recently informed the Partnership that Southwest Parkway's mortgage will
be included in an auction to be held in the fall of 1995. Efforts will be made
to negotiate a workout agreement with the new mortgagee. Since Southwest
Parkway's mortgage default in 1987, efforts to secure a workout agreement with
HUD have failed.
SUPPLEMENTARY INFORMATION
REQUIRED PURSUANT TO SECTION 9.4 OF THE PARTNERSHIP AGREEMENT
<TABLE>
----------------------------------------------------------------------------------
June 30, 1995 (Unaudited)
1. Statement of Cash Available for Distribution for the three months ended
June 30, 1995
<S> <C>
Net income..................................................................... $ 204,564
Cash added to reserves......................................................... (125,585)
---------
Cash Available for Distribution................................................ $ 78,979
---------
Distributions allocated to General Partners.................................... $ 3,949
---------
Distributions allocated to Limited Partners.................................... $ 75,030
---------
</TABLE>
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, 1995:
<TABLE>
----------------------------------------------------------------------------------
Entity Receiving Form
Compensation of Compensation Amount
<S> <C> <C>
WP Management Co., Inc. Management Fees $23,503
General Partners Distribution and Interest
in Cash Available for
Distribution $3,949
WFC Realty Co., Inc. Distribution and Interest
(Assignor Limited Partner) in Cash Available for
Distribution $ 15
</TABLE>
All other information required pursuant to Section 9.4 of the Partnership
Agreement is set forth in the attached Report on Form 10-Q or Partnership
Report.
8
<PAGE>
PART II - ITEM 5 - OTHER INFORMATION
The Partnership's tax loss is anticipated to be $75 to $95 per unit. These
figures are estimates only and are based on certain assumptions. Some of these
assumptions may not occur so that actual results achieved will probably vary
from the projected figures above.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
WINTHROP RESIDENTIAL ASSOCIATES II,
A LIMITED PARTNERSHIP
(Registrant)
By: ONE WINTHROP PROPERTIES, INC.
Managing General Partner
By:/s/F.X. Jacoby
F. X. Jacoby
Chief Accounting Officer
By:/s/Richard J. McCready
Richard J. McCready
Chief Operating Officer
DATED: August 14, 1995
9
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from unaudited financial statements for the
period ending June 30, 1995 and is qualified
in its entirety by reference to such financial statements
</LEGEND>
<CIK> 0000356141
<NAME> Winthrop Residential Asso
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1.00000
<CASH> 1,818,864
<SECURITIES> 0
<RECEIVABLES> 7,560
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,826,424
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,826,424
<CURRENT-LIABILITIES> 79,100
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1,747,324
<TOTAL-LIABILITY-AND-EQUITY> 1,826,424
<SALES> 0
<TOTAL-REVENUES> 375,425
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 80,842
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 294,583
<INCOME-TAX> 0
<INCOME-CONTINUING> 294,583
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 294,583
<EPS-PRIMARY> 11.190
<EPS-DILUTED> 0.000
</TABLE>
