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 September 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 _________
PART 1 - FINANCIAL INFORMATION
STATEMENTS OF OPERATIONS
<TABLE>
Three Months Ended Nine Months Ended
September 30, September 30,
(Unaudited) (Note 1) 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Income from Local Limited Partnership cash
distributions...................................................... $ 190,618 $ 96,682 $ 520,616 $ 361,324
Interest income..................................................... 27,359 15,914 72,786 39,817
---------- ---------- ----------- ---------
217,977 112,596 593,402 401,141
---------- -------- -------- -------
Expenses:
General and administrative....................................... 4,863 4,523 45,955 39,428
Management fee................................................... 19,062 9,668 58,812 36,132
---------- ------- ------- ------
23,925 14,191 104,767 75,560
---------- ------- -------- ------
Net Income.......................................................... $ 194,052 $ 98,405 $ 488,635 $ 325,581
---------- --------- ----------- ----------
Net income allocated to General
Partners........................................................... $ 9,702 $ 4,920 $ 24,432 $ 16,279
---------- ---------- ---------- ---------
Net income allocated to Limited
Partners........................................................... $ 184,350 $ 93,485 $ 464,203 $ 309,302
---------- ---------- ---------- ---------
Net income per Unit of Limited
Partnership Interest............................................... $ 7.37 $ 3.74 $ 18.56 $ 12.37
---------- ---------- ---------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
BALANCE SHEETS
September 30, December 31,
1995 1994
(Unaudited) (Audited)
ASSETS
<S> <C> <C>
Investments in Local Limited Partnerships ........................................... $ - $ -
Other Assets:
Cash and cash equivalents......................................................... 1,947,271 1,565,490
Other Assets...................................................................... 8,866 74,730
------------ ----------
$ 1,956,137 $ 1,640,220
------------ -----------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses............................................. $ 14,757 $ 3,194
Distributions Payable............................................................. 78,979 52,653
------------ -----------
93,736 55,847
------------ -----------
Partners' Capital:
Limited Partners
Units of Limited Partnership Interest, $1,000 stated value per Unit;
authorized, issued and outstanding -
25,010 Units.................................................................. 2,857,035 2,592,911
General Partners..................................................................... ( 994,634) (1,008,538)
------------ -----------
1,862,401 1,584,373
------------ -----------
$ 1,956,137 $ 1,640,220
------------ -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
STATEMENTS OF CASH FLOWS
For The Nine Months Ended
September 30, 1995 and 1994 (Unaudited) (Note 1) 1995 1994
Cash flows from operating activities:
<S> <C> <C>
Net income.......................................................................... $ 488,635 $ 325,581
Adjustments to reconcile net income to cash
provided by (used in) operating activities:
Cash distributions from Local Limited Partnerships................................. (520,616) (361,324)
Changes in assets and liabilities:
Decrease (increase) in other assets.............................................. 65,864 (1,818)
Increase (decrease) in accounts payable and accrued
expenses....................................................................... 11,563 (3,465)
Increase in distribution payable................................................. 26,326 -
------------ ----
Net cash provided by (used in) operating activities................................ 71,772 (41,026)
------------ -----------
Cash flows from investing activities:
Cash distributions from Local Limited Partnerships.................................. 520,616 361,324
------------ -------
Cash flows from financing activities:
Cash distributions paid or accrued to partners................................... (210,607) (157,959)
------------ --------
Net increase in cash and cash equivalents.............................................. 381,781 162,339
Cash and cash equivalents, beginning of period......................................... 1,565,490 1,411,237
------------ ---------
Cash and cash equivalents, end of period............................................... $ 1,947,271 $ 1,573,576
------------ -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
UNITS OF
For the Nine Months Ended LIMITED GENERAL LIMITED
September 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........................................... 24,432 464,203 488,635
Cash distributions paid or accrued................... (10,528) (200,079) (210,607)
--------- --------- --------
Balance September 30, 1995........................... 25,010 $ (994,634) $2,857,035 $1,862,401
------ ------------ ----------- ----------
Balance December 31, 1993............................ 25,010 $(1,019,826) $2,378,411 $1,358,585
Net income........................................... 16,279 309,302 325,581
Cash distributions paid or accrued................... (7,899) (150,060) (157,959)
------- --------- --------
Balance September 30, 1994........................... 25,010 $(1,011,446) $2,537,653 $1,526,207
---------- ------------ ----------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 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. INVESTMENT 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 Partnerships' results of
operations and by distributions received or accrued. Costs relating to the
acquisition and selection of the investment in the Local Limited
Partnerships 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. Costs in excess of the Partnership's initial basis
in the net assets of the Local Limited Partnerships are amortized over the
estimated useful lives of the underlying assets. Equity in the loss of
Local Limited Partnerships is not recognized to the extent that the
investment balance would become negative. As of December 31, 1991 all
investments in Local Limited Partnerships had zero balances.
<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 income from Local Limited Partnerships through
September 30, 1995.
The Partnership generated net income of $488,635 during the first nine
months of 1995 compared to net income of $325,581 for the first nine
months of 1994. This resulted primarily from an increase in income from
Local Limited Partnership cash distributions. Local Limited Partnerships
owning Cibola, Mountain Vista I, Mountain Vista II, Crofton Village Apts.
and Honeywood, made cash distributions of $520,616 to the Partnership
during the first nine months of 1995 compared to $361,324 during the same
period in 1994. Variations in future interim periods will occur as the
operating results of the Local Limited Partnership change and the
Partnership sells its interests in the Local Limited Partnerships and the
gains are recognized.
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 September 30, 1995, the Partnership had
available net reserves of approximately $1,900,000.
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, bringing debt service payments to a
serviceable level.
Southwest Parkway's mortgage note is expected to be sold in a HUD auction
to be held in 1996. 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.
<PAGE>
SUPPLEMENTARY INFORMATION
REQUIRED PURSUANT TO SECTION 9.4 OF THE PARTNERSHIP AGREEMENT
September 30, 1995 (Unaudited)
<TABLE>
1. Statement of Cash Available for Distribution for the three months ended
September 30, 1995
<S> <C>
Net income...................................................................................... $ 194,052
Less: Cash added to reserves................................................................. (115,073)
---------
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
September 30, 1995:
<TABLE>
Entity Receiving Form
Compensation of Compensation Amount
<S> <C> <C>
WP Management Co., Inc. Management Fees $19,062
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.
<PAGE>
PART II - ITEM 5 - OTHER INFORMATION
All items are inapplicable.
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/ Anthony R. Page
Anthony R. Page
Chief Financial Officer
By:/s/Richard J. McCready
Richard J. McCready
Chief Operating Officer
DATED: November 3, 1995
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from unaudited financial statements for the
nine month period ending September 30, 1995 and is
qualified in its entirety by reference to such financial
statements
</LEGEND>
<CIK> 0000356141
<NAME> Winthrop Residential Associates II
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1.00000
<CASH> 1,947,271
<SECURITIES> 0
<RECEIVABLES> 8,866
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,956,137
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,956,137
<CURRENT-LIABILITIES> 93,736
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1,862,401
<TOTAL-LIABILITY-AND-EQUITY> 1,956,137
<SALES> 0
<TOTAL-REVENUES> 217,977
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 23,925
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 194,052
<INCOME-TAX> 0
<INCOME-CONTINUING> 194,052
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 194,052
<EPS-PRIMARY> 7.37
<EPS-DILUTED> 0.00
</TABLE>
