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 0-11639
WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Maryland 04-2782016
(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>
Interest income
Short-term investments........................................... $ 31,499 $ 17,710 $ 61,703 $ 40,637
Income from Local Limited Partnership
cash distributions.............................................. 186 573 - 186,573 263,298
---------- ----- -------- -------
218,072 17,710 248,276 303,935
---------- ------- -------- -------
Expenses:
Amortization..................................................... 945 945 1,890 1,890
General and administrative....................................... 29,499 30,038 30,889 33,360
---------- ------- ------- ------
30,444 30,983 32,779 35,250
---------- ------- ------- ------
Income (loss) from operations....................................... 187,628 (13,273) 215,497 268,685
Equity in income (loss) of Local Limited
Partnerships (Note 4).............................................. 11,527 121,996 18,116 136,156
---------- --------- --------- -------
Net Income ......................................................... $ 199,155 $ 108,723 $ 233,613 $ 404,841
---------- ---------- ---------- ---------
Net Income allocated to General
Partners........................................................... $ 14,937 $ 8,154 $ 17,521 $ 30,363
---------- ---------- ---------- ---------
Net Income allocated to Limited
Partners........................................................... $ 184,218 $ 100,569 $ 216,092 $ 374,478
---------- ---------- ---------- ---------
Net income per Unit of Limited
Partnership Interest............................................... $ 7.37 $ 4.02 $ 8.64 $ 14.98
---------- ---------- ---------- ---------
</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 (Note 1) (Unaudited) (Audited)
-------------------------------------------- ----------- -----------
ASSETS
<S> <C> <C>
Investments in Local Limited Partnerships............................................ $ 421,031 $ 404,805
Other Assets:
Cash and cash equivalents......................................................... 2,015,975 2,338,714
Interest receivable............................................................... 10,200 10,722
------------ ----------
$ 2,447,206 $2,754,241
------------ ----------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Distributions Payable to partners................................................. $ 270,324 $ 270,324
Partners' Capital:
Limited Partners
Units of Limited Partnership Interest, $1,000 stated value per Unit;
authorized, issued and outstanding -
25,005 Units.................................................................. 3,410,694 3,694,702
General Partners..................................................................... (1,233,812) (1,210,785)
------------ -----------
2,176,882 2,483,917
------------ -----------
$ 2,447,206 $ 2,754,241
------------ -----------
</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.......................................................................... $ 233,613 $ 404,841
Adjustments to reconcile net income to cash (used) provided by operating
activities:
Amortization........................................................................ 1,890 1,890
Equity in loss (income) of Local Limited
Partnerships..................................................................... (18,116) (136,156)
Cash distributions from Local Limited
Partnerships..................................................................... (186,573) (263,298)
Changes in assets and liabilities:
Decrease in distribution payable................................................. - -
(Increase) decrease in interest receivable....................................... 522 (1,080)
----------- ------
Net cash provided by operating activities.......................................... 31,336 6,197
----------- ----------
Cash flows from investing activities:
Cash distributions from Local Limited Partnership................................... 186,573 263,298
----------- -------
Cash flows from financing activities:
Cash distributions paid or accrued to Partners................................... (540,648) (540,648)
----------- --------
Net decrease in cash and cash equivalents............................................. (322,739) (271,153)
Cash and cash equivalents, beginning of period......................................... 2,338,714 3,095,286
----------- ----------
Cash and cash equivalents, end of period............................................... $2,015,975 $2,824,133
----------- ----------
</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 25,005 $(1,210,785) $3,694,702 $2,483,917
Net income 17,521 216,092 233,613
Cash distributions paid or accrued (40,548) (500,100) (540,648)
-------- --------- --------
Balance June 30, 1995 25,005 $(1,233,812) $3,410,694 $2,176,882
------ ------------ ----------- ----------
Balance December 31, 1993 25,005 $(1,152,506) $4,413,480 $3,260,974
Net income 30,363 374,478 404,841
Cash distributions paid or accrued (40,548) (500,100) (540,648)
-------- --------- --------
Balance June 30, 1994 25,005 $(1,162,691) $4,287,858 $3,125,167
------ ------------ ----------- ----------
</TABLE>
The accompanying notes are an integral part of
these financial statements.
5
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 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
Effective January 1, 1991, the managing general partner resumed
quarterly distributions which are funded from cash available for
distribution and from reserves.
3. TAX LOSS
The Partnership's tax 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.
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. 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.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Partnership has an equity interest in seven Local Limited Partnerships, all
of which own fully operating apartment complexes. The Partnership has recognized
its proportionate share of losses from the Local Limited Partnerships through
June 30, 1995 to the extent that investment balances remain positive.
Net income for the first six months of 1995 was $233,613 compared to $404,841
for the first six months of 1994. This decrease in net income was the result of
a decrease in income from the Local Limited Partnership cash distributions and a
decrease in equity in income of Local Limited Partnerships. The Local Limited
Partnership owning Village Square distributed $186,573 to the Partnership during
the first six months of 1995 versus $263,298 during the first six months of
1994. This decrease can be attributed to higher operating expenses and capital
improvements and lower replacement reserve withdrawals.
The Partnership requires cash to pay general and administrative expenses. All
cash requirements are satisfied by interest income on short-term investments and
cash distributions from Local Limited Partnerships. As of June 30, 1995 the
Partnership had available reserves of approximately $2,000,000.
Two properties owned by Local Limited Partnerships in which the Partnership has
an interest, Autumn Chase and Clear Creek, had previously defaulted on their
mortgages. Currently, both properties are operating under provisional workout
arrangement with the U.S. Department of Housing and Urban Development ("HUD").
The workout arrangements are effective through April 2000 and July 1995,
respectively. Currently, the local general partner of Clear Creek is negotiating
with HUD for a new one-year workout agreement. The Local Limited Partnership
owning Dunhaven Apartments, Section 2, Phase 2, defaulted on its mortgage
obligation in June 1994. The mortgage was assigned to HUD on March 23, 1995.
The five properties owned by the remaining Local Limited Partnerships in which
the Partnership retains an ownership interest met their financial obligations
during the second quarter of 1995.
Variations for future interim periods will occur as the operating results of the
Local Limited Partnerships change and the Partnership sells its interests in
Local Limited Partnerships and the gains are recognized.
7
<PAGE>
SUPPLEMENTARY INFORMATION
REQUIRED PURSUANT TO SECTION 9.4 OF THE PARTNERSHIP AGREEMENT
June 30, 1995 (Unaudited)
<TABLE>
1. Statement of Cash Available for Distribution for the three months ended
June 30, 1995
<S> <C>
Net income..................................................................... $ 199,155
Add: Amortization expense...................................................... 945
Cash from Reserves........................................................ 81,751
Less: Equity in income of Local Limited
Partnerships............................................................... (11,527)
---------
Cash Available for Distribution................................................ $ 270,324
---------
Distributions allocated to General Partners.................................... $ 20,274
---------
Distributions allocated to Limited Partners.................................... $ 250,050
---------
</TABLE>
2. Fees or 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>
General Partners Interest in Cash
Available for Distribution $20,274
WFC Realty Co., Inc. Interest in Cash
Available for Distribution $ 50
</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 - OTHER INFORMATION
The Partnership's tax loss is anticipated to be $12 to $32 per unit. These
figures are estimates only and are based on certain assumptions. Some of these
assumptions may not materialize and unanticipated events and circumstances may
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 III,
A LIMITED PARTNERSHIP
(Registrant)
By: Two 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
<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> 0000711418
<NAME> Winthrop Residential Associates III
<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> 2,015,975
<SECURITIES> 0
<RECEIVABLES> 10,200
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,026,175
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,447,206
<CURRENT-LIABILITIES> 270,324
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,176,882
<TOTAL-LIABILITY-AND-EQUITY> 2,447,206
<SALES> 0
<TOTAL-REVENUES> 248,276
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 32,779
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 215,497
<INCOME-TAX> 0
<INCOME-CONTINUING> 215,497
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 233,613
<EPS-PRIMARY> 8.640
<EPS-DILUTED> 0.000
</TABLE>
