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 0-11639
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 Nine Months Ended
September 30, September 30,
(Unaudited) (Note 1) 1995 1994 1995 1994
- -------------------- ------------------------ -------------------
<S> <C> <C> <C> <C>
Income
Short-term taxable investments..................................... $ 25,859 $ 36,756 $ 87,562 $ 77,394
Income from Local Limited
Partnership cash distributions.................................. 50 - 186,623 263,298
---------- ------- -------- -------
25,909 36,756 274,185 340,692
---------- ------- -------- -------
Expenses:
Amortization..................................................... 945 945 2,835 2,835
General and administrative....................................... 4,603 4,246 35,491 37,608
---------- ------- ------- ------
5,548 5,191 38,326 40,443
---------- ------- ------- ------
Income from operations.............................................. 20,361 31,565 235,859 300,249
Equity in income (loss) of Local Limited
Partnerships ...................................................... 35,969 (129,063) 54,085 7,093
---------- ---------- -------- -------
Net income (loss) .................................................. $ 56,330 $ (97,498) $ 289,944 $307,342
---------- ----------- ---------- --------
Net income (loss) allocated to General
Partners........................................................... $ 4,225 $ (7,312) $ 21,746 $ 23,050
---------- ------------ ---------- ---------
Net income (loss) allocated to Limited
Partners........................................................... $ 52,105 $ (90,186) $ 268,198 $ 284,292
---------- ----------- ---------- ---------
Net income (loss) per Unit of Limited
Partnership Interest............................................... $ 2.08 $ (3.61) $ 10.73 $ 11.37
---------- ----------- ---------- ---------
</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............................................ $ 456,055 $ 404,805
Other Assets:
Cash and cash equivalents......................................................... 1,769,009 2,338,714
Interest receivable............................................................... 8,044 10,722
------------ ----------
$ 2,233,108 $2,754,241
------------ ----------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Distributions Payable to partners................................................. $ 189,123 $ 270,324
Partners' Capital:
Limited Partners
Units of Limited Partnership Interest, $1,000 stated value per Unit;
authorized, issued and outstanding -
25,005 Units.................................................................. 3,287,765 3,694,702
General Partners..................................................................... (1,243,780) (1,210,785)
------------ -----------
</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
<S> <C> <C>
Cash flows from operating activities:
Net income.......................................................................... $ 289,944 $ 307,342
Adjustments to reconcile net income to cash (used in)
provided by operating activities:
Amortization........................................................................ 2,835 2,835
Equity in income of Local Limited Partnerships...................................... (54,085) (7,093)
Cash distributions from Local Limited Partnerships.................................. (186,623) (263,298)
Changes in assets and liabilities:
Decrease (increase) in interest receivable....................................... 2,678 (1,540)
(Decrease) in distributions payable.............................................. (81,201) -
------------ ------
Net cash (used in) provided by operating activities................................ (26,452) 38,246
------------ ----------
Cash flows from investing activities:
Cash distributions from Local Limited Partnership................................... 186,623 263,298
------------ -------
Cash flows from financing activities:
Cash distributions paid or accrued to Partners................................... (729,876) (810,972)
------------ ----------
Net decrease in cash and cash equivalents.............................................. (569,705) (509,428)
Cash and cash equivalents, beginning of period......................................... 2,338,714 3,095,286
------------ ----------
Cash and cash equivalents, end of period............................................... $ 1,769,009 $ 2,585,858
</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............................ 25,005 $(1,210,785) $3,694,702 $2,483,917
Net income........................................... 21,746 268,198 289,944
Cash distributions paid or accrued................... (54,741) (675,135) (729,876)
------- ------------ ----------- ----------
Balance September 30, 1995........................... 25,005 (1,243,780) 3,287,765 2,043,985
--------- ----------- ---------- ---------
Balance December 31, 1993............................ 25,005 $(1,152,506) $4,413,480 $3,260,974
Net income........................................... 23,050 284,292 307,342
Cash distributions paid or accrued................... (60,822) (750,150) (810,972)
Balance September 30, 1994........................... 25,005 $(1,190,278) $3,947,622 $2,757,344
---------- ------------ ----------- ----------
</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
Effective January 1, 1991, the Managing General Partner resumed
quarterly distributions which are funded 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,
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. 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.
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
September 30, 1995 to the extent that investment balances remain positive.
Net income for the first nine months of 1995 was $289,944 compared to $307,342
for the first nine months of 1994. This decrease in net income was the result of
a decrease in income from Local Limited Partnership cash distributions which was
partially offset by an increase in equity in income of a Local Limited
Partnership, Maple Manor. The Local Limited Partnership owning Village Square
distributed $186,573 to the Partnership during the first nine months of 1995
versus $263,298 during the first nine 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 September 30, 1995 the
Partnership had available reserves of approximately $1,750,000.
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 May 1998,
respectively. 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. Winthrop is currently working with the
general partner of Dunhaven Apartments, Section 2, Phase 2, to bring the
mortgage current.
The five properties owned by the remaining Local Limited Partnerships in which
the Partnership retains an ownership interest met their financial obligations
during the third 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.
SUPPLEMENTARY INFORMATION
REQUIRED PURSUANT TO SECTION 9.4 OF THE PARTNERSHIP AGREEMENT
September 30, 1995
(Unaudited)
1. Statement of Cash Available for Distribution for the three months ended
September 30, 1995:
<TABLE>
<S> <C>
Net income....................................................... $ 56,330
Add: Charges to income not affecting cash available for
distributions:
Amortization expense....................................... 945
Equity in income of Local Limited Partnership.............. (35,969)
Cash from Reserves......................................... 167,817
---------
Cash Available for Distribution............................. $ 189,123
---------
Distributions allocated to General Partners....................... $ 14,088
---------
Distributions allocated to Limited Partners....................... $ 175,035
---------
</TABLE>
2. Fees or 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 of
Compensation Compensation Amount
<S> <C>
General Partners Interest in Cash
Available for Distribution $14,088
WFC Realty Co., Inc. Interest in Cash
Available for Distribution $ 35
</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.
PART II - 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 III,
A LIMITED PARTNERSHIP
(Registrant)
By: Two 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
<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> 0000711418
<NAME> Winthrop Residential Associates III
<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> 1,769,009
<SECURITIES> 0
<RECEIVABLES> 8,044
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,777,053
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,233,108
<CURRENT-LIABILITIES> 189,123
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,043,985
<TOTAL-LIABILITY-AND-EQUITY> 2,233,108
<SALES> 0
<TOTAL-REVENUES> 274,185
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 38,326
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 235,859
<INCOME-TAX> 0
<INCOME-CONTINUING> 235,859
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 289,944
<EPS-PRIMARY> 10.73
<EPS-DILUTED> 0.00
</TABLE>
