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 March 31, 1995 Commission File Number 0-11639
-------------- -------
WINTHROP RESIDENTIAL ASSOCIATES III, A LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Maryland 04-278016
(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 I - FINANCIAL INFORMATION
<TABLE>
STATEMENTS OF OPERATIONS
- ----------------------------------------------------------------------------
For The Three Months Ended March 31, 1995 and 1994
(Unaudited) (Note 1) 1995 1994
<S> <C> <C>
Interest income:
Short-term investments............................................... $ 30,204 $ 22,927
Income from Local Limited Partnership
cash distributions.................................................. - 263,298
---------- -------
30,204 286,225
---------- ---------------
Expenses:
Amortization......................................................... 945 945
General and administrative........................................... 1,389 3,323
---------- ---------
2,334 4,268
---------- ---------
Income from operations................................................. 27,870 281,957
Equity in income (loss) of Local Limited
Partnerships (Note 4)................................................. 6,589 14,160
---------- ---------
Net income ............................................................ $ 34,459 $ 296,117
---------- ---------
Net income allocated to General
Partners............................................................. $ 2,584 $ 22,209
---------- ---------
Net income allocated to Limited
Partners............................................................. $ 31,875 $ 273,908
---------- ---------
Net income per Unit of Limited
Partnership Interest................................................. $ 1.27 $ 10.95
---------- ---------
.......................................................................
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BALANCE SHEETS
<TABLE>
March 31, December 31,
1995 1994
March 31, 1995 and December 31, 1994 (Note 1) (Unaudited) (Audited)
- --------------------------------------------- ----------- -----------
ASSETS
<S> <C> <C>
Investments in Local Limited Partnerships
(Note 4)............................................................. $ 410,449 $ 404,805
Other Assets:
Cash and cash equivalents............................................ 2,098,227 2,338,714
Interest receivable.................................................. 9,700 10,722
------------ ------
$ 2,518,376 $ 2,754,241
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LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Distribution 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............................ 3,476,527 3,694,702
General Partners..................................................... (1,228,475) (1,210,785)
------------ ----------
2,248,052 2,483,917
------------ ---------
$ 2,518,376 $ 2,754,241
------------ -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENTS OF CASH FLOWS
<TABLE>
For the Three Months Ended
March 31, 1995 and 1994 (Unaudited) (Note 1) 1995 1994
- -------------------------------------------- ------ --------
<S> <C> <C>
Cash flows from operating activities:
Net income ........................................................................... $ 34,459 $ 296,117
Adjustments to reconcile net income to cash (used) provided
by operating activities:
Amortization......................................................................... 945 945
Equity in loss (income) of Local Limited Partnerships................................ (6,589) (14,160)
Changes in assets and liabilities:
Decrease (increase) in interest receivable...................................... 1,022 (422)
------------ ------
Net cash provided by operating activities........................................... 29,837 282,480
------------ ----------
Cash flows from financing activities:
Cash distributions paid or accrued to Partners........................................ (270,324) (270,324)
------------ --------
Net increase (decrease) in cash and cash equivalents.................................... (240,487) 12,156
Cash and cash equivalents, beginning of period.......................................... 2,338,714 3,095,286
------------ ---------
Cash and cash equivalents, end of period................................................ $ 2,098,227 $ 3,107,442
------------ -----------
.......................................................................................
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
UNITS OF
For the Three Months Ended LIMITED GENERAL LIMITED
March 31, 1995 and 1994 PARTNERSHIP PARTNERS' PARTNERS' TOTAL
(Unaudited) (Note 1) INTEREST CAPITAL CAPITAL CAPITAL
- -------------------- --------- -------- -------- --------
<S> <C> <C> <C> <C>
Balance December 31, 1993.................................. 25,005 $(1,152,506) $ 4,413,480 $ 3,260,974
Cash distributions paid or accrued......................... (20,274) (250,050) (270,324)
Net income................................................. 22,209 273,908 296,117
------ ------- -------- -------
Balance March 31, 1994..................................... 25,005 $(1,150,571) $ 4,437,338 $ 3,286,767
------ ------------ ------------ -----------
Balance December 31, 1994.................................. 25,005 $(1,210,785) $ 3,694,702 $ 2,483,917
Cash distributions paid or accrued......................... (20,274) (250,050) (270,324)
Net income................................................. 2,584 31,875 34,459
------ ------ ------- ------
Balance March 31, 1995..................................... 25,005 $(1,228,475) $3,476,527 $2,248,052
------ ------------ ----------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
March 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
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.
<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
March 31, 1995 to the extent that investment balances remain positive.
Net income for the first three months of 1995 was $34,459 compared to $296,117
for the first three months of 1994. This decrease in net income was the result
of a decrease in income from Local Limited Partnership cash distributions. The
Local Limited Partnership owning Village Square made a cash distribution to the
Partnership during the first three months of 1994, while the distribution in
1995 was made subsequent to the first three months of this year.
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 March 31, 1995 the
Partnership had available reserves of approximately $2,300,000.
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 Department. The
workout arrangements are effective through April 2000 and July 1995,
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.
The five properties owned by the remaining Local Limited Partnerships in which
the Partnership retains an ownership interest met their financial obligations
during the first 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.
<PAGE>
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/ Jonathan W. Wexler
Jonathan W. Wexler
Chief Financial Officer
By: /s/ Richard J. McCready
Richard J. McCready
Managing Director
DATED: May 13, 1995
<PAGE>
SUPPLEMENTARY INFORMATION
REQUIRED PURSUANT TO SECTION 9.4 OF THE PARTNERSHIP AGREEMENT
March 31, 1995
(Unaudited)
1. Statement of Cash Available for Distribution for the three months ended
March 31, 1995:
<TABLE>
<S> <C>
Net income........................................................................................... $ 34,459
Add: Amortization expense........................................................................ 945
Cash from reserves............................................................................ 241,509
Equity in loss of Local Limited Partnerships.................................................. (6,589)
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
March 31, 1995.
<TABLE>
Entity Receiving Form of
Compensation 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>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from unaudited financial statements for the
period ending March 31, 1995 and is qualified
in its entirety by reference to such financial statements
</LEGEND>
<CIK> 0000711418
<NAME> Winthrop Residential Associates III Ltd Prtrnrshp
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1.00000
<CASH> 2,098,227
<SECURITIES> 0
<RECEIVABLES> 9,700
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,107,927
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,518,376
<CURRENT-LIABILITIES> 270,324
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,248,052
<SALES> 0
<TOTAL-REVENUES> 30,204
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (4,255)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 34,459
<INCOME-TAX> 0
<INCOME-CONTINUING> 34,459
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34,459
<EPS-PRIMARY> 1.270
<EPS-DILUTED> 0.000
</TABLE>
