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 the Quarter Ended September 30, 1995 Commission File Number 2-84760
WINTHROP GROWTH INVESTORS 1 LIMITED PARTNERSHIP
Massachusetts 04-2839837
(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
ITEM 1. - FINANCIAL STATEMENTS
STATEMENTS OF OPERATIONS
<TABLE>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Income
Rental $ 1,621,112 $ 1,542,973 $ 4,783,619 $ 4,575,195
Interest on short-term investments 10,801 11,753 34,337 43,908
Other 73,829 70,583 203,866 193,417
------------ ------------ ------------ ------------
1,705,742 1,625,309 5,021,822 4,812,520
----------- ----------- ----------- -----------
Expenses
Leasing 59,207 57,048 162,928 144,082
General & administrative 68,000 74,539 229,639 207,605
Management Fees 82,151 76,928 245,816 237,060
Utilities 152,331 151,219 456,599 446,021
Repairs & Maintenance 312,501 322,335 927,578 909,723
Insurance 64,316 62,482 195,765 178,885
Taxes 134,176 124,139 397,770 389,810
---------- ----------- ----------- -----------
Total operating expenses 872,682 868,690 2,616,095 2,513,186
Other expenses
Depreciation 414,585 407,796 1,238,350 1,223,396
Amortization 25,315 31,006 75,951 93,012
Interest expense 475,042 526,075 1,431,257 1,551,441
Other expenses 14,811 26,255 93,371 121,811
----------- ----------- ----------- -----------
Total expenses 1,802,435 1,859,822 5,455,024 5,502,846
----------- ----------- ----------- -----------
Net loss $ (96,693) $ (234,513) $ (433,202) $ (690,326)
=========== =========== =========== ===========
Net loss allocated
General Partners $ (9,669) $ (23,451) $ (43,320) $ (69,033)
Limited Partners $ (87,024) $ (211,062) $ (389,882) $ (621,293)
----------- ------------ ------------ -----------
$ (96,693) $ (234,513) $ (433,202) $ (690,326)
=========== ============= ============= ==========
Net loss per unit outstanding - Limited Partners $ (3.76) $ (9.12) $ (16.85) $ (26.85)
============ ============= ============= =============
</TABLE>
See notes to Financial Statements.
<PAGE>
BALANCE SHEETS
<TABLE>
September 30, December 31,
1995 1994
(Unaudited) (Audited)
ASSETS
<S> <C> <C>
Investment in Real Estate
Land $ 4,015,369 $ 4,015,369
Buildings and improvements 37,573,438 37,218,583
------------ ------------
41,588,807 41,233,952
Less accumulated depreciation 18,022,195 16,783,845
------------ ------------
23,566,612 24,450,107
Cash and cash equivalents 913,853 923,214
Tenant security deposits - funded 144,709 125,295
Accounts receivable and other receivables 29,864 27,542
Escrow accounts 383,024 250,622
Reserve accounts 373,578 413,464
Deferred costs, net of accumulated amortization
of $998,674 and $922,723 1,045,047 1,120,998
Prepaid expenses and other assets 201,359 199,999
------------ ------------
3,091,434 3,061,134
Total Assets $ 26,658,046 $ 27,511,241
============ ============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities applicable to investment in
real property
Mortgage payable $ 20,245,494 $ 20,711,814
Other liabilities
Accounts payable 86,544 105,449
Tenant security deposits 163,592 133,245
Accrued expenses and other liabilities 478,803 343,958
------------ ------------
Total Liabilities 20,974,433 21,294,466
Partners' Capital
Limited Partners 6,840,501 7,330,343
General Partners (1,156,888) (1,113,568)
------------ ------------
Total Partners' Capital 5,683,613 6,216,775
Total Liabilities and Partners' Capital $ 26,658,046 $ 27,511,241
</TABLE>
See notes to Financial Statements.
<PAGE>
STATEMENTS OF CASH FLOWS
<TABLE>
For the Nine Months Ended
September 30, 1995 and 1994 (Unaudited) 1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (433,202) $ (690,326)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 1,314,301 1,316,408
Changes in assets and liabilities:
Increase in tenant security deposits - funded (19,414) (62,404)
(Increase) decrease in accounts receivable and
other receivables (2,322) 22,240
Increase in escrow accounts (132,402) (42,279)
Increase in prepaid expenses and other assets (1,360) (14,354)
(Decrease) increase in accounts payable (18,905) 54,739
Increase (decrease) in tenant security deposits 30,347 (5,756)
Increase in accrued expenses and other liabilities 134,845 111,542
----------- -----------
Net cash provided by operating activities 871,888 689,810
Cash flows from investing activities:
Additions to buildings and improvements (354,855) (110,040)
Increase in reserve accounts 39,886 33,361
----------- ------------
Net cash used in investing activities (314,969) (76,679)
----------- ------------
Cash flows from financing activities:
Principal payments on mortgage note (466,320) (1,697,037)
Cash distributions paid to partners (99,960) (149,962)
------------ ------------
Net cash used in financing activities (566,280) (1,846,999)
------------ ------------
Net decrease in cash and cash equivalents (9,361) (1,233,868)
Cash and cash equivalents, beginning 923,214 2,394,552
------------ ------------
Cash and cash equivalents, end $ 913,853 $ 1,160,684
============ ============
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,431,257 $ 1,548,361
============ ============
</TABLE>
See notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
<TABLE>
Units of
For the Nine Months Ended Limited General Limited
September 30, 1995 and 1994 Partnership Partners' Partners' Total
(Unaudited) Interest Capital Capital Capital
<S> <C> <C> <C> <C>
Balance, December 31, 1994 23,139 $(1,113,568) $ 7,330,343 $ 6,216,775
Net loss - (43,320) (389,882) (433,202)
Distributions - - (99,960) (99,960)
---------- ------------- ---------- ----------
Balance, September 30, 1995 23,139 $(1,156,888) $ 6,840,501 $ 5,683,613
======== =========== =========== ===========
Balance, December 31, 1993 23,139 $(1,036,192) $ 8,226,672 $ 7,190,480
Net loss - (69,093) (621,293) (690,326)
Distributions - - (149,962) (149,962)
------------ -------------- ----------- -----------
Balance, September 30, 1994 23,139 $ (1,105,225) $ 7,455,417 $ 6,350,192
========= ============ =========== ===========
</TABLE>
See notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
1. ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed consolidated 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 consolidated 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 consolidated financial statements be read in conjunction
with the consolidated financial statements and notes thereto included in the
Registrant's latest annual report on Form 10-K.
The accompanying consolidated 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
The Managing General Partner determined it to be in the best interest of the
Partnership to retain cash available for distribution from July 1, 1987 to
December 31, 1990 in order to increase the Partnership's operating reserves. In
1991, Management began to distribute cash available for distribution. A
distribution of $49,980 will be paid in the quarter ended December 31, 1995
representing cash available for distribution from the third quarter.
3. TAXABLE INCOME
The Partnership's results of operations on a tax basis are expected to differ
from net income for financial reporting purposes primarily due to the accounting
differences in the recognition of depreciation and amortization.
<PAGE>
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For the three month periods ended
September 30, 1995 and 1994
The Partnership's operating results for the quarter ended September 30, 1995
improved relative to the same period in 1994. The Partnership's net loss for the
quarter declined from $234,513 in 1994 to $96,693 in 1995, a result of increased
income of $80,433 and decreased expenses of $57,387.
The Partnership's income increased by 4.9% from $1,625,309 to $1,705,742
primarily as the result of increased rental revenue. Rental revenue increased at
three of the Partnership's four properties. The revenue increases were achieved
by maintaining stable occupancy levels while increasing rental rates. Average
occupancy for the quarter ended September 30, 1995 was 92.5% compared to 91.4%
in the same period last year. Average rents at the properties increased by 3.5%
in 1995 compared to the similar period in 1994.
The Partnership's total operating expenses increased by .5% from $868,690 in
1994 compared to $872,682 in 1995. The Partnership's other expenses decreased by
$61,379 primarily due to decreased interest expense on lower debt balances
outstanding.
For the nine month periods ended
September 30, 1995 and 1994
The Partnership operated at a net loss of $433,202 for the nine months ended
September 30, 1995, compared to a net loss of $690,326 for the nine months ended
September 30, 1994. Excluding non-cash items such as depreciation and
amortization, however, the Partnership's properties have, in the aggregate,
generated cash flow, which the Partnership has used to make (i) improvements to
the properties, (ii) principal payments on the loans encumbering the properties
and (iii) cash distributions to limited partners.
The Partnership's income increased by 4.3% for the first nine months of 1995
compared to the first nine months of 1994, primarily as a result of a 4.6%
increase in rental income. On an aggregate basis, average rents at the
Partnership's four properties have increased by 4.6% over the first nine months
of 1994. While overall average occupancy declined slightly from 92% to 91%, the
Partnership was able to significantly reduce the level of tenant concessions,
especially at Stratford Place Apartments. Improved occupancy at Stratford Place
(from 92% to 97%) was offset by declines at Sunflower (from 92% to 89%) at
Meadow Wood (from 90% to 89%) and Stratford Village (from 93% to 88%).
The direct operating costs of the Partnership's properties increased by 4.1%,
primarily as a result of a one-time fee that was paid to a consultant for
reducing the 1994 through 1996 real estate tax liability of some of the
Partnership's properties. This payment is reflected in the Partnership's
"General & Administrative" expense. In addition, the Partnership's utility
expense increased by 2.4% and repairs and maintenance expense increased by 2.0%,
primarily as a result of additional carpet replacements in apartment units.
Interest expense declined as a result of the Partnership's significantly
reducing the principal balance of the Sunflower mortgage loan as part of a
restructuring of the loan during 1994.
<PAGE>
The Dallas (Sunflower) and Gaithersburg, Maryland (Stratford Place) markets are
currently stable. The submarket of Jacksonville, Florida (Meadow Wood) has
weakened somewhat as indicated by the property's lower occupancy for the 1995
third quarter. Competition in the Montgomery, Alabama, market (Stratford
Village) has increased dramatically with the addition of over 1,000 new
apartment units over the last year. The Partnership continues to make capital
improvements to the properties to enhance their competitiveness within their
local markets. The Partnership spent $354,885 on capital improvements during the
first nine months of 1995 compared to $110,040 in the nine months of 1994. At
two of the properties (Meadow Wood and Stratford Village), a portion of the
capital improvements is funded by replacement reserves held by the mortgage
lenders, with the balance being funded from operations. The balance of these
replacement reserves was $383,024 at September 30, 1995. Capital improvements
from the other two properties are funded entirely from operations.
The Partnership is currently pursuing a refinancing of the first mortgage loan
encumbering Stratford Place Apartments in Gaithersburg, Maryland, and it is
unclear whether the Partnership will be able to obtain a new loan large enough
to repay the existing loan in its entirety. In addition, the Partnership has
been using its reserves to make the increased debt service payments on the
Sunflower Apartments mortgage loan that are required by the restructuring of
that loan and repay the Suflower loan. The increased payments are serving to
significantly reduce the principal balance of that loan such that the loan will
be fully repaid by the end of 1996.
The results of operations in future quarters may differ from the results of
operations for the quarter ended September 30, 1995, due to inflation and
changing economic conditions which could affect occupancy levels, rental rates
and operating expenses.
<PAGE>
PART II - OTHER INFORMATION
NOT APPLICABLE
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 GROWTH INVESTORS 1
LIMITED PARTNERSHIP
(Registrant)
BY: TWO WINTHROP PROPERTIES, INC.
Managing General Partner
DATED: November 14, 1995 By: /s/ Richard J. McCready
Richard J. McCready
Chief Operating Officer
DATED: November 14, 1995 By: /s/ Anthony R. Page
Anthony R. Page
Chief Financial Officer
<PAGE>
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 loss $ (96,693)
Add: Amortization and depreciation charges to income not affecting
cash available for distribution 439,900
Net, loss from the Properties (160,329)
Cash added to reserves (132,878)
---------
Cash Available for Distribution $ 50,000
=========
</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 of
Compensation Compensation Amount
<S> <C> <C>
Winthrop Management Property Management Fee $82,151
</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
nine month period ending September 30, 1995 and is
qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000722565
<NAME> Winthrop Growth Investors I L.P.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1.00000
<CASH> 913,853
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,177,581
<PP&E> 41,588,807
<DEPRECIATION> 18,022,195
<TOTAL-ASSETS> 26,658,046
<CURRENT-LIABILITIES> 728,939
<BONDS> 20,245,494
<COMMON> 0
0
0
<OTHER-SE> 5,683,613
<TOTAL-LIABILITY-AND-EQUITY> 26,658,046
<SALES> 0
<TOTAL-REVENUES> 5,021,822
<CGS> 0
<TOTAL-COSTS> 3,930,394
<OTHER-EXPENSES> 93,373
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,431,257
<INCOME-PRETAX> (433,202)
<INCOME-TAX> 0
<INCOME-CONTINUING> (433,202)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (433,202)
<EPS-PRIMARY> 16.85
<EPS-DILUTED> 0.00
</TABLE>
