SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1996 Commission File Number 2-84760
WINTHROP GROWTH INVESTORS 1 LIMITED PARTNERSHIP
(Exact name of small business issuer as specified in its charter)
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
PART I - FINANCIAL INFORMATION
ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
For the Three Months Ended March 31,
(Unaudited) 1996 1995
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Income
Rental $ 1,568,584 $ 1,581,788
Interest on short-term investments 16,528 12,205
Other 69,443 67,041
----------- -----------
1,654,555 1,661,034
------------ -----------
Expenses
Leasing 41,951 57,868
General & administrative 84,198 89,334
Management fees 82,250 82,046
Utilities 173,404 161,231
Repairs and maintenance 266,352 299,698
Insurance 67,683 67,958
Taxes 165,048 134,002
--------- -----------
Total operating expenses 880,886 892,137
--------- -----------
Other expenses
Depreciation 392,737 409,180
Amortization 35,651 25,319
Interest expense 480,248 477,501
Other expenses 116,560 23,361
--------- -----------
Total expenses 1,906,082 1,827,498
---------- -----------
Net loss $ (251,527) $ (166,464)
=========== ===========
Net loss allocated:
General Partners $ (25,153) $ (16,646)
Limited Partners (226,374) (149,818)
----------- -----------
$ (251,527) $ (166,464)
============ ===========
Net loss per unit outstanding - L.P. $ (9.78) $ (6.47)
============ =============
</TABLE>
See notes to Consolidated Financial Statements.
<TABLE>
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
- --------------------------------------------------------------------------------------------------------------------
March 31, December 31,
1996 1995
- --------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Investment in Real Estate
Land $ 4,015,369 $ 4,015,369
Buildings and improvements 37,851,774 37,758,753
------------ ------------
41,867,143 41,774,122
Less accumulated depreciation 18,747,529 18,354,792
------------ ------------
23,119,614 23,419,330
------------ ------------
Cash and cash equivalents 1,417,469 907,734
Tenant security deposits - funded 150,675 137,735
Accounts receivable and other receivables 41,562 64,051
Escrow accounts 410,312 220,471
Reserve accounts 720,353 409,159
Deferred costs, net of accumulated amortization
of $1,061,649 and $1,025,998 1,178,704 1,017,720
Prepaid expenses and other assets 444,721 306,803
------------ ------------
4,363,796 3,063,673
----------- -----------
Total Assets $ 27,483,410 $ 26,483,003
============ ============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities applicable in investment in rental property
Mortgage payable $ 21,293,637 $ 20,081,080
Other liabilities
Accounts payable 70,885 102,478
Tenant security deposits 175,205 162,052
Accrued expenses and other liabilities 489,485 381,688
------------ ------------
Total Liabilities 22,029,212 20,727,298
---------- ----------
Partners' Capital
Limited Partners 6,624,032 6,900,386
General Partners (1,169,834) (1,144,681)
------------ ------------
Total Partners' Capital 5,454,198 5,755,705
------------ ------------
Total Liabilities and Partners' Capital $ 27,483,410 $ 26,483,003
============ ============
</TABLE>
See notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
------------------------------------------------------------------------------------------------------------------
For the Three Months Ended
March 31, 1996 and 1995 (Unaudited) 1996 1995
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (251,527) $ (166,464)
Adjustments to reconcile net loss to
net cash provided (used) by operating activities:
Depreciation and amortization 428,389 434,499
Changes in assets and liabilities:
Increase in tenant security deposits - funded (12,940) (73,421)
Decrease in accounts receivable and
other receivables 22,489 4,605
Increase in escrow accounts (189,841) (156,180)
(Increase) decrease in prepaid expenses and other assets (137,919) 52,343
(Decrease) increase in accounts payable (31,593) 3,132
Increase in tenant security deposits 13,153 10,317
Increase in accrued expenses and other liabilities 107,796 70,301
---------------------
Net cash provided (used) by operating activities (51,993) 179,132
Cash flows from investing activities:
Additions to buildings and improvements (93,021) (132,252)
Increase in reserve accounts (311,194) (26,290)
------------ -----------
Net cash used in investing activities (404,215) (158,542)
Cash flows from financing activities:
Principal payments on mortgage (1,487,443) (155,026)
Proceeds from new mortgage financing 2,700,000 -
Increase to deferred finance cost (196,634) -
Cash distributions paid to partners (49,980) (49,980)
------------ ------------
Net cash used in financing activities 965,943 (205,006)
------------ ------------
Net decrease in cash and cash equivalents 509,735 (184,416)
Cash and cash equivalents, beginning 907,734 923,214
---------- ------------
Cash and cash equivalents, end $ 1,417,469 $ 738,798
=========== ============
Supplemental disclosure of cash flow information:
Cash paid for interest $ 480,248 $ 477,501
========== ============
</TABLE>
See notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
-----------------------------------------------------------------------------------------------------------------------
Units of
For the Three Months Ended Limited General Limited
March 31, 1996 and 1995 Partnership Partners' Partners' Total
(Unaudited) Interest Capital Capital Capital
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, December 31, 1995 23,139 $(1,144,681) $ 6,900,386 $ 5,755,705
Net loss (25,153) (226,374) (251,527)
Partner distributions - (49,980) (49,980)
------------ -------------- ----------- -----------
Balance, March 31, 1996 23,139 $(1,169,834) $ 6,624,032 $ 5,454,198
========= =========== =========== ===========
Balance, December 31, 1994 23,139 (1,113,568) 7,330,343 6,216,775
Net loss (16,646) (149,818) (166,464)
Partner distributions - (49,980) (49,980)
---------- ------------- ---------- ----------
Balance, March 31, 1995 23,139 (1,130,214) 7,130,545 6,000,331
======== ========== ========== ==========
</TABLE>
See notes to Consolidated Financial Statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
1. GENERAL
The accompanying financial statements, footnotes and discussions should be read
in conjunction with the financial statements, related footnotes and discussions
contained in the Partnership's Annual Report for the year ended December 31,
1995.
The financial information contained herein is unaudited. In the opinion of
management, all adjustments necessary for a fair presentation of such financial
information have been included. All adjustments are of a normal recurring
nature. The balance sheet at December 31, 1995 was derived from audited
financial statements at such date.
The results of operations for the three months ended March 31, 1996 and 1995 are
not necessarily indicative of the results to be expected for the full year.
2. MORTGAGE PAYABLE
In January 1996, the loan encumbering the Partnership's Sunflower Apartments
property was refinanced. The new loan in the principal amount $2,700,000 bears
interest at 7.46% per annum, requires monthly principal and interest payments of
$18,085 and matures on February 11, 2026. The Partnership received net proceeds
of approximately $1,200,000 after paying off the former mortgage. Of the net
refinancing proceeds, $900,000 was used to pay off the second mortgage on the
Stratford Place Apartments, whose mortgage matures on May 1, 1996.
3. RELATED PARTY TRANSACTIONS
The total management fees paid to Winthrop Management, an affiliate of WFA, for
managing the Partnership's four properties for the quarter ended March 31, 1996
was $82,250. The property management fee for each property is calculated as 5.0%
of the property's gross collections for the quarter.
<PAGE>
Item 2 Management's Discussion and Analysis or Plan of Operation
---------------------------------------------------------
This Item should be read in conjunction with the financial statements and
other items contained elsewhere in the report.
Liquidity and Capital Resources
The Partnership receives rental income from its properties and is
responsible for operating expenses, administrative expenses, capital
improvements and debt service payment. The Partnership's properties are leased
to tenants pursuant to leases with original terms ranging from three to fourteen
months.
The level of liquidity based on cash and cash equivalents experienced a
$509,735 increase at March 31, 1996 as compared to December 31, 1995. The
increase is attributable to approximately $1,200,000 of art proceeds received by
the Partnership from the refinancing of its Sunflower Apartments property
(described below) which was only partially offset by cash distributions to
partners and cash used for capital improvements (investing activities). Also,
net refinancing proceeds of $900,000 were used to pay off the second mortgage on
Stratford Place Apartments.
On January 25, 1996, the loan encumbering the Partnership's Sunflower
Apartments property was refinanced. The new loan is in the principal amount of
$2,700,000, bears interest at 7.46% per annum and matures on February 11, 2026.
The fixed monthly rental payment of interest and principal of $18,805 is a
significant decrease from the $47,893 required under the previous loan.
Two of the markets in which the Partnership's properties are located,
Dallas, Texas (Sunflower) and Gaithersburg, Maryland (Stratford Place), are
currently stable. The submarket of Jacksonville, Florida (Meadow Wood) has
weakened somewhat and competition in the Montgomery, Alabama market (Stratford
Village) has increased with the addition of over 1,000 new apartment units to
the market in the last few years. The Partnership continues to make capital
improvements to the properties to enhance their competitiveness within their
markets. The Partnership spent approximately $93,000 on capital improvement
during the first quarter of 1996 which were funded from operating revenue and
replacement reserves held by the mortgage lenders.
The Partnership invests its working capital reserves in a money market
account or repurchase agreements secured by United States Treasury obligations.
The Managing General Partner believes that, if market conditions remain
relatively stable, cash flow from operations, when combined with working capital
reserves will be sufficient to fund required capital improvements and regular
debt service payments in the near future and maintain quarterly distribution
levels.
Results of Operations
Operating results before other expenses improved by $4,772 for the three
months ended March 31, 1996 as compared to the same period in 1995 due to a
decrease in operating expenses of $11,251 which was only partially offset by a
decrease in income of $6,479.
Income decreased by $6,479 for the three months ended March 31, 1996 as
compared to 1995 due to a decrease in rental income which was partially offset
by an increase in interest income and other income. The decrease in rental
income was due to a decrease in overall occupancy at the Partnership's
properties for the period ended March 31, 1996.
Operating expenses decreased by $11,251 for the three months ended March
31, 1996 as compared to 1995 primarily due to decreases in leasing, general and
administrative and repair and maintenance expenses which were partially offset
by increases in utility charges and taxes.
PART II - OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report.
b) Reports on Form 8-K: No report on Form 8-K was filed during the period.
<PAGE>
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
By: /s/ Michael L. Ashner
Michael L. Ashner
Chief Executive Officer
By: /s/ Edward V. Williams
Edward V. Williams
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from unaudited financial statements for the
three month period ending March 31, 1996 and is
qualified in its entirety by reference to such financial
statements
</LEGEND>
<CIK> 0000722565
<NAME> WINTHROP GROWTH INVESTROS 1 LIMITED PARTNERSHIP
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 1,417,469
<SECURITIES> 0
<RECEIVABLES> 41,562
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,459,031
<PP&E> 41,867,143
<DEPRECIATION> (18,747,529)
<TOTAL-ASSETS> 27,483,410
<CURRENT-LIABILITIES> 560,370
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 5,454,198
<TOTAL-LIABILITY-AND-EQUITY> 27,483,410
<SALES> 0
<TOTAL-REVENUES> 1,654,555
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,425,834
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 480,248
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (251,527)
<EPS-PRIMARY> (9.78)
<EPS-DILUTED> 00.00
</TABLE>
