<PAGE>
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 September 30, 1998 Commission File Number 0-13441
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
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(Exact name of small business issuer as specified in its charter)
Illinois 04-2807084
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Five Cambridge Center, Cambridge, MA 02142
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 234-3000
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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 ___
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(UNAUDITED) (NOTE 1)
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<TABLE>
<CAPTION>
Three Months Ended, Nine Months Ended,
September 30, September 30,
1998 1997 1998 1997
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<S> <C> <C> <C> <C>
EXPENSES:
Administrative................................ $ 631 $ 485 $ 1,983 $ 1,809
Management fees............................... 62,500 62,500 187,500 187,500
Professional fees............................. 10,146 2,202 41,394 49,678
--------- --------- ------------ ------------
TOTAL EXPENSES.................................. 73,277 65,187 230,877 238,987
--------- --------- ------------ ------------
NET LOSS........................................ $ (73,277) $ (65,187) $ (230,877) $ (238,987)
========== ========== =========== ===========
Net Loss allocated to General
Partners...................................... $ (1,466) $ (1,304) $ (4,618) $ (4,780)
========== ========== =========== ===========
Net Loss allocated to Special
Limited Partners............................. $ (7) $ (7) $ (23) $ (24)
========== ========== =========== ===========
Net Loss allocated to Limited
Partners...................................... $ (71,804) $ (63,876) $ (226,236) $ (234,183)
========== ========== =========== ===========
Net Loss per Unit of Investor
Limited Partnership Interest.................. $ (130.55) $ (116.14) $ (411.34) $ (425.79)
========== ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
2
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
STATEMENTS OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL
(UNAUDITED) (NOTE 1)
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<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
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<S> <C> <C>
ASSETS:
Cash................................................. $ 11 $ 19
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TOTAL ASSETS..................................... $ 11 $ 19
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LIABILITIES:
Notes and fees payable
- related parties.................................. $ 3,052,960 $ 2,822,091
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TOTAL LIABILITIES................................. 3,052,960 2,822,091
PARTNERS' CAPITAL (DEFICIT):
Limited Partners, 550 units
authorized and outstanding.......................... 1,310,396 1,536,632
Special Limited Partner.............................. (7,923) (7,900)
General Partners..................................... (4,355,422) (4,350,804)
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TOTAL PARTNERS' DEFICIT........................... (3,052,949) (2,822,072)
----------- -----------
TOTAL LIABILITIES AND
PARTNERS DEFICIT............................... $ 11 $ 19
=========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
3
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
(UNAUDITED) (NOTE 1)
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<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
1998 1997
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<S> <C> <C>
Cash flows from operating activities:
Net loss ............................................... $(230,877) $(238,987)
Adjustments to reconcile net loss to net cash used by operating
activities:
Increase in related party notes
and fees payable..................................... 230,869 238,987
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Net cash used by operating activities................... (8) 0
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Net decrease in cash ................................... (8) 0
Cash, beginning of period............................... 19 18
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Cash, end of period..................................... $ 11 $ 18
========== ==========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
4
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED) (NOTE 1)
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<TABLE>
<CAPTION>
Investor Special
Limited Limited General
Partners Partner Partners Total
-------- ------- -------- -----
<S> <C> <C> <C> <C>
Balance, December 31, 1997 $1,536,632 $ (7,900) $(4,350,804) $(2,822,072)
Net loss (226,236) (23) (4,618) (230,877)
----------- ------------ ---------------- --------------
Balance, September 30, 1998 $1,310,396 $ (7,923) $(4,355,422) $(3,052,949)
========== ========= ============ ============
Balance, December 31, 1996 $1,856,569 $(7,867) $(4,344,274) $(2,495,572)
Net loss (234,183) (24) (4,780) (238,987)
------------ ----------- ---------------- --------------
Balance, September 30, 1997 $1,622,386 $(7,891) $(4,349,054) $(2,734,559)
========== ======== ============ ============
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
5
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)
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1. ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein have been prepared
by the Partnership, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. The
Partnership's accounting and financial reporting policies are in
conformity with generally accepted accounting principles and include
all adjustments in interim periods considered necessary for a fair
presentation of the results of operations. The balance sheet at
December 31, 1997 was derived from audited financial statements at such
date. 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 Partnership's annual report on Form
10-KSB as of and for the year ended December 31, 1997.
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, 1998.
2. TAXABLE LOSS
The Partnership's taxable loss for 1998 is expected to differ from that
for financial reporting purposes primarily due to accounting
differences in the recognition of depreciation incurred by the
Operating Partnership and differences in the recognition of expenses
accrued and payable to related parties not deductible until the year of
payment for tax purposes.
3. INVESTMENT IN OPERATING PARTNERSHIP
The Partnership accounts for its investment in Financial Place 1994
Limited Partnership ("New LP") and OFP Corporation ("Newco"), who are
the sole partners of One Financial Place Partnership (the "Operating
Partnership"), using the equity method of accounting. Under the equity
method of accounting, the initial investment is recorded at cost,
increased or decreased by the Partnership's share of income or losses,
and decreased by distributions. Equity in the loss of the Operating
Partnership is no longer recognized once the investment balance reaches
zero.
The loss from the Operating Partnership, not recognized since the
investment balance reached zero, will be offset against the
Partnership's share of future income, if any, from the Operating
Partnership.
6
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)
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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's primary source of liquidity is distributions from New
LP and Newco. New LP and Newco are the sole partners of the Operating
Partnership. The Operating Partnership owns and operates a 39 story
office building and a three-story trading annex located in Chicago,
Illinois. The Partnership has not received any distributions for the
past five years, and based on the current commercial real estate market
in Chicago and the current status with the mortgage lenders, none are
expected in the foreseeable future.
The Partnership requires cash to pay operating expenses associated with
reporting to its Limited Partners, including audit, printing and
mailing costs. Although there is no requirement to do so, Winthrop
Financial Co., Inc. ("Winthrop"), a general partner of the Partnership,
has made loans to the Partnership since 1991 to cover the cost of these
operating expenses. There can be no assurance, however, that Winthrop
will continue to fund the Partnership's operating deficits. To date,
Winthrop has advanced $365,460 to the Partnership, of which $10,776 was
advanced during the third quarter of 1998. These loans are non-interest
bearing and are to be repaid out of cash distributions, if any, which
the Partnership receives from Newco or New LP. The loans are to be
repaid prior to the Partnership making any cash distributions to its
Limited Partners. In addition, an investor service fee payable to an
affiliate of a general partner of $250,000 per year continued to accrue
during the period ending September 30, 1998. At September 30, 1998, the
amount of fees payable was $2,687,500. Accordingly, it is highly
unlikely that Limited Partners will receive additional distributions
from the Partnership.
The Partnership is dependent upon the management agents of the
Operating Partnership for management and administrative services. The
management agents of the Operating Partnership are at various stages of
completing an assessment of their computer systems. These Year 2000
costs, if any, are the responsibility of the individual management
agents. The Partnership does not expect that it will incur any material
costs associated with, or be materially affected by, the Year 2000
Issue.
Results of Operations
Revenues and expenses remained relatively constant for the nine months
ended September 30, 1998 as compared to 1997.
7
<PAGE>
ONE FINANCIAL PLACE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)
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Pending Foreclosure
After extensive negotiations, in 1995 a Plan of Reorganization for the
Operating Partnership (the "Plan") became effective. Pursuant to the
Plan, Travelers, the property's first mortgage lender, agreed to (i)
defer collection of an aggregate amount of approximately $16,800,000,
(ii) reduce current debt service by an aggregate amount of
approximately $16,800,000 thereafter, (iii) extend the maturity date of
the Travelers debt by three years to October 1, 1998 with reduced
current debt service through such date and (iv) not require the
Operating Partnership to contribute any additional funds. In exchange
for these concessions, the Operating Partnership agreed to give
Travelers greater control over the property and its operations. In
addition, Travelers required that the Operating Partnership place in
escrow a deed conveying the Property to Travelers in the event of
default. As a protection against any possible interference with
operation of this escrow, Travelers required that Winthrop, the
Development partners and certain of their affiliates agree, through
"Guaranties," not to take any action and not to permit the Operating
Partnership and OFP to take any action to prevent Travelers from taking
ownership of the property if there is such a default.
In addition to the Travelers debt, which has a total original principal
balance of $173,700,000 and a balance at September 30, 1998 of
$222,200,000, One Financial Place is encumbered by a loan payable to
the City of Chicago ("UDAG Loan") with an outstanding balance at
September 30, 1998 of $6,700,000 and a line of credit from The Northern
Trust Company with an outstanding balance at September 30, 1998 of
$2,400,000.
On October 1, 1998 the Operating Partnership defaulted on all of its
debt. Travelers has opted not to record the deeds immediately but has
instead elected to take the property through the foreclosure process.
As a result, it is expected that the property will be held through
January 1999, thereby deferring the partners' tax liability for one
year. A 1999 disposition of the property will trigger taxable income of
approximately $250,000 per limited partner unit.
8
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
PART II - OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27. Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the nine months ended
September 30, 1998.
9
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ONE FINANCIAL PLACE LIMITED PARTNERSHIP
SIGNATURES
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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.
ONE FINANCIAL PLACE LIMITED PARTNERSHIP
(Partnership)
By: Winthrop Financial Co., Inc.
a General Partner
By: /s/ Edward V. Williams
----------------------
Edward V. Williams
Chief Financial Officer
By: /s/ Michael L. Ashner
----------------------
Michael L. Ashner
Chief Executive Officer
DATED: November 13, 1998
<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, 1998 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 11
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 11
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> (3,052,949)
<TOTAL-LIABILITY-AND-EQUITY> 11
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 228,894
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (230,877)
<INCOME-TAX> 0
<INCOME-CONTINUING> (230,877)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (230,877)
<EPS-PRIMARY> (411.34)
<EPS-DILUTED> (411.34)
</TABLE>
