<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20459
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to ________________
Commission File Number 0-20273
1999 Broadway Associates Limited Partnership
(Exact name of small business issuer as specified in its charter)
Delaware 04-6613783
-------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One International Place, Boston, MA 02110
--------------------------------------- -----------------------------------
(Address of principal executive office) (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
--- ----
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP-FORM 10-QSB JUNE 30, 1996
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PART 1 - FINANCIAL INFORMATION
------------------------------
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets (Unaudited)
June 30, December 31,
(In Thousands, Except Unit Data) 1996 1995
-------- ------------
Assets
Real estate, at cost:
Land $ 1,700 $ 1,700
Buildings and improvements, net of accumulated
depreciation and write down for permanent
impairment of $11,617 (1996) and $10,953 (1995) 27,797 28,450
------- --------
29,497 30,150
Other Assets:
Cash and cash equivalents 15,295 14,130
Deferred rent receivable 953 1,167
Other assets 433 256
Deferred costs, net of accumulated amortization
of $2,918 (1996) and $2,637 (1995) 1,491 1,749
-------- --------
Total assets $ 47,669 $ 47,452
======== ========
Liabilities and Partners' Capital
Liabilities:
Mortgage loan payable $ 30,135 $ 30,135
Accrued interest payable 2,147 716
Accounts payable and accrued expenses 1,479 1,284
Payable to related party 24 98
Security deposits 163 152
-------- --------
Total liabilities 33,948 32,385
======== ========
Partners' Capital (Deficit):
Investor limited partners' equity
(460 units outstanding) 15,126 16,459
General partners' deficit (1,405) (1,392)
-------- --------
Total Partners' Capital 13,721 15,067
-------- --------
Total Liabilities and Partners' Capital $ 47,669 $ 47,452
======== =========
See notes to consolidated financial statements.
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP-FORM 10-QSB JUNE 30, 1996
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Consolidated Statements of Operations (Unaudited) For the Six Months Ended
(In Thousands, Except Unit Data) June 30, 1996 June 30, 1995
------------- -------------
Revenues:
Rental $ 2,508 $ 3,881
Other 168 178
-------- ---------
Total Revenues 2,676 4,059
-------- ---------
Expenses:
Real estate taxes 323 255
Payroll and payroll expense reimbursements 309 313
Operating expenses 269 359
Repairs and maintenance 365 304
Utilities 349 404
Management and other fees 217 306
General and administrative costs 72 63
Insurance 62 58
Depreciation and amortization 945 885
-------- --------
Total Expenses 2,911 2,947
-------- --------
Operating (loss) income (235) 1,112
Non-operating income (expense):
Interest income 320 299
Interest expense (1,431) (1,438)
-------- ---------
Net (loss) $ (1,346) $ (27)
========= =========
Net (loss) allocated to Limited Partners per
Limited Partner Unit $(2,897.83) $ (58.70)
========== =========
See notes to consolidated financial statements.
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP-FORM 10-QSB JUNE 30, 1996
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Consolidated Statements of Operations (Unaudited) For the Three Months Ended
(In Thousands, Except Unit Data) June 30, 1996 June 30, 1995
------------- -------------
Revenues:
Rental $ 1,282 $ 1,832
Other 77 97
---------- ---------
Total Revenues 1,359 1,929
---------- ---------
Expenses:
Real estate taxes 162 129
Payroll and payroll expense reimbursements 139 159
Operating expenses 133 190
Repairs and maintenance 210 160
Utilities 176 190
Management and other fees 94 156
General and administrative costs 23 1
Insurance 30 23
Depreciation and amortization 473 442
---------- ---------
Total Expenses 1,440 1,450
---------- ---------
Operating (loss) income (81) 479
Non-operating income (expense):
Interest income 152 178
Interest expense (726) (718)
----------- ----------
Net (loss) $ (655) $ (61)
=========== ==========
Net (loss) allocated to Limited Partners per
Limited Partner Unit $(1,408.70) $ (130.43)
=========== ==========
See notes to consolidated financial statements.
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP-FORM 10-QSB JUNE 30, 1996
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Consolidated Statements of Partners' Capital (Unaudited)
(In Thousands)
Units of Investor
Limited General limited Total
Partnership partners' partners' partners'
Interest (deficit) equity capital
----------- --------- --------- ---------
Balance - January 1, 1996 460 $ (1,392) $ 16,459 $ 15,067
Net loss for the six months
ended June 30, 1996 - (13) (1,333) (1,346)
---- --------- --------- ---------
Balance - June 30, 1996 460 $ (1,405) $ 15,126 $ 13,721
==== ========= ======== ========
See notes to consolidated financial statements.
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP-FORM 10-QSB JUNE 30, 1996
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Consolidated Statements of Cash Flows (Unaudited)
(In Thousands) For the Six Months Ended
June 30, 1996 June 30, 1995
------------- -------------
Cash Flows from Operating Activities:
Net loss $ (1,346) $ (27)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 945 885
Deferred rent receivable 214 207
Changes in assets and liabilities
Other assets (177) -
Accounts payable, accrued expenses and
other liabilities 132 (468)
Accrued interest 1,431 -
Deferred costs (23) (656)
---------- ---------
Net cash provided by (used in) operating activities 1,176 (59)
--------- -----------
Cash Flows from Investing Activities:
Additions to buildings and improvements (11) (117)
--------- ---------
Cash used in investing activities (11) (117)
--------- -----------
Cash Flows from Financing Activities:
Principal payments on mortgage note - (125)
--------- -----------
Cash used in financing activities - (125)
--------- -----------
Net Increase (Decrease) in Cash and Cash Equivalents 1,165 (301)
Cash and cash equivalents, beginning of period 14,130 13,168
--------- -----------
Cash and cash equivalents, end of period $ 15,295 $ 12,867
========= ==========
Supplemental Disclosure of Cash Flow Information -
Cash paid for interest $ - $ 1,440
========= ==========
See notes to consolidated financial statements.
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB
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JUNE 30, 1996
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
1. General
The accompanying consolidated financial statements, footnotes
and discussions should be read in conjunction with the
consolidated 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.
Certain amounts have been reclassified to conform to the June
30, 1996 presentation. The balance sheet at December 31, 1995
was derived from audited financial statements at such date.
The results of operations for the six and three months ended
June 30, 1996 and 1995 are not necessarily indicative of the
results to be expected for the full year.
2. Related Party Transactions
The Partnership has incurred charges and made commitments to
companies affiliated by common ownership and management with
Winthrop Financial Associates (the "General Partner").
Related-party transactions with the General Partner and its
affiliates include the following:
a. 1999 Broadway Partnership (the "Operating
Partnership") pays or accrues to an affiliate of the
General Partner an annual property management fee
equal to 5% of cash receipts. For the period ended
June 30, 1996 management fees of $141,000 were
incurred.
b. The Partnership pays or accrues to the General
Partner an annual partnership administration and
investor service fees of $100,000, increased
annually by 6% (commencing in 1990). Fees of $75,000
were paid during the period ended June 30, 1996.
3. Accounting Change
On January 1, 1996, the Partnership adopted Statement of
Financial Accounting Standards ("SFAS") No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of ", which requires impairment losses
to be recognized for long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash
flows are not sufficient to recover the asset's carrying
amount. The impairment loss is measured by comparing the fair
value of the asset to its carrying amount. The adoption of the
SFAS had no effect on the Partnership's financial statements.
4. Petition of Relief Under Chapter 11
On November 15, 1995, the Operating Partnership filed a
petition for relief under Chapter 11 of federal bankruptcy
laws in the United States Bankruptcy Court. Under Chapter 11,
certain claims against the Operating Partnership, in existence
prior to the filing of the petition for relief under the
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB
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JUNE 30, 1996
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
4. Petition of Relief Under Chapter 11 (Continued)
federal bankruptcy laws, are stayed while the Operating
Partnership continues business operations as
Debtor-in-possession. These claims are reflected in the
following June 30, 1996 and December 31, 1995 consolidated
balance sheets as "Pre-Petition Liabilities". Claims secured
against the Operating Partnership assets also were stayed,
although the holders of such claims maintain the right to move
the court for relief from the stay. Secured claims are secured
primarily by liens on the Operating Partnership property. The
following balance sheets are presented as of June 30, 1996 and
December 31, 1995.
(In Thousands) June 30, December 31,
1996 1995
-------- ------------
Assets
Real Estate, net $ 29,497 $ 30,150
Other Assets 18,172 17,302
--------- ---------
Total Assets $ 47,669 $ 47,452
========= =========
Liabilities and Partners' Capital
Pre-Petition Liabilities:
Mortgage Note $ 30,135 $ 30,135
Other Liabilities 1,707 1,774
--------- ---------
Total Pre-Petition Liabilities 31,842 31,909
--------- ---------
Post-Petition Liabilities:
Other Liabilities 2,106 476
---------- ---------
Total Post-Petition Liabilities 2,106 476
--------- ---------
Partners' Capital (Deficit):
Limited Partners 15,126 16,459
General Partners (1,405) (1,392)
--------- ---------
Total Liabilities and Partners' Capital $ 47,669 $ 47,452
========= =========
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB
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JUNE 30, 1996
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
4. Petition of Relief Under Chapter 11 (Continued)
The Operating Partnership has filed its Plan of
Reorganization, and will seek to have such plan confirmed by
the Court. The plan, if confirmed, would provide a mechanism
through which the first mortgage loan would be restructured
and a means through which sufficient funds would be generated
to allow the Operating Partnership to lease up the Property,
provide sources of funding for required tenant improvements
and reposition the Property in the market place. In the
alternative, the Operating Partnership is exploring other
avenues, including additional financing, buying the present
first mortgage loan, or selling the Property. Although the
General Partner is optimistic that the current mortgage debt
may be restructured, or the Property may be sold, in the event
either alternative is not successful, the Property may be lost
through foreclosure. If the property is lost through
foreclosure the Partnership would not recognize a loss for
financial reporting purposes.
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB
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JUNE 30, 1996
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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 Registrant, through its 99.9% ownership interest in the
1999 Broadway Partnership (the "Operating Partnership"), owns
a 42-story office tower located in Denver, Colorado together
with a parking garage located one and one-half blocks
northeast of the office tower (collectively, the "Property").
The Operating Partnership generates rental revenue from the
Property and is responsible for the Property s operating
expense as well as its administrative costs.
The Registrant's original business plan was to selectively
contribute its reserves to the Operating Partnership to
enhance the Property's value (through leasing the Property).
The Registrant hoped that the Denver market would improve so
that the Property could generate cash flow distributions and
realize capital appreciation above the first mortgage loan.
The Denver market has not yet achieved the fundamental rebound
required for the Registrant to achieve its long term
investment objectives of generating cash flow distributions
and realizing capital appreciation.
The Registrant s level of liquidity based on cash and cash
equivalents increased by $1,165,000 during the six months
ended June 30, 1996 as compared to December 31, 1995. This
increase is attributable to $1,176,000 of cash from operating
activities which was primarily the result of non-payment of
debt service and was partially offset by $11,000 in capital
improvements (investing activities). The Registrant invests
its working capital reserves in a money market account.
In November 1995, the Operating Partnership did not make its
monthly mortgage payment on the debt encumbering the Property.
Thereafter, First Interstate, the lender holding the mortgage
encumbering the Property, through its subsidiary DAG
Management, Inc., obtained a court order on November 14, 1995
to appoint a receiver to collect the rents of the Property and
take control of the management of the Property. The receiver
never took possession of the Property. On November 15, 1995,
the Operating Partnership commenced a voluntary petition for
relief under Chapter 11 of the United States Bankruptcy Code.
This action was necessary to retain control of the Property
and its rents and income, and to maintain and preserve the
value of the Property to the Operating Partnership. Since the
bankruptcy petition, the Operating Partnership has continued
in possession of the property and is operating and managing
its business as a debtor-in-possession. The Operating
Partnership has filed its Plan of Reorganization and will seek
to have such plan confirmed by the court. The plan, if
confirmed, would provide a mechanism through which the first
mortgage loan would be restructured and a means through which
sufficient funds would be generated to allow the Operating
Partnership to lease up the Property, provide sources of
funding for required tenant improvements and reposition the
Property in the market place. In the alternative, the
Operating Partnership is exploring other avenues, including
additional financing, buying the present first mortgage loan,
or selling the Property. Although the General Partner is
optimistic that the current mortgage debt may be restructured,
or the Property may be sold, in the event either alternative
is not successful, the Property may be lost through
foreclosure. If the property is lost through foreclosure the
Partnership would not recognize a loss for financial reporting
purposes.
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB
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JUNE 30, 1996
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Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
--------------------------------------------------------------
Liquidity and Capital Resources (Continued)
-------------------------------------------
In light of the Chapter 11 Bankruptcy filing the General
Partner does not expect the Registrant to make any cash
distributions to the Limited Partners in the near future. The
General Partner believes it is in the best interest of the
Registrant to conserve any excess cash flow until its
evaluation of the benefits of the various alternatives
available to the Registrant is completed.
At this time, however, it appears that the original investment
objective of capital growth from the inception of the
Registrant will not be attained and that Limited Partners will
not receive a return of their invested capital. The extent to
which invested capital is refunded to Limited Partners is
dependent upon the performance of the Property and the market
in which it is located. The ability to hold and operate the
Property is dependent upon the Operating Partnership s ability
to restructure or refinance the first mortgage loan.
Results of Operations
---------------------
Operating results, before non-operating income (expenses),
declined by $1,347,000 for the six months and $560,000 for the
three months ended June 30, 1996, as compared to 1995. The
decline of $1,347,000 for the six months ended June 30, 1996
is due to decreases in revenues of $1,383,000 and expenses of
$36,000.
Revenues declined due to a decrease in rental income of
$1,373,000 and other income of $10,000. Rental revenues
declined due to a decrease in occupancy (from 85% in 1995 to
68% in 1996) as two major tenants vacated their space during
September/October of 1995. The Operating Partnership has been
notified by one tenant occupying 17,447 square feet of its
intent to vacate at the end of its lease term in the third
quarter of 1996. Other income remained relatively constant.
Expenses declined by $36,000 for the six months ended June 30,
1996, as compared to 1995, due to decreases in operating
expenses ($90,000), management and other fees ($89,000),
utilities ($55,000) and payroll ($4,000). These decreases were
partially offset by increases in real estate taxes ($68,000),
repairs and maintenance ($61,000), general and administrative
($9,000) and insurance ($4,000). The increase in non-cash
depreciation and amortization expense of $60,000 reflects the
higher average dollar amount of assets in service during the
first six months of 1996 as compared to the same period in
1995.
Interest income increased by $21,000 for the six months ended
June 30, 1996, as compared to 1995, due to an increase in average
working capital reserves available for investments.
Interest expense (which has been accrued but not paid since
the bankruptcy filing) remained relatively constant.
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB
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JUNE 30, 1996
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PART II - OTHER INFORMATION
---------------------------
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 three months
ended June 30, 1996.
12 of 13
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB
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JUNE 30, 1996
-------------
SIGNATURES
----------
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
--------------------------------------------
BY: WINTHROP FINANCIAL ASSOCIATES, A LIMITED PARTNERSHIP
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
DATED: August 13, 1996
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from 1999 Broadway
Associates Limited Partnership and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 15,295,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 41,114,000
<DEPRECIATION> (11,617,000)
<TOTAL-ASSETS> 47,669,000
<CURRENT-LIABILITIES> 0
<BONDS> 30,135,000
0
0
<COMMON> 0
<OTHER-SE> 13,721,000
<TOTAL-LIABILITY-AND-EQUITY> 47,669,000
<SALES> 0
<TOTAL-REVENUES> 2,676,000
<CGS> 0
<TOTAL-COSTS> 2,839,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,431,000
<INCOME-PRETAX> (1,346,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,346,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,346,000)
<EPS-PRIMARY> (2,897.83)
<EPS-DILUTED> (2,897.83)
</TABLE>
