<PAGE>
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 March 31, 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 |_|
1 of 11
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP-FORM 10-QSB MARCH 31, 1996
PART 1 - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
<TABLE>
<CAPTION>
Consolidated Balance Sheets (Unaudited)
March 31, December 31,
1996 1995
Assets
<S> <C> <C>
Real estate, at cost:
Land $1,700,000 $1,700,000
Buildings and improvements, net of accumulated
depreciation and write down for permanent impairment
of $11,285,000 (1996) and $10,953,000 (1995) 28,139,000 28,450,000
------------ ------------
29,839,000 30,150,000
Other Assets:
Cash and cash equivalents 14,588,000 14,130,000
Deferred rent receivable 1,060,000 1,167,000
Other assets 267,000 256,000
Deferred costs, net of accumulated amortization
of $2,777,000 (1996) and $2,637,000 (1995) 1,609,000 1,749,000
------------ ------------
Total assets $47,363,000 $47,452,000
============ ============
Liabilities and Partners' Capital
Liabilities:
Mortgage loan payable $30,135,000 $30,135,000
Accrued interest payable 1,421,000 716,000
Accounts payable and accrued expenses 1,245,000 1,284,000
Payable to related party 37,000 98,000
Security deposits 149,000 152,000
------------ ------------
Total liabilities 32,987,000 32,385,000
------------ ------------
Partners' Capital (Deficit):
Investor limited partners' equity (460 units outstanding) 15,775,000 16,459,000
General partners' deficit (1,399,000) (1,392,000)
------------ ------------
Total Partners' Capital 14,376,000 15,067,000
------------ ------------
Total Liabilities and Partners' Capital $47,363,000 $47,452,000
============ ============
</TABLE>
See notes to financial statements.
2 of 11
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP-FORM 10-QSB MARCH 31, 1996
Consolidated Statements of Income (Unaudited) For the Three Months Ended
March 31, March 31,
1996 1995
Revenues:
Rental $ 1,226,000 $ 2,049,000
Other 91,000 81,000
----------- -----------
Total Revenues 1,317,000 2,130,000
----------- -----------
Expenses:
Real estate taxes 161,000 126,000
Payroll and payroll expense reimbursements 170,000 154,000
Operating expenses 136,000 169,000
Repairs and maintenance 155,000 144,000
Utilities 173,000 214,000
Management and other fees 123,000 150,000
General and administrative costs 46,000 46,000
Advertising 3,000 16,000
Insurance 32,000 35,000
Depreciation and amortization 472,000 443,000
----------- -----------
Total Expenses 1,471,000 1,497,000
----------- -----------
Operating (loss) income (154,000) 633,000
Non-operating income (expenses):
Interest income 168,000 121,000
Interest expense (705,000) (720,000)
----------- -----------
Net (loss) income $ (691,000) $ 34,000
=========== ===========
Net (loss) income allocated to Limited Partners per
Limited Partner Unit $ (1,486.96) $ 71.74
=========== ===========
See notes to financial statements.
3 of 11
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP-FORM 10-QSB MARCH 31, 1996
Consolidated Statements of Partners' Capital (Unaudited)
<TABLE>
<CAPTION>
Units of Investor
Limited General limited Total
Partnership partners' partners' partners'
Interest (deficit) equity capital
<S> <C> <C> <C> <C>
Balance - January 1, 1996 460 $ (1,392,000) $ 16,459,000 $ 15,067,000
Net loss -- (7,000) (684,000) (691,000)
------------ ------------ ------------ ------------
Balance - March 31, 1996 460 $ (1,399,000) $ 15,775,000 $ 14,376,000
============ ============ ============ ============
</TABLE>
See notes to financial statements.
4 of 11
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP-FORM 10-QSB MARCH 31, 1996
Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31, March 31,
1996 1995
<S> <C> <C>
Cash Flows from Operating Activities:
Net (loss) income $ (691,000) $ 34,000
Adjustments to reconcile net (loss) income to net cash
provided by (used in) operating activities:
Depreciation and amortization 472,000 443,000
Deferred rent receivable 107,000 178,000
Changes in assets and liabilities
Other assets (11,000) 44,000
Accounts payable, accrued expenses and other liabilities (103,000) (161,000)
Accrued interest 705,000 --
Deferred costs -- (602,000)
------------ ------------
Net cash provided by (used in) operating activities 479,000 (64,000)
------------ ------------
Cash Flows from Investing Activities:
Additions to buildings and improvements (21,000) (12,000)
------------ ------------
Cash used in investing activities (21,000) (12,000)
------------ ------------
Cash Flows from Financing Activities:
Principal payments on mortgage note -- (62,000)
------------ ------------
Cash used in financing activities -- (62,000)
------------ ------------
Net Increase (decrease) in Cash and Cash Equivalents 458,000 (138,000)
Cash and cash equivalents, beginning of period 14,130,000 13,168,000
------------ ------------
Cash and cash equivalents, end of period $ 14,588,000 $ 13,030,000
============ ============
Supplemental Disclosure of Cash Flow Information -
Cash paid for interest $ -- $ 720,000
============ ============
</TABLE>
See notes to financial statements.
5 of 11
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB
MARCH 31, 1996
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
March 31, 1996 presentation. 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. Related Party Transactions
The Partnership has incurred charges and made commitments to companies
affiliated by common ownership and management with the general partner.
Related-party transactions with WFA and its affiliates include the
following:
a. The Operating Partnership pays or accrues to an affiliate of WFA an
annual property management fee equal to 5% of cash receipts. For the
period ended March 31, 1996, management fees of $73,000 were earned.
b. The Investor Partnership pays or accrues to WFA annual partnership
administration and investor service fees of $100,000, increased
annually by 6% (commencing in 1990). Fees of $50,000 were paid
during the period ended March 31, 1996.
3. Petition of Relief Under Chapter 11
On November 15, 1995, the 1999 Broadway Joint Venture (the "Debtor") 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 Debtor, in existence prior to the filing of the petition for relief
under the federal bankruptcy laws, are stayed while the Debtor continues
business operations as Debtor-in-possession. These claims are reflected in
the following March 31, 1996 and December 31, 1995 consolidated balance
sheets as "Pre-Petition Liabilities". Claims secured against the Debtor's
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 Debtor's property. The following balance
sheets are presented as of March 31, 1996 and December 31, 1995.
6 of 11
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB
MARCH 31, 1996
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Petition of Relief Under Chapter 11 (Continued)
March 31, December 31,
1996 1995
------------ ------------
Assets
Real Estate, net $ 29,839,000 $ 30,150,000
Other Assets 17,524,000 17,302,000
------------ ------------
Total Assets $ 47,363,000 $ 47,452,000
============ ============
Liabilities and Partners' Capital
Pre-Petition Liabilities:
Mortgage Note $ 30,135,000 $ 30,135,000
Other Liabilities 2,044,000 1,774,000
------------ ------------
Total Pre-Petition Liabilities 32,179,000 31,909,000
------------ ------------
Post-Petition Liabilities:
Other Liabilities 808,000 476,000
------------ ------------
Total Post-Petition Liabilities 808,000 476,000
------------ ------------
Partners' Capital (Deficit):
Limited Partners 15,775,000 16,459,000
General Partners (1,399,000) (1,392,000)
------------ ------------
Total Liabilities and Partners' Capital $ 47,363,000 $ 47,452,000
============ ============
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.
7 of 11
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB
MARCH 31, 1996
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 Registrant 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.
Taking into account the slight decreases in operating expenses and leasing
costs since 1988, the net effective rent for the Property has actually
decreased since 1988.
The Registrant's level of liquidity based on cash and cash equivalents
increased by $458,000 during the three months ended March 31, 1996 as
compared to December 31, 1995. This increase is attributable to $479,000
of cash from operating activities which was partially offset by $21,000 in
capital improvements (investing activities). The Registrant invests its
working capital reserves in a money market account or repurchase
agreements secured by United States Treasury obligations.
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 Registrant 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.
8 of 11
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB
MARCH 31, 1996
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Liquidity and Capital Resources (Continued)
The General Partner does not expect the Registrant to make any cash
distributions to the Limited Partners in the immediate future. In light of
market conditions as discussed herein and the Chapter 11 bankruptcy, the
General Partner expects that there will be minimal, if any, excess cash
flow from operations after payment of debt service. 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
$787,000 for the three months ended March 31, 1996, as compared to 1995,
due to decreases in revenues of $813,000 and expenses of $26,000.
Revenues decreased by $813,000 for the three months ended March 31, 1996,
as compared to 1995, due to a decrease in rental income of $823,000, which
was slightly offset by an increase in other income of $10,000.
Rental revenues decreased by $823,000 due to a decrease in occupancy from
85% in 1995 to 68% in 1996. The occupancy decrease is due to the space
vacated by two major tenants during the fourth quarter 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 decreased by $26,000 as savings were recognized in utilities
($41,000), management fees ($27,000), advertising ($13,000) and operating
expenses (33,000). These savings were partially offset by increases in
real estate taxes ($35,000), payroll ($16,000), and repairs and
maintenance ($11,000). The increase in non-cash depreciation and
amortization expense of $29,000 reflects the higher average dollar amount
of assets in service in first quarter of 1996 compared to the same period
in 1995. All other expenses remained relatively constant.
Interest income increased by $47,000 for the three months ended March 31,
1996, as compared to 1995, as a result of improved returns on the U.S.
Government agencies investments made by the Partnership.
Interest expense (which was accrued but not paid) remained relatively
constant for the quarter ended March 31, 1996, as compared to 1995.
9 of 11
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB
MARCH 31, 1996
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 8K:
No report on Form 8-K was filed during the period.
10 of 11
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB
MARCH 31, 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: __________________________________
DATED: May 15, 1996 /s/ Michael L. Ashner
Chief Executive Officer
BY: __________________________________
DATED: May 15, 199 /s/ Edward V. Williams
Chief Financial Officer
11 of 11
<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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 14,588,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 41,124,000
<DEPRECIATION> (11,285,000)
<TOTAL-ASSETS> 47,363,000
<CURRENT-LIABILITIES> 0
<BONDS> 30,135,000
0
0
<COMMON> 0
<OTHER-SE> 14,376,000
<TOTAL-LIABILITY-AND-EQUITY> 47,363,000
<SALES> 0
<TOTAL-REVENUES> 1,317,000
<CGS> 0
<TOTAL-COSTS> 1,425,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 705,000
<INCOME-PRETAX> (691,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (691,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (691,000)
<EPS-PRIMARY> (1,486.96)
<EPS-DILUTED> (1,486.96)
</TABLE>
