<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 March 31, 1997
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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
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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
----- -----
1 of 11
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1997
PART 1 - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
<TABLE>
<CAPTION>
Consolidated Balance Sheets (Unaudited)
(In Thousands, Except Unit Data) March 31, December 31,
1997 1996
--------- ------------
<S> <C> <C>
Assets
Real estate, at cost:
Land $ 1,700 $ 1,700
Buildings and improvements, net of accumulated
depreciation of $12,553 (1997) and $12,204 (1996) 27,562 27,442
------- -------
29,262 29,142
Other Assets:
Cash and cash equivalents 5,429 8,580
Restricted cash 791 1,000
Receivables and other assets 697 290
Deferred rent receivable 581 665
Deferred costs, net of accumulated amortization
of $3,358 (1997) and $3,248 (1996) 1,109 1,153
------- -------
Total assets $37,869 $40,830
======= =======
Liabilities and Partners' Capital
Liabilities:
Mortgage loan payable $26,130 $28,135
Accrued interest payable 223 252
Accounts payable and accrued expenses 914 1,072
Payable to related party 67 22
Security deposits 153 140
------- -------
Total liabilities 27,487 29,621
------- -------
Commitments
Partners' Capital:
Investor limited partners' equity (460 units outstanding) 11,821 12,640
General partners' deficit (1,439) (1,431)
------- -------
Total Partners' Capital 10,382 11,209
------- -------
Total Liabilities and Partners' Capital $37,869 $40,830
======= =======
</TABLE>
See notes to consolidated financial statements.
2 of 11
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1997
<TABLE>
<CAPTION>
Consolidated Statements of Operations (Unaudited) For the Three Months Ended
March 31, March 31,
(In Thousands, Except Unit Data) 1997 1996
--------- ---------
<S> <C> <C>
Revenues:
Rental $ 1,191 $ 1,226
Other 113 91
---------- ----------
Total Revenues 1,304 1,317
---------- ----------
Expenses:
Real estate taxes 161 161
Payroll and payroll expense reimbursements 171 170
Operating expenses 115 136
Repairs and maintenance 176 155
Utilities 179 173
Management and other fees 139 123
General and administrative costs 83 49
Insurance 24 32
Depreciation and amortization 459 472
---------- ----------
Total Expenses 1,507 1,471
---------- ----------
Operating loss (203) (154)
Non-operating income (expense):
Interest income 99 168
Interest expense (669) (705)
Reorganization item - professional fees (54) -
---------- ----------
Net loss $ (827) $ (691)
========== ==========
Net loss allocated:
General Partners $ (8) $ (7)
Investor Limited Partners (819) (684)
---------- ----------
$ (827) $ (691)
========== ==========
Net loss allocated to Limited Partners per
Limited Partner Unit $(1,780.43) $(1,486.96)
========== ==========
</TABLE>
See notes to consolidated financial statements.
3 of 11
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1997
Consolidated Statement of Partners' Capital (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
Units of Investor
Limited General Limited Total
Partnership Partners' Partners' Partners'
Interest Deficit Capital Capital
------------------ ------------------- -------------------- --------------------
<S> <C> <C> <C> <C>
Balance - January 1, 1997 460 $(1,431) $12,640 $11,209
Net loss - (8) (819) (827)
----- -------- ------- -------
Balance - March 31, 1997 460 $(1,439) $11,821 $10,382
===== ======= ======= =======
</TABLE>
See notes to consolidated financial statements.
4 of 11
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1997
Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31, March 31,
1997 1996
--------- ---------
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (827) $ (691)
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities:
Depreciation 349 332
Amortization 110 140
Deferred rent receivable 84 107
Changes in assets and liabilities:
Receivables and other assets (407) (11)
Deferred costs (66) -
Accrued interest payable (29) 705
Accounts payable, accrued expenses, payable
to related party and security deposits (100) (103)
------ -------
Net cash (used in) provided by operating activities (886) 479
------ -------
Cash Flows from Investing Activities:
Additions to buildings and improvements (469) (21)
Restricted cash 209 -
------ -------
Net cash used in investing activities (260) (21)
------ -------
Cash Flows from Financing Activities:
Principal payments on mortgage note (2,005) -
------ -------
Cash used in financing activities (2,005) -
------ -------
Net (Decrease) Increase in Cash and Cash Equivalents (3,151) 458
Cash and cash equivalents, beginning of period 8,580 14,130
------ -------
Cash and cash equivalents, end of period $5,429 $14,588
====== =======
Supplemental Disclosure of Cash Flow Information:
Cash Paid For Interest $ 698 $ -
====== =======
</TABLE>
See notes to consolidated financial statements.
5 of 11
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1997
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
The accompanying financial statements reflect the accounts of 1999
Broadway Associates Limited Partnership (the "Investor Partnership") and
1999 Broadway Partnership (the "Operating Partnership"). The Investor
Partnership and the Operating Partnership are collectively referred to
as the "Partnerships". These 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, 1996.
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, 1997 presentation. The balance sheet at
December 31, 1996 was derived from audited financial statements at such
date.
The results of operations for the three months ended March 31, 1997 and
1996 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. The Operating Partnership accrues to an affiliate of the
General Partner an annual property management fee equal to the
greater of 5% of cash receipts or $397,560. For the period
ended March 31, 1997, management fees of $99,000 were
incurred. In accordance with the Plan of Reorganization (see
Note 3), commencing on the Plan's effective date, property
management fee payments were reduced to 4% of cash receipts as
long as the New Note is outstanding. Management fees of
$55,000 were paid during the period ended March 31, 1997.
b. The Partnership pays or accrues to the General Partner an
annual partnership administration and investor service fee of
$100,000, which, since 1990, has been increased annually by 6%
to its present level of $160,000 per annum. Fees of $40,000
were paid during the period ended March 31, 1997.
3. Petition of Relief Under Chapter 11 and Modification of Mortgage Loan
Payable
The Partnership and the holder of the mortgage on the Property (the
"Lender") reached an agreement pursuant to which the Lender voted in
favor of the Plan of Reorganization (the "Plan") submitted by the
Operating Partnership, which was confirmed by the Bankruptcy Court on
November 13, 1996. The Plan became effective on February 28, 1997
("Effective Date") and provides for the modification of the existing
loan as follows: (i) the maturity date has been extended one year to
September 1999,
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1997
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Petition of Relief Under Chapter 11 and Modification of Mortgage Loan
Payable (Continued)
(ii) principal payments are based on a 25 year amortization schedule,
(iii) additional principal payments of $2,000,000 were paid on the
Initial Consummation Date (as defined below) and on the Plan's Effective
Date, (iv) monthly interest only payments from the Initial Consummation
Date to the Effective Date and (v) the modification of the existing
mortgage as of the Effective Date to incorporate the above modifications
("New Note"). The loan continues to bear interest at 9.5% per annum.
On November 26, 1996 (the "Initial Consummation Date" of the Plan) the
Partnership paid $7,147,000 to the lender. The initial consummation
payment consisted of a $2,000,000 principal payment, $3,300,000 of
accrued interest from October 1, 1995 to November 26, 1996, a $1,000,000
payment to a reserve fund for potential debt service shortfalls and to
provide funds to lease up the property, and approximately $847,000 for
pre-petition liabilities, other claims of the Lender and costs
associated with the reorganization. This payment represents the
satisfaction of the pre-petition liabilities at face value, and,
accordingly, no gain or loss was recognized. In addition, the following
covenants have been incorporated in the New Note: (i) property
management fee payments have been reduced to 4% of cash receipts as long
as the New Note is outstanding, (ii) no distributions to partners by
either the Investor or Operating Partnership is permitted while the New
Note is outstanding. Although a distribution from the Investor
Partnership would constitute a default under the New Note, the lender
has no lien or other interest in cash that may be distributed by the
Investor Partnership, (iii) all tenant improvements shall be funded by
the Investor Partnership and, (iv) minimum tangible net worth
requirements of the partners of the Operating Partnership.
The Operating Partnership did not have sufficient cash flows to meet its
February 1997 debt service requirement due on the outstanding mortgage.
Accordingly, the February 1997 interest only payment of $223,000 was
funded entirely from the reserve fund establish at the Initial
Consummation Date.
7 of 11
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1997
Item 2. Management's Discussion and Analysis or Plan of Operation
This Item should be read in conjunction with the consolidated 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
decreased by $3,151,000 during the three months ended March 31, 1997 as
compared to December 31, 1996. The decline is attributable to $886,000
of cash used in operating activities, $260,000 of cash used in investing
activities and $2,005,000, of cash used in financing activities. Cash
from operations declined due to a decrease in occupancy from 1996 to
1997. Cash used in investing activities consisted of $469,000 of cash
used for improvements to real estate offset by a decline of $209,000 in
restricted cash. Cash used in financing activities consisted of a
$2,000,000 principal payment on the Plan's Effective Date and mortgage
principal amortization. During the bankruptcy petition period, the
Registrant's leasing activity was restricted by the bankruptcy court.
The Registrant is currently attempting to lease-up the unoccupied space.
The Registrant has budgeted to expend all of its working capital
reserves for tenant improvements and leasing commissions during the next
twelve months, with the funding provided by the Investor Partnership.
The Registrant invests its working capital reserves in a money market
account.
The Registrant and the holder of the first mortgage on the Property
reached an agreement pursuant to which the Lender voted in favor of the
Plan of Reorganization submitted by the Operating Partnership, which was
confirmed by the Bankruptcy Court on November 13, 1996. The Plan, as
approved by the Bankruptcy Court, provides for the modification of the
existing loan encumbering the property as follows: (i) the maturity date
has been extended one year to September 1999; and (ii) principal
payments are based on a 25 year amortization schedule (instead of 30
years), with a balloon payment being due at maturity. The loan continues
to bear interest at 9.5% per annum.
On November 26, 1996 (the "Initial Consummation Date" of the Plan) the
Partnership paid $7,147,000 to the lender. The initial consummation
payment consisted of a $2,000,000 principal payment, $3,300,000 of
accrued interest from October 1, 1995 to November 26, 1996, a $1,000,000
payment
8 of 11
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1997
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
Liquidity and Capital Resources (Continued)
to a reserve fund for potential debt service shortfalls and to provide
funds to lease up the property, and approximately $847,000 for
pre-petition liabilities, other claims of the Lender and costs
associated with the reorganization. This payment represents the
satisfaction of the pre-petition liabilities at face value, and,
accordingly, no gain or loss was recognized.
At this time, 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. Subsequent to September 1999, the ability
to hold and operate the Property is dependent upon the Operating
Partnership's ability to restructure or refinance the first mortgage
loan or sell the property.
Results of Operations
Operating results, before non-operating income (expenses), declined by
$49,000 for the three months ended March 31, 1997, as compared to 1996,
due to an increase in expenses of $36,000 and a decline in revenue of
$13,000.
Revenues declined due to a decrease in rental income of $35,000 offset
by an increase in other income of $22,000. Rental revenues declined due
to a decrease in occupancy from 68% in 1996 to 63% in 1997.
Expenses increased by $36,000 for the three months ended March 31, 1997,
as compared to 1996, due to increases in general and administrative
costs ($34,000) and repairs and maintenance ($21,000), which were
partially offset by a decrease in depreciation and amortization
($13,000). The increase in general and administrative expenses relates
primarily to advertising expenditures, which had previously been
restricted by the bankruptcy court. Amortization expense declined due to
intangible assets becoming fully amortized during 1996.
Interest income decreased by $69,000 for the three months ended March
31, 1997, as compared to 1996, due to a decline in average working
capital reserves available for investment. This decline relates to the
various payments made by the Partnership on the Initial Consummation
Date and Effective Date of the Plan of Reorganization.
Interest expense decreased by $36,000 due to the payment of $4,000,000
in mortgage principal as part of the Plan of Reorganization.
9 of 11
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1997
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27. Financial Data Schedule, is filed as an Exhibit to this report.
(b) Reports on Form 8-K:
No report of Form 8-K was filed during the period.
10 of 11
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1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1997
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: May __, 1997
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-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 5,429,000
<SECURITIES> 0
<RECEIVABLES> 697,000 <F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 41,815,000
<DEPRECIATION> (12,553,000)
<TOTAL-ASSETS> 37,869,000
<CURRENT-LIABILITIES> 0
<BONDS> 26,130,000
<COMMON> 0
0
0
<OTHER-SE> 10,382,000
<TOTAL-LIABILITY-AND-EQUITY> 37,869,000
<SALES> 0
<TOTAL-REVENUES> 1,304,000
<CGS> 0
<TOTAL-COSTS> 1,561,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 669,000
<INCOME-PRETAX> (827,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (827,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (827,000)
<EPS-PRIMARY> (1,780.43)
<EPS-DILUTED> (1,780.43)
<FN>
<F1> Includes $330,000 of other assets.
</TABLE>
