<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, 2000
--------------
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)
Five Cambridge Center, Cambridge, MA 02142
- ---------------------------------------- ------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (617) 234-3000
--------------
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 12
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 2000
PART 1 - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets (Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
(In Thousands, Except Unit Data) 2000 1999
--------------------- --------------------
<S> <C> <C>
Assets
Real estate, at cost:
Land $ 1,700 $ 1,700
Buildings and improvements, net of accumulated
depreciation of $18,768 (2000) and $18,159 (1999) 30,206 30,800
--------------------- --------------------
31,906 32,500
Other Assets:
Cash and cash equivalents 3,429 3,194
Restricted cash 2,553 2,528
Other assets 274 284
Deferred rent receivable 1,207 1,152
Deferred costs, net of accumulated amortization
of $2,072 (2000) and $1,902 (1999) 2,514 2,575
--------------------- --------------------
Total assets $ 41,883 $ 42,233
===================== ====================
Liabilities and Partners' Capital
Liabilities:
Mortgage loan payable $ 37,000 $ 37,000
Accrued interest payable 301 287
Accounts payable and accrued expenses 1,519 1,737
Payable to related party 268 285
Security deposits 128 128
--------------------- --------------------
Total liabilities 39,216 39,437
--------------------- --------------------
Partners' Capital:
Preferred unit holders' deficit (460 units outstanding) (626) (626)
Investor limited partners' capital (460 units outstanding) 4,816 4,944
General partner's deficit (1,523) (1,522)
--------------------- --------------------
Total Partners' Capital 2,667 2,796
--------------------- --------------------
Total Liabilities and Partners' Capital $ 41,883 $ 42,233
===================== ====================
</TABLE>
See notes to consolidated financial statements.
2 of 12
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 2000
<TABLE>
<CAPTION>
Consolidated Statements of Operations (Unaudited) For the Three Months Ended
March 31, March 31,
(In Thousands, Except Unit Data) 2000 1999
--------------------- --------------------
<S> <C> <C>
Revenues:
Rental $ 2,409 $ 2,186
Other 185 144
--------------------- --------------------
Total revenues 2,594 2,330
--------------------- --------------------
Expenses:
Real estate taxes 196 136
Payroll and payroll expense reimbursements 121 192
Operating expenses 160 193
Repairs and maintenance 211 231
Utilities 215 224
Management and other fees 174 158
General and administrative costs 22 35
Insurance 22 27
Depreciation 609 548
Amortization 111 131
--------------------- --------------------
Total expenses 1,841 1,875
--------------------- --------------------
Operating income 753 455
Non-operating income (expense):
Interest income 59 50
Interest expense (941) (608)
--------------------- --------------------
Net loss $ (129) $ (103)
===================== ====================
Net loss allocated:
General Partners $ (1) $ (1)
Preferred Unit Holders - (68)
Investor Limited Partners (128) (34)
--------------------- --------------------
$ (129) $ (103)
===================== ====================
Net loss allocated per unit:
Preferred Unit Holders $ - $ (147.83)
===================== ====================
Investor Limited Partners $ (278.26) $ (73.91)
===================== ====================
</TABLE>
See notes to consolidated financial statements.
3 of 12
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 2000
Consolidated Statement of Partners' Capital (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
Preferred
Units of Units of Preferred Investor
Limited Limited Unit Limited General
Partnership Partnership Holders' Partners' Partner's
Interest Interest Deficit Capital Deficit Total
-------------- --------------- ----------- ----------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
Balance - January 1, 2000 460 460 $ (626) $ 4,944 $ (1,522) $ 2,796
Net loss - - - (128) (1) (129)
--------------- --------------- ----------- ----------- ---------------- --------------
Balance - March 31, 2000 460 460 $ (626) $ 4,816 $ (1,523) $ 2,667
=============== =============== =========== =========== ================ ==============
</TABLE>
See notes to consolidated financial statements.
4 of 12
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 2000
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows (Unaudited)
(In Thousands) For the Three Months Ended
March 31, March 31,
2000 1999
--------------------- --------------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (129) $ (103)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 779 679
Deferred rent receivable (55) (70)
Changes in assets and liabilities:
Other assets 10 7
Accrued interest payable 14 (1)
Accounts payable, accrued expenses, payable
to related party and security deposits (235) (170)
--------------------- --------------------
Net cash provided by operating activities 384 342
--------------------- --------------------
Cash Flows from Investing Activities:
Additions to buildings and improvements (15) (120)
Restricted cash (25) (4)
Deferred costs (109) (110)
--------------------- --------------------
Cash used in investing activities (149) (234)
--------------------- --------------------
Cash Flows from Financing Activities:
Principal payments on mortgage loan - (77)
--------------------- --------------------
Cash used in financing activities - (77)
--------------------- --------------------
Net Increase in Cash and Cash Equivalents 235 31
Cash and Cash Equivalents, Beginning of Period 3,194 3,788
--------------------- --------------------
Cash and Cash Equivalents, End of Period $ 3,429 $ 3,819
===================== ====================
Supplemental Disclosure of Cash Flow Information:
Cash Paid For Interest $ 869 $ 609
===================== ====================
</TABLE>
See notes to consolidated financial statements.
5 of 12
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 2000
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 "Partnership". 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 on Form 10-KSB
for the year ended December 31, 1999.
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, 2000 presentation. The balance sheet at
December 31, 1999 was derived from audited financial statements at such
date.
The results of operations for the three months ended March 31, 2000 and
1999 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, A Limited Partnership, the managing general partner of the
Investor Partnership (the "General Partner"). Related party
transactions with the General Partner and its affiliates include the
following:
a. The Operating Partnership pays to an affiliate of the General
Partner an annual property management fee equal to 5% of cash
receipts. For the three months ended March 31, 2000 and 1999,
management fees of approximately $126,000 and $113,000,
respectively, were incurred.
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 approximately $190,000 per annum. Fees
of approximately $48,000 and $45,000 were paid or accrued
during the periods ended March 31, 2000 and 1999,
respectively.
c. The Partnership pays or accrues to an affiliate of the General
Partner a construction management fee equal to 5% of the
aggregate cost of each applicable construction project. Fees
of approximately $6,000 and $7,000 were incurred during the
three months ended March 31, 2000 and 1999, respectively, and
have been capitalized to the cost of buildings and
improvements.
6 of 12
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 2000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Allocation of Income and Cash Distributions
In accordance with the Second Amended and Restated Partnership
Agreement (the "Agreement"), losses are allocated 1% to the General
Partner and 99% to the limited partners in proportion to and to the
extent of the positive balances in the limited partners' capital
accounts. Net income is allocated, first, to the Preferred Unitholders
in an amount equal to the excess of the cumulative distributions made
or to be made; second, to restore net loss previously allocated to the
Preferred Unitholders; and the balance to the Unitholders and to the
General Partner, to restore net loss previously allocated to them
during the period that the Preferred Units were outstanding. Gain from
the disposition of the Partnership's property is allocated in
accordance with the Agreement. The Agreement also provides that while
the Preferred Units are outstanding, cash flow and capital proceeds (as
defined in the Agreement) shall be distributed first to the Preferred
Unitholders in an amount equal to a cumulative annual 12%
non-compounded return on their preferred invested capital; and in the
case of capital proceeds only, to the Preferred Unitholders in a
cumulative amount equal to the greater of $46,500 (per Preferred Unit)
or an amount equal to the subscription price per Preferred Unit
together with a cumulative annual 15% compounded return thereon. Cash
flow is then distributed 99% to the limited partners and 1% to the
General Partner until the limited partners have received an amount
equal to an annual 6% per annum noncumulative, noncompounded return on
their invested capital and the balance, if any, 97% to the limited
partners, and 3% to the General Partners.
4. Segment Information
The Partnership has two reportable segments, the Office Tower and the
Garage. The Partnership evaluates performance based on net operating
income, which is income before depreciation, amortization, interest and
non-operating items.
Segment information for the three months ended March 31, 2000 and 1999,
is shown in the tables below (in thousands). The "Other" column
includes partnership administrative items and income and expense not
allocated to a reportable segment.
<TABLE>
<CAPTION>
Office Parking
Tower Garage Other Total
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
2000
----
Rental income $ 2,409 $ - $ - $ 2,409
Other income 71 114 - 185
Interest income 43 - 16 59
Interest expense 908 33 - 941
Depreciation and amortization 709 11 - 720
Segment profit (loss) (124) 70 (75) (129)
Total assets 39,555 1,087 1,241 41,883
Capital expenditures 15 - - 15
</TABLE>
7 of 12
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 2000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Segment Information (Continued)
<TABLE>
<CAPTION>
Office Parking
Tower Garage Other Total
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
1999
----
Rental income $ 2,186 $ - $ - $ 2,186
Other income 41 103 - 144
Interest income 18 - 32 50
Interest expense 586 22 - 608
Depreciation and amortization 668 11 - 679
Segment profit (loss) (135) 70 (38) (103)
Total assets 36,520 1,132 3,067 40,719
Capital expenditures 120 - - 120
</TABLE>
5. Subsequent Event
In April 2000, the Partnership distributed $1,500,000 ($3,260.87 per
unit) of cash from operations to the Preferred Unitholders.
8 of 12
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 2000
Item 2. Management's Discussion and Analysis or Plan of Operation
The matters discussed in this Form 10-QSB contain certain
forward-looking statements and involve risks and uncertainties
(including changing market conditions, competitive and regulatory
matters, etc.) detailed in the disclosures contained in this Form
10-QSB and the other filings with the Securities and Exchange
Commission made by the Partnership from time to time. The
discussion of the Partnership's liquidity, capital resources and
results of operations, including forward-looking statements
pertaining to such matters, does not take into account the effects
of any changes to the Partnership's operations. Accordingly,
actual results could differ materially from those projected in the
forward-looking statements as a result of a number of factors,
including those identified herein.
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 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 expenses as well as its
administrative costs.
The Registrant's level of liquidity based on cash and cash
equivalents increased by $235,000 during the three months ended
March 31, 2000, as compared to December 31, 1999. The increase is
due to $384,000 of net cash provided by operating activities which
was partially offset by $149,000 of cash used in investing
activities. Cash used in investing activities consisted of
$109,000 of cash expended on leasing costs and commissions, an
increase of $25,000 in restricted cash and $15,000 of cash used
for improvements to real estate, primarily tenant improvements.
The Property is approximately 98% leased as of March 31, 2000. At
March 31, 2000, the Registrant's cash and cash equivalents has
been invested primarily in money market accounts.
At March 31, 2000, one tenant occupied, under several leases,
approximately 137,000 square feet. The leases representing
approximately 103,000 square feet of this space expired on March
31, 2000 and were not renewed. The Partnership is currently
showing this space to various potential tenants. As of April 30,
2000, occupancy is approximately 82%.
9 of 12
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 2000
Item 2. Management's Discussion and Analysis or Plan of Operation
(Continued)
Liquidity and Capital Resources (Continued)
The sufficiency of existing liquid assets to meet future liquidity
and capital expenditure requirements is directly related to the
level of capital expenditures required at the Property to
adequately maintain the physical assets and the other operating
needs of the Operating Partnership. Such assets are currently
thought to be sufficient for any near-term needs of the Operating
Partnership. As a result of a refinancing in 1999, the Partnership
distributed $10,695,000 to the Preferred Unitholders in October
1999 in satisfaction of a portion of the Preferred Unitholders
priority return. The mortgage indebtedness of $37,000,000 matures
on September 20, 2002. It is anticipated that the Operating
Partnership will be able to replace its maturing debt obligation
or, if such financing is not available, market the Property for
sale.
In April 2000, the Partnership distributed $1,500,000 ($3,260.87
per unit) of cash from operations to the Preferred Unitholders.
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 the limited partners will not receive a complete
return of their invested capital. The extent to which invested
capital is refunded to the limited partners and preferred unit
holders is dependent upon the performance of the Property and the
market in which it is located. Subsequent to September 2002, the
maturity date of the mortgage, the ability to hold and operate the
Property is dependent upon the Operating Partnership's ability to
refinance or restructure the first mortgage loan or sell the
Property.
Results of Operations
Operating results, before non-operating income (expense), improved
by $298,000 for the three months ended March 31, 2000, as compared
to 1999, due to an increase in revenue of $264,000 and a decrease
in expenses of $34,000.
Revenues for the three months ended March 31, 2000, as compared to
1999, increased due to an increase in rental income of $223,000
and an increase in other income of $41,000. Rental income
increased primarily due to increases in rental rates.
Expenses decreased by $34,000 for the three months ended March 31,
2000, as compared to 1999, primarily due to decreases in payroll
and payroll expense reimbursements ($71,000), operating expenses
($33,000), amortization expense ($20,000) and repairs and
maintenance ($20,000). These decreases were partially offset by
increases in depreciation ($61,000) and real estate taxes
($60,000). Payroll and payroll expense reimbursements decreased
primarily as a result of the reduction of administrative
personnel. Depreciation expense increased due to expenditures for
tenant improvements made in connection with an increase in leasing
activity in the previous two years. Real estate taxes increased as
a result of an increase in the assessed value of the Property.
Interest expense increased by $333,000 due to an increase in the
outstanding balance of the loan in connection with the refinancing
in September 1999. All other income and expense items, including
the garage operation, remained relatively constant.
10 of 12
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 2000
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.
11 of 12
<PAGE>
1999 BROADWAY ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 2000
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/ Thomas Staples
------------------------
Thomas Staples
Chief Financial Officer
DATED: May 15, 2000
12 of 12
<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>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 5,982,000<F1>
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 50,674,000
<DEPRECIATION> (18,768,000)
<TOTAL-ASSETS> 41,883,000
<CURRENT-LIABILITIES> 0
<BONDS> 37,000,000
<COMMON> 0
0
0
<OTHER-SE> 2,667,000
<TOTAL-LIABILITY-AND-EQUITY> 41,883,000
<SALES> 0
<TOTAL-REVENUES> 2,594,000
<CGS> 0
<TOTAL-COSTS> 1,819,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (941,000)
<INCOME-PRETAX> (129,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (129,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (129,000)
<EPS-BASIC> (278.26)
<EPS-DILUTED> (278.26)
<FN>
<F1>
Includes $2,553,000 of restricted cash.
</FN>
</TABLE>
