<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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
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 33-42663
Winthrop Apartment Investors Limited Partnership
(Exact name of small business issuer as specified in its charter)
Maryland 04-3129840
(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 10
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WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10-QSB
MARCH 31, 1997
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
March 31, December 31,
Assets 1997 1996
-------- --------
<S> <C> <C>
Real estate, at cost:
Land $ 3,666 $ 3,666
Buildings and improvements, net of accumulated
depreciation of $2,454 (1997) and $2,304 (1996) 12,811 12,889
-------- --------
16,477 16,555
Other Assets:
Cash and cash equivalents 1,431 1,220
Escrow deposits and replacement reserves 653 756
Other assets 361 417
Deferred costs, net of accumulated amortization
of $535 (1997) and $489 (1996) 2,238 2,284
-------- --------
Total assets $ 21,160 $ 21,232
======== ========
Liabilities and Partners' Capital
Liabilities:
Mortgage payable $ 15,846 $ 15,885
Accounts payable and accrued expenses 288 458
Security deposits 124 127
-------- --------
Total liabilities 16,258 16,470
-------- --------
Partners' capital:
Limited partners' capital; 250 units authorized, issued
and outstanding 5,201 5,062
General partner's deficit (299) (300)
-------- --------
Total Partners' Capital 4,902 4,762
-------- --------
Total Liabilities and Partners' Capital $ 21,160 $ 21,232
======== ========
</TABLE>
See notes to financial statements.
2 of 10
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WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10-QSB
MARCH 31, 1997
Statements of Operations (Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
(In Thousands, Except Unit Data) March 31, March 31,
1997 1996
------- -------
<S> <C> <C>
Income:
Rental $ 1,214 $ 1,167
Other 61 58
Interest 11 30
------- -------
Total income 1,286 1,255
------- -------
Expenses:
Mortgage interest 296 292
Leasing 34 52
General and administrative 105 103
Management fees 63 61
Utilities 120 87
Repairs and maintenance 142 154
Painting and decorating 25 34
Insurance 36 46
Taxes 137 139
Amortization 38 21
Depreciation 150 141
------- -------
Total expenses 1,146 1,130
------- -------
Net income $ 140 $ 125
======= =======
Net income allocated to general partners $ 1 $ 1
======= =======
Net income allocated to limited partners $ 139 $ 124
======= =======
Net income per Unit of Limited Partnership Interest $ 556 $ 496
======= =======
Distributions per Unit of Limited Partnership Interest $ -- $68,500
======= =======
</TABLE>
See notes to financial statements.
3 of 10
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WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10-QSB
MARCH 31, 1997
Statements of Partners' Capital (Unaudited)
(In Thousands, Except Unit Data)
<TABLE>
<CAPTION>
Units of
Limited General Limited Total
Partnership partner's partners' partners'
Interest (deficit) capital capital
-------------------- --------------------- --------------------- --------------------
<S> <C> <C> <C> <C>
Balance - January 1, 1997 250 $ (300) $5,062 $4,762
Net income -- 1 139 140
------ ------ ------ ------
Balance - March 31, 1997 250 $ (299) $5,201 $4,902
====== ====== ====== ======
</TABLE>
See notes to financial statements.
4 of 10
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WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10-QSB
MARCH 31, 1997
Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
(In Thousands) March 31, March 31,
1997 1996
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 140 $ 125
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation 150 141
Amortization 46 45
Changes in assets and liabilities:
Decrease (increase) in other assets 56 (408)
Decrease in escrow deposits 139 --
Decrease in accounts payable and accrued expenses (170) (80)
Decrease in security deposits liability (3) (3)
-------- --------
Net cash provided by (used in) operating activities 358 (180)
-------- --------
Cash Flows from Investing Activities:
Additions to real estate (72) (35)
Reserve for replacement deposits (36) --
-------- --------
Cash used in investing activities (108) (35)
-------- --------
Cash Flows from Financing Activities:
Proceeds from mortgage financing -- 16,000
Principal payments on mortgage notes (39) (12)
Deferred financing costs -- (679)
Distributions -- (17,136)
-------- --------
Net cash used in financing activities (39) (1,827)
-------- --------
Net increase (decrease) in cash and cash equivalents 211 (2,042)
Cash and cash equivalents, beginning of period 1,220 3,455
-------- --------
Cash and cash equivalents, end of period $ 1,431 $ 1,413
======== ========
Supplemental Disclosure of Cash Flow Information-
Cash paid for interest $ 289 $ 219
======== ========
</TABLE>
See notes to financial statements.
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WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10-QSB
MARCH 31, 1997
NOTES TO FINANCIAL STATEMENTS
1. General
The accompanying financial statements, footnotes and discussions should be
read in conjunction with the financial statements, related footnotes and
discussions contained in the Partnership's Annual Report on Form 10-KSB 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
Winthrop Management, an affiliate of the Managing General Partner, is
entitled to receive 5% of gross receipts from all Partnership properties
they manage. For the three months ended March 31, 1997 and 1996, Winthrop
Management earned approximately $63,000 and $61,000, respectively. Winthrop
Management was also paid an $80,000 fee relating to the mortgage financing
in 1996.
During the quarter ended March 31, 1997, an affiliate of the Managing
General Partner acquired, pursuant to a tender offer, for a purchase price
of $30,000 per unit, approximately 17% of the total limited partnership
units of the Partnership (41.50 units).
3. Distributions
The Partnership expects to distribute approximately $382,500 ($1,530 per
unit) to the Limited Partners, which is net of a $97,000 overpayment during
1996, and approximately $144,000 to the general partners which includes the
$97,000 underpayment from the prior year, during the second quarter of
1997.
6 of 10
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WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10-QSB
MARCH 31, 1997
Item 2. Management's Discussion and Analysis or Plan of Operation
Liquidity and Capital Resources
All of the Registrant's real estate properties are residential properties with
apartments leased to tenants subject to leases of up to one year. The Registrant
receives rental income from its apartments and is responsible for operating
expenses, administrative expenses, capital improvements and debt service
payments. The Registrant uses working capital reserves provided from any
undistributed cash flow from operations and financing of properties as its
primary sources of liquidity. The Registrant expects to distribute approximately
$1,530 per unit ($382,500 in total), which is net of a $97,000 overpayment
during 1996, and approximately $144,000 to the general partners, which includes
the $97,000 underpayment from the prior year, during the second quarter of 1997.
During the quarter ended March 31, 1997, an affiliate of the Managing General
Partner acquired, pursuant to a tender offer, for a purchase price of $30,000
per unit, approximately 17% of the total limited partnership units of the
Registrant (41.50 units).
The level of liquidity based on cash and cash equivalents experienced a $211,000
increase at March 31, 1997 as compared to December 31, 1996. The increase was
due to $358,000 of net cash provided by operating activities, which was
partially offset by $108,000 of cash used in investing activities and $39,000 of
cash used in financing activities. Investing activities consisted of $72,000 of
improvements to real estate and a $36,000 increase in replacement reserves.
Financing activities consisted of $39,000 of mortgage principal payments. All
other increases (decreases) in certain assets and liabilities are the result of
the timing of receipt and payment of various operating activities.
Working capital reserves are currently being invested in short term money market
funds. The General Partner believes that, if market conditions remain relatively
stable, cash flow from operations when combined with working capital reserves,
will be sufficient to fund required capital improvements and debt service
payments in 1997 and the foreseeable future. The Registrant has no available
lines of credit.
The markets in which the Registrant's properties are located (Atlanta, Dallas
and Austin) remain relatively stable. Despite new construction, both the Atlanta
and Austin markets continue to remain stable. The Registrant spent $72,000 on
capital improvements during the three months ended March 31, 1997. The
Registrant anticipates it will spend approximately $241,000 for capital
improvements during the balance of 1997. Other than cash and cash equivalents,
the Registrant has no other available sources of liquidity.
7 of 10
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WINTHROP APARTMENT INVESTORS LIMITED PARTNERSHIP - FORM 10-QSB
MARCH 31, 1997
Item 2. Management's Discussion and Analysis or Plan of Operation (Continued)
Results of Operations
The Registrant's investment properties consist of four apartment complexes. The
following table sets forth the average occupancy of the properties for the three
months ended March 31, 1997 and 1996:
Average Occupancy
--------------------------------
Property 1997 1996
- ----------------- ------ ------
Chesapeake 89% 94%
Covington Creek 93% 93%
Northside Circle 88% 85%
Webb Bridge 88% 83%
Registrant's net income for the three months ended March 31, 1997, was
approximately $140,000, as compared to net income of approximately $125,000 for
the three months ended March 31, 1996.
Revenues for the three months ended March 31, 1997 increased by $31,000 due to
increases in rental revenue of $47,000 and other income of $3,000 which was
partially offset by a decrease in interest income of $19,000. Rental revenue
increased primarily due to an increase in rental rates for all properties and an
increase in occupancy at Webb Bridge Crossing and Northside Circle. The
occupancy of Chesapeake declined primarily due to construction of new apartment
complexes in the area. Interest income decreased primarily due to refinancing
proceeds received in January 1996 and distributed in February 1996.
Expenses increased by $16,000 for the three months ended March 31, 1997 as
compared to 1996, primarily due to increases in utilities of $33,000 and
amortization of $17,000, which were partially offset by decreases to repairs and
maintenance of $12,000 and leasing of $18,000. The increase in utilities was
primarily due to an increase in water and sewer. Amortization increased
primarily due to an increase in deferred assets. The decrease in repairs and
maintenance was due primarily to a decrease in flooring repairs and ground
maintenance. The decrease in leasing was due to a decrease in leasing payroll.
All other expenses remained relatively constant.
8 of 10
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WINTHROP APARTMENT INVESTORS 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
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months
ended March 31, 1997.
9 of 10
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WINTHROP APARTMENT INVESTORS 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.
WINTHROP APARTMENT INVESTORS
LIMITED PARTNERSHIP
BY: WAI Associates, A Limited Partnership
Its General Partner
BY: WAI Properties, Inc.
Its 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 14, 1997
10 of 10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Winthrop
Apartment Investors 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> 1,431,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 18,931,000
<DEPRECIATION> (2,454,000)
<TOTAL-ASSETS> 21,160,000
<CURRENT-LIABILITIES> 0
<BONDS> 15,846,000
<COMMON> 0
0
0
<OTHER-SE> 4,902,000
<TOTAL-LIABILITY-AND-EQUITY> 21,160,000
<SALES> 0
<TOTAL-REVENUES> 1,275,000
<CGS> 0
<TOTAL-COSTS> 850,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 296,000
<INCOME-PRETAX> 140,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 140,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 140,000
<EPS-PRIMARY> 556.00
<EPS-DILUTED> 556.00
</TABLE>
