<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT PURSUANT TO 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 33-45291
Winthrop Miami Associates Limited Partnership
---------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 04-3131735
----------------------------------- ------------------------------------
(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 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 MIAMI ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB MARCH 31, 1996
PART I - 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:
Buildings and improvements, net of accumulated
depreciation of $7,899,000 (1996) and
$7,340,000 (1995) $49,935,000 $49,554,000
Other Assets:
Cash and cash equivalents 8,190,000 6,708,000
Tenant receivables 74,000 827,000
Insurance proceeds -- 554,000
Deferred rent receivable 4,282,000 4,215,000
Deferred costs, net of accumulated amortization of
$914,000 (1996) and $862,000 (1995) 1,338,000 1,354,000
Other restricted cash and cash equivalents 4,120,000 3,567,000
Prepaid expenses and other assets 327,000 368,000
Restricted cash collateral 2,996,000 4,829,000
------------ ------------
Total Assets $71,262,000 $71,976,000
============ ============
Liabilities and Partners' Capital
Liabilities:
Permanent loan $36,800,000 $36,800,000
Accrued interest payable 14,393,000 13,619,000
Prepaid tenant rent 136,000 207,000
Accounts payable and accrued liabilities 3,099,000 4,221,000
Accrued repairs 550,000 550,000
Due to affiliates 33,000 66,000
Security deposits 422,000 417,000
------------ ------------
Total Liabilities 55,433,000 55,880,000
------------ ------------
Commitments
Minority interest 1,247,000 1,056,000
------------ ------------
Partners' Capital (Deficit):
General Partner's deficit (3,750,000) (3,704,000)
Limited Partners' equity (270 units outstanding) 18,332,000 18,744,000
------------ ------------
Total Partners' Capital 14,582,000 15,040,000
------------ ------------
Total Liabilities and Partners' Capital $71,262,000 $71,976,000
============ ============
</TABLE>
See notes to consolidated financial statements.
2 of 10
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB MARCH 31, 1996
Consolidated Statements of Operations (Unaudited)
For the Three Months Ended
March 31, March 31,
1996 1995
Revenues:
Rental income $ 2,492,000 $ 2,274,000
Interest 94,000 85,000
Other 165,000 150,000
----------- -----------
Total Revenues 2,751,000 2,509,000
----------- -----------
Expenses:
Real estate taxes 378,000 445,000
Payroll 130,000 121,000
Utilities 271,000 227,000
Repairs and maintenance 143,000 91,000
Advertising 22,000 26,000
Insurance 37,000 24,000
General and administrative 98,000 83,000
Security 74,000 108,000
Cleaning 63,000 106,000
Management fees 174,000 98,000
Interest 1,074,000 1,281,000
Lease costs and rental expense 206,000 211,000
Depreciation 559,000 463,000
Amortization 52,000 61,000
----------- -----------
Total Expenses 3,281,000 3,345,000
----------- -----------
Loss before minority interest (530,000) (836,000)
Minority interest in loss 72,000 110,000
----------- -----------
Net loss $ (458,000) $ (726,000)
=========== ===========
Net loss per unit of Limited Partnership Interest $ (1,525.93) $ (2,418.52)
=========== ===========
See notes to consolidated financial statements.
3 of 10
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB MARCH 31, 1996
Consolidated Statement of Changes in Partners' Capital (Deficit) (Unaudited)
Limited General
Partners' Partner's
Equity Deficit Total
Balance - December 31, 1995 $ 18,744,000 $ (3,704,000) $ 15,040,000
Net loss (412,000) (46,000) (458,000)
------------ ------------ ------------
Balance - March 31, 1996 $ 18,332,000 $ (3,750,000) $ 14,582,000
============ ============ ============
See notes to consolidated financial statements.
4 of 10
<PAGE>
WINTHROP MIAMI 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
Cash Flows from Operating Activities:
<S> <C> <C>
Net loss $ (458,000) $ (726,000)
Minority interest in loss (72,000) (110,000)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation 559,000 463,000
Amortization 52,000 61,000
Recovery of bad debt expense (149,000) --
Changes in assets and liabilities:
Deferred rent receivable (67,000) (498,000)
Amounts due to affiliates (33,000) 5,000
Accounts payable, accrued
liabilities and security deposits (1,117,000) (452,000)
Prepaid tenant rent (71,000) (100,000)
Accrued interest 774,000 1,036,000
Tenant receivables 902,000 711,000
Insurance proceeds 554,000 --
Prepaid expenses and other assets 41,000 203,000
----------- -----------
Net cash provided by operating activities 915,000 593,000
----------- -----------
Cash Flows From Investing Activities:
Increase in restrictive cash (553,000) --
Deferred costs (36,000) (587,000)
Additions to building and improvements (940,000) (208,000)
----------- -----------
Cash used in investing activities (1,529,000) (795,000)
----------- -----------
Cash Flows From Financing Activities:
Minority interest capital contributions received 263,000 115,000
Net withdrawals from mortgage escrow 1,833,000 767,000
----------- -----------
Cash provided by financing activities 2,096,000 882,000
----------- -----------
Net increase in cash and cash equivalents 1,482,000 680,000
Cash and cash equivalents, beginning of period 6,708,000 5,834,000
----------- -----------
Cash and cash equivalents, end of period $ 8,190,000 $ 6,514,000
=========== ===========
Supplemental disclosure of cash flow information -
Cash paid for interest $ 300,000 $ --
=========== ===========
</TABLE>
See notes to consolidated financial statements.
5 of 10
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WINTHROP MIAMI 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 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. Settlement Agreement
In February 1996 the Operating Partnerships settled a lawsuit, which
had commenced in 1993, with a defaulted tenant, ("Great Western"). The
Operating Partnerships had taken the position that Great Western's
lease is a net lease. Great Western took the position that its lease
was a full service net lease. Great Western had withheld operating
escalation charges billed to it during 1994, 1993, and 1992. Unable to
resolve this dispute with Great Western, the Operating Partnerships
commenced legal action against Great Western. Great Western, filed a
counter lawsuit regarding certain lease violations by the Operating
Partnerships. In February 1996, the parties entered into a negotiated
settlement agreement whereby the tenant agreed to pay the Operating
Partnerships approximately $950,000 of which $250,000 is contingent
upon completion of certain building improvements and signage
installation. Their lease was also restructured, resulting in higher
base lease rates over the remaining lease term; a reduction in leased
space of approximately 6,000 square feet; and a full service lease with
a 1996 base year. In the first quarter of 1996, the Operating
Partnerships received approximately $725,000.
3. Related Party Transactions
Management and leasing fees are paid to an affiliate of the general
partner and are based on 6% of cash receipts. Fees of $174,000 were
earned by affiliates during the period ending March 31,1996.
The Operating Partnerships owed affiliates $33,000 at March 31, 1996 as
reimbursement for various costs incurred in the ordinary course of
operations.
6 of 10
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WINTHROP MIAMI 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's sole assets are its approximately 88% interest in each
of Miami Tower Associates Limited Partnership ("Miami Tower") and Miami
Retail Associates Limited Partnership ("Miami Retail"). Miami Tower and
Miami Retail own a 37-story commercial office building located in
Miami, Florida and a ground floor retail arcade located in the same
building, respectively (the "Property").
The Registrant's primary source of revenue is distributions from the
cash flow of Miami Tower and Miami Retail (collectively, the "Operating
Partnerships"). There were no distributions received from the Operating
Partnerships during the first quarter of 1996. The Registrant used cash
reserves to satisfy administrative and other expenses during the three
months ended March 31, 1996.
The Registrant's and the Operating Partnerships' level of liquidity, on
a consolidated basis, increased $1,482,000 during the first quarter of
1996 due to $2,096,000 of cash provided by financing activities and
$915,000 of cash provided by operating activities, which was partially
offset by $1,529,000 of cash used in investing activities. The increase
in cash is primarily attributable to the withdrawal of approximately
$1,800,000 from an escrow account of which $940,000 was used for
capital improvements and the receipt of approximately $725,000 from
Great Western (see Item 1, Note 2). The Registrant invests its working
capital reserves in a money market account or repurchase agreements
secured by United States Treasury obligations.
In addition to unrestricted cash, the Registrant maintains an escrow
account, as required under the loan documents for the debt encumbering
the Property (the "Permanent Loan"). The escrow account was established
to fund permitted escrow uses and is secured by a letter of credit. The
Registrant maintains a cash collateral account to secure its
obligations under the letter of credit. At March 31, 1996, the balance
in this account was $2,996,000.
On October 14, 1994, the Property's fire suppression systems
malfunctioned, causing severe water damage to the Property. The damage
was substantially covered by insurance. During 1995, Miami Tower
settled its insurance claim relating to its damage. The insurance
carrier agreed to pay Miami Tower approximately $8,942,000, all of
which was received by March 31, 1996. Under the terms of the Permanent
Loan, insurance proceeds were placed into an escrow account under the
control of the RTC. The balance of the escrow account at March 31, 1996
was approximately $3,345,000. The repair and maintenance work
associated with the damage has been substantially completed; however,
the structural buildout is only in its initial phase and is expected to
be paid from the remaining funds in the escrow account. No other
significant capital improvements are planned in the near future for the
Property other than tenant improvements which are incidental to the
leasing-up of the Property.
7 of 10
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP - FORM 10 - QSB MARCH 31, 1996
Item 2. Management's Discussion and Analysis or Plan of Operations
Liquidity and Capital Resources (Continued)
In December 1995, the RTC notified the Operating Partnerships that an
event of default existed under the Permanent Loan encumbering the
properties due to the net worth of Winthrop Financial Associates
("WFA") being less than the required minimum of $10,000,000. Under the
terms of the Permanent Loan documents, the Operating Partnerships can
cure this event of default if an independent appraisal of the Property
indicates that the sum of the amount by which the fair market value of
the Property exceeds $44,000,000 plus WFA's net worth is $10,000,000 or
greater. In addition, the event of default can be cured if WFA deposits
with the lender an amount equal to $10,000,000 less the sum of WFA's
net worth and the amount by which the fair value of the Property
exceeds $44,000,000. The Registrant has engaged an independent
appraisal firm, approved by the RTC, in compliance with the
aforementioned provision.
Results of Operations
Operating results, before minority interest, improved by $306,000 for
the three months ended March 31, 1996, as compared to 1995, due to an
increase in revenues of $242,000 and a decrease in expenses of $64,000.
Revenues increased by $242,000 for the three months ended March 31,
1996, as compared to 1995, due to increases in rental income of
$218,000, interest income of $9,000 and other income of $15,000. Rental
revenues increased due to an increase in occupancy from 82% in March
1995 to 85% in March 1996 coupled with an increase in rental rates.
Interest income increased by $9,000 due to an increase in average
working capital reserves available for investment.
Expenses decreased by $64,000 due to decreases in interest expense
($207,000), real estate taxes ($67,000), cleaning ($43,000), security
($34,000), amortization ($9,000), lease costs and rental expense
($5,000) and advertising ($4,000), which were partially offset by
increases in depreciation ($96,000), management fees ($76,000), repairs
and maintenance ($52,000), utilities ($44,000), general and
administrative ($15,000), insurance ($13,000) and payroll ($9,000).
Management fees are based on cash collected. The increase in management
fees in the first quarter of 1996 is due to Great Western payment of
monies owed and the increase in rents since the first quarter of 1995.
8 of 10
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WINTHROP MIAMI 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.
9 of 10
<PAGE>
WINTHROP MIAMI 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.
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
(Registrant)
BY: ONE INTERNATIONAL ASSOCIATES
LIMITED PARTNERSHIP,
ITS GENERAL PARTNER
BY: ONE INTERNATIONAL, INC.
ITS GENERAL PARTNER
DATED: May 15, 1996 BY: /S/ Michael L. Ashner
---------------------
Michael L. Ashner
Chief Executive Officer
DATED: May 15, 1996 BY: /S/ Edward V. Williams
----------------------
Edward V. Williams
Chief Financial Officer
10 of 10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Winthrop
Miami 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> 15,306,000 <F1>
<SECURITIES> 0
<RECEIVABLES> 74,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 57,834,000
<DEPRECIATION> (7,899,000)
<TOTAL-ASSETS> 71,262,000
<CURRENT-LIABILITIES> 0
<BONDS> 36,800,000
0
0
<COMMON> 0
<OTHER-SE> 14,582,000
<TOTAL-LIABILITY-AND-EQUITY> 71,262,000
<SALES> 0
<TOTAL-REVENUES> 2,657,000
<CGS> 0
<TOTAL-COSTS> 2,109,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,074,000
<INCOME-PRETAX> (458,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (458,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (458,000)
<EPS-PRIMARY> (1,525.93)
<EPS-DILUTED> (1,525.93)
<FN>
<F1> Cash included $2,996,000 or restricted cash and $4,120,000 of other
restricted cash and cash equivalents.
</FN>
</TABLE>
