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 June 30, 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_____
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<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB JUNE 30, 1996
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements.
Consolidated Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
June 30, December 31,
1996 1995
----------- -----------
Assets
Real Estate At Cost:
Buildings and improvements, net of accumulated
depreciation of $8,458 (1996) and $7,340 (1995) $ 48,867 $ 49,554
Other Assets:
Cash and cash equivalents 8,019 6,708
Tenant receivables 54 826
Insurance proceeds - 554
Deferred rent receivable 4,348 4,215
Deferred costs, net of accumulated amortization of
$1,015 (1996) and $862 (1995) 1,289 1,355
Other restricted cash and cash equivalents 4,373 3,567
Prepaid expenses and other assets 223 368
Restricted cash collateral 2,627 4,829
----------- -----------
Total Assets $ 69,800 $ 71,976
=========== ===========
Liabilities and Partners' Capital
Liabilities:
Permanent loan $ 36,800 $ 36,800
Accrued interest payable 14,907 13,619
Prepaid tenant rent 53 207
Accounts payable and accrued liabilities 2,474 4,221
Accrued repairs - 550
Due to affiliates 40 66
Security deposits 452 417
----------- -----------
Total Liabilities 54,726 55,880
----------- -----------
Commitments
Minority interest 1,196 1,056
----------- -----------
Partners' Capital (Deficit):
General Partner's deficit (3,820) (3,704)
Limited Partners' equity (270 units outstanding) 17,698 18,744
----------- -----------
Total Partners' Capital 13,878 15,040
----------- -----------
Total Liabilities and Partners' Capital $ 69,800 $ 71,976
=========== ===========
See notes to consolidated financial statements.
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<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB JUNE 30, 1996
Consolidated Statements of Operations (Unaudited)
(In Thousands, Except Unit Data)
For the Six Months Ended
June 30, 1996 June 30, 1995
------------- -------------
Revenues:
Rental income $ 5,023 $ 4,592
Interest 264 243
Other 203 390
------------- -------------
Total Revenues 5,490 5,225
------------- -------------
Expenses:
Real estate taxes 736 861
Payroll 273 254
Utilities 509 458
Repairs and maintenance 326 489
Advertising 72 63
Insurance 75 50
General and administrative 239 215
Security 175 192
Cleaning 242 231
Management fees 303 195
Interest 2,198 2,094
Lease costs and rental expense 411 418
Depreciation 1,118 926
Amortization 153 123
------------- -------------
Total Expenses 6,830 6,569
------------- -------------
Loss before minority interest (1,340) (1,344)
Minority interest in loss 178 186
------------- -------------
Net loss $ (1,162) $ (1,158)
============= =============
Net loss per unit of Limited Partnership Interest $(3,874.07) $(3,859.26)
============= =============
See notes to consolidated financial statements.
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WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB JUNE 30, 1996
Consolidated Statements of Operations (Unaudited)
(In Thousands, Except Unit Data)
For the Three Months Ended
June 30, 1996 June 30, 1995
------------- -------------
Revenues:
Rental income $ 2,531 $ 2,318
Interest 170 158
Other 38 240
------------- -------------
Total Revenues 2,739 2,716
------------- -------------
Expenses:
Real estate taxes 358 416
Payroll 143 133
Utilities 238 231
Repairs and maintenance 183 398
Advertising 50 37
Insurance 38 26
General and administrative 141 132
Security 101 84
Cleaning 179 125
Management fees 129 97
Interest 1,124 813
Lease costs and rental expense 205 207
Depreciation 559 463
Amortization 101 62
------------- -------------
Total Expenses 3,549 3,224
------------- -------------
Loss before minority interest (810) (508)
Minority interest in loss 106 76
------------- -------------
Net loss $ (704) $ (432)
============= =============
Net loss per unit of Limited Partnership Interest $(2,348.15) $(1,440.74)
============= =============
See notes to consolidated financial statements.
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<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB JUNE 30, 1996
Consolidated Statement of Changes in Partners' Capital (Deficit) (Unaudited)
(In Thousands, Except Unit Data)
Units of
Limited Limited General
Partnership Partners' Partner's
Interest Equity Deficit Total
----------- ----------- ----------- -----------
Balance - December 31, 1995 270 $ 18,744 $ (3,704) $ 15,040
Net loss - (1,046) (116) (1,162)
----------- ----------- ----------- -----------
Balance - June 30, 1996 270 $ 17,698 $ (3,820) $ 13,878
=========== =========== =========== ===========
See notes to consolidated financial statements.
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<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB JUNE 30, 1996
Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended
(In Thousands) June 30, 1996 June 30, 1995
------------- -------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (1,162) $ (1,158)
Minority interest in loss (178) (186)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 1,118 926
Amortization 153 123
Recovery of bad debt expense (117) -
Changes in assets and liabilities:
Deferred rent receivable (133) (986)
Amounts due to affiliates (26) -
Accounts payable, accrued
liabilities and security deposits (2,262) (288)
Prepaid tenant rent (154) (97)
Accrued interest 1,288 2,093
Tenant receivables 889 439
Insurance proceeds 554 -
Prepaid expenses and other assets 145 223
------------- -------------
Net cash provided by operating activities 115 1,089
------------- -------------
Cash Flows From Investing Activities:
Increase in restricted cash (806) -
Deferred costs (87) (617)
Additions to building and improvements (431) (255)
------------- -------------
Cash used in investing activities (1,324) (872)
------------- -------------
Cash Flows From Financing Activities:
Minority interest capital contributions received 318 132
Net withdrawals from mortgage escrow 2,202 1,400
Increase in building repair escrow, net of accrued liability - (309)
------------- -------------
Cash provided by financing activities 2,520 1,223
------------- -------------
Net increase in cash and cash equivalents 1,311 1,440
Cash and cash equivalents, beginning of period 6,708 5,834
------------- -------------
Cash and cash equivalents, end of period $ 8,019 $ 7,274
============= =============
Supplemental disclosure of cash flow information -
Cash paid for interest $ 910 $ 2
============= =============
</TABLE>
See notes to consolidated financial statements.
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<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB JUNE 30, 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
June 30, 1996 presentation. The balance sheet at December 31, 1995 was
derived from audited financial statements at such date.
The results of operations for the six and three months ended June 30, 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 Great Western Bank ("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
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. The Partnership expects to receive final payment in early fourth
quarter of 1996.
3. Accounting Change
On January 1, 1996, the Partnership adopted Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of ", which
requires impairment losses to be recognized for long-lived assets used in
operations when indicators of impairment are present and the undiscounted
cash flows are not sufficient to recover the asset's carrying amount. The
impairment loss is measured by comparing the fair value of the asset to its
carrying amount. The adoption of the SFAS had no effect on the
Partnership's financial statements.
4. 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 $303,000 were
earned by affiliates during the period ending June 30,1996.
The Operating Partnerships owed affiliates of the General Partner $40,000
at June 30, 1996 as reimbursement for various costs incurred in the
ordinary course of operations.
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WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB JUNE 30, 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 (collectively, the "Operating Partnerships")
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"). Miami Tower and Miami Retail
(collectively, the "Operating Partnerships") generate rental revenue
from the Property and are responsible for the Property's operating
expenses, administrative expenses, debt service and capital
improvements. No distributions were made to partners in 1995 or 1996
and none are anticipated at this time.
The Registrant's primary source of revenue is distributions from the
cash flow of the Operating Partnerships. There were no distributions
received from the Operating Partnerships during the six months ended
June 30, 1996. The Registrant used cash reserves to satisfy
administrative and other expenses during the six months ended June 30,
1996.
The Registrant's and the Operating Partnership's level of liquidity,
on a consolidated basis, increased $1,311,000 during the six months
ended June 30, 1996, as compared to December 31, 1995, as the
$2,520,000 of cash provided by financing activities and $115,000 of
cash provided by operating activities was partially offset by
$1,324,000 of cash used in investing activities. Cash provided by
financing activities consisted of $2,202,000 of withdrawals from the
mortgage escrow and $318,000 of minority interest capital
contributions. Cash used in investing activities consisted of an
$806,000 increase in restricted cash, $431,000 of additions to
building and improvements and $87,000 of deferred costs paid. All
other increases (decreases) in certain assets and liabilities are the
result of the timing of receipt and payment of various activities.
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 certain capital and other approved expenditures,
including leasing costs, 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 June 30, 1996, the balance
in this account was $2,627,000.
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 June 30, 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 June 30, 1996
was approximately $3,195,000. The repair and maintenance work
associated with the damage and the structural buildout is
substantially complete. The remaining funds in the escrow account will
be used for tenant improvements, as the property is leased up. No
other significant capital improvements are planned in the near future
for the Property other than tenant improvements
8 of 11
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB JUNE 30, 1996
Item 2. Management's Discussion and Analysis or Plan of Operations
Liquidity and Capital Resources (Continued)
which are incidental to the leasing-up of the Property.
The Property is encumbered by a participating loan in the amount of
$36,800,000. Minimum interest payments of 7% per annum will be
required beginning November 1996. It is anticipated that cash flow
from operations will be sufficient to satisfy the required minimum
interest payments. 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 is in the process of obtaining an
independent appraisal, which is satisfactory to the RTC, in compliance
with the aforementioned provision. In the event the appraised value
and WFA's net worth are not sufficient to cure the deficiency, and WFA
does not deposit with the RTC the amount required to cure the
deficiency, the RTC has the option, among other remedies, to
accelerate the maturity of the permanent loan and make all amounts
under the loan immediately due and payable.
Results of Operations
Operating results, before minority interest, improved by $4,000 for
the six months ended June 30, 1996 and declined by $302,000 for the
three months ended June 30, 1996, respectively, as compared to 1995.
The increase of $4,000 for the six months ended June 30, 1996 is due
to increases in revenues of $265,000 and expenses of $261,000. The
decline for the three month period is primarily the result of an
underaccrual of interest expense in the 1995 period.
Revenues for the six months ended June 30, 1996, as compared to 1995,
increased due to an increase in rental income of $431,000 and interest
income of $21,000, which was partially offset by a decrease in other
income of $187,000. Rental revenues increased due to an increase in
occupancy from 78% in June 1995 to 83% in June 1996 coupled with an
increase in rental rates. Interest income increased due to an increase
in average working capital reserves available for investment. Other
income declined due to a decrease in operating escalation billbacks
primarily relating to the Great Western lease.
Expenses for the six months ended June 30, 1996, as compared to 1995,
increased by $261,000 due to increases in depreciation ($192,000),
management fees ($108,000), interest expense ($104,000), utilities
($51,000), amortization ($30,000), insurance ($25,000), general and
administrative ($24,000), payroll ($19,000), cleaning ($11,000) and
advertising ($9,000) which were partially offset by decreases in
repairs and maintenance ($163,000), real estate taxes ($125,000),
security ($17,000) and lease costs and rental expenses ($7,000). The
increase in interest expense was attributable to the compounding of
interest on the mortgage note. Depreciation expense increased due to
an increase in tenant improvements. Real estate taxes decreased due to
an overaccrual in the prior comparative period.
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<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB JUNE 30, 1996
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27. Financial Data Schedule.
(b) Reports on Form 8K:
No report on Form 8-K was filed during the period.
10 of 11
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB JUNE 30, 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
BY: /S/ Michael L. Ashner
-----------------------
Michael L. Ashner
Chief Executive Officer
BY: /S/ Edward V. Williams
-----------------------
Edward V. Williams
Chief Financial Officer
DATED: August 13, 1996
11 of 11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
LEGEND
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 15,019,000<F1>
<SECURITIES> 0
<RECEIVABLES> 54,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 57,325,000
<DEPRECIATION> (8,458,000)
<TOTAL-ASSETS> 69,800,000
<CURRENT-LIABILITIES> 0
<BONDS> 36,800,000
0
0
<COMMON> 0
<OTHER-SE> 13,878,000
<TOTAL-LIABILITY-AND-EQUITY> 69,800,000
<SALES> 0
<TOTAL-REVENUES> 5,226,000
<CGS> 0
<TOTAL-COSTS> 4,393,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,198,000
<INCOME-PRETAX> (1,162,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,162,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,162,000)
<EPS-PRIMARY> (3,874.07)
<EPS-DILUTED> (3,874.07)
<FN>
<F1>Cash includes $7,000,000 of restricted cash.
</FN>
</TABLE>
