<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 September 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
----- -----
1 of 12
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1996
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements.
<TABLE>
<CAPTION>
Consolidated Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
September 30, December 31,
1996 1995
-------- --------
<S> <C> <C>
Assets
Real Estate At Cost:
Buildings and improvements, net of accumulated
depreciation of $9,017 (1996) and $7,340 (1995) $ 49,104 $ 49,554
Other Assets:
Cash and cash equivalents 8,655 6,708
Tenant receivables 62 826
Insurance proceeds -- 554
Deferred rent receivable 4,425 4,215
Deferred costs, net of accumulated amortization of
$1,093 (1996) and $862 (1995) 1,350 1,355
Restricted cash and cash equivalents 5,333 8,396
Prepaid expenses and other assets 281 368
-------- --------
Total Assets $ 69,210 $ 71,976
======== ========
Liabilities and Partners' Capital
Liabilities:
Permanent loan $ 36,800 $ 36,800
Accrued interest payable 15,682 13,619
Prepaid tenant rent 150 207
Accounts payable and accrued liabilities 1,300 4,221
Accrued repairs -- 550
Due to affiliates 48 66
Security deposits 487 417
-------- --------
Total Liabilities 54,467 55,880
-------- --------
Commitments
Minority interest 1,336 1,056
-------- --------
Partners' Capital (Deficit):
General Partner's deficit (3,867) (3,704)
Limited Partners' equity (270 units outstanding) 17,274 18,744
-------- --------
Total Partners' Capital 13,407 15,040
-------- --------
Total Liabilities and Partners' Capital $ 69,210 $ 71,976
======== ========
</TABLE>
See notes to consolidated financial statements.
2 of 12
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Consolidated Statements of Operations (Unaudited)
(In Thousands, Except Unit Data)
For the Nine Months Ended
September 30, September 30,
1996 1995
----------- -----------
<S> <C> <C>
Revenues:
Rental income $ 7,564 $ 6,998
Interest 389 468
Other 541 562
Insurance income -- 1,257
----------- -----------
Total Revenues 8,494 9,285
----------- -----------
Expenses:
Real estate taxes 1,102 1,271
Payroll 396 370
Utilities 862 720
Repairs and maintenance 502 703
Advertising 112 84
Insurance 112 75
General and administrative 317 272
Security 292 286
Cleaning 388 355
Management fees 436 300
Interest 3,317 2,937
Lease costs and rental expense 632 628
Depreciation 1,677 1,389
Amortization 231 184
----------- -----------
Total Expenses 10,376 9,574
----------- -----------
Loss before minority interest (1,882) (289)
Minority interest in loss 249 67
----------- -----------
Net loss $ (1,633) $ (222)
=========== ===========
Net loss allocated:
General Partner $ (163) $ (22)
Limited Partners (1,470) (200)
----------- -----------
$ (1,633) $ (222)
=========== ===========
Net loss per unit of Limited Partnership Interest $ (5,444.44) $ (740.74)
=========== ===========
</TABLE>
See notes to consolidated financial statements.
3 of 12
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Consolidated Statements of Operations (Unaudited)
(In Thousands, Except Unit Data)
For the Three Months Ended
September 30, September 30,
1996 1995
----------- -----------
<S> <C> <C>
Revenues:
Rental income $ 2,541 $ 2,406
Interest 125 225
Other 338 173
Insurance income -- 1,257
----------- -----------
Total Revenues 3,004 4,061
----------- -----------
Expenses:
Real estate taxes 366 410
Payroll 123 116
Utilities 353 262
Repairs and maintenance 176 214
Advertising 40 21
Insurance 37 25
General and administrative 78 57
Security 117 94
Cleaning 146 124
Management fees 133 105
Interest 1,119 843
Lease costs and rental expense 221 210
Depreciation 559 463
Amortization 78 61
----------- -----------
Total Expenses 3,546 3,005
----------- -----------
(Loss) income before minority interest (542) 1,056
Minority interest in loss (income) 71 (119)
----------- -----------
Net (loss) income $ (471) $ 937
=========== ===========
Net (loss) income allocated:
General Partner $ (47) $ 94
Limited Partners (424) 843
----------- -----------
$ (471) $ 937
=========== ===========
Net (loss) income per unit of Limited Partnership Interest $ (1,570.37) $ 3,122.22
=========== ===========
</TABLE>
See notes to consolidated financial statements.
4 of 12
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
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
---------------- ------------------ ------------------ -------------------
<S> <C> <C> <C> <C>
Balance - December 31, 1995 270 $ 18,744 $ (3,704) $ 15,040
Net loss -- (1,470) (163) (1,633)
---------------- ------------------ ------------------ -------------------
Balance - September 30, 1996 270 $ 17,274 $ (3,867) $ 13,407
================ ================== ================== ===================
</TABLE>
See notes to consolidated financial statements.
5 of 12
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows (Unaudited)
For the Nine Months Ended
(In Thousands) September 30, September 30,
1996 1995
----------- -----------
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (1,633) $ (222)
Minority interest in loss (249) (67)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation 1,677 1,389
Amortization 231 184
Recovery of bad debt expense (117) --
Deferred rent receivable (210) (1,478)
Changes in assets and liabilities:
Amounts due to affiliates (18) --
Accounts payable, accrued
liabilities and security deposits (3,401) 120
Prepaid tenant rent (57) (122)
Accrued interest 2,063 1,638
Tenant receivables 881 348
Insurance proceeds 554 --
Prepaid expenses and other assets 87 253
----------- -----------
Net cash (used in) provided by operating activities (192) 2,043
----------- -----------
Cash Flows From Investing Activities:
Decrease in restricted cash and cash equivalents 3,063 1,553
Deferred costs (226) (643)
Additions to building and improvements (1,227) (418)
----------- -----------
Net cash used in investing activities 1,610 492
----------- -----------
Cash Flows From Financing Activities:
Minority interest capital contributions received 529 153
Increase in building repair escrow, net of accrued liability -- (82)
----------- -----------
Net cash provided by financing activities 529 71
----------- -----------
Net increase in cash and cash equivalents 1,947 2,606
Cash and cash equivalents, beginning of period 6,708 5,834
----------- -----------
Cash and cash equivalents, end of period $ 8,655 $ 8,440
=========== ===========
Supplemental disclosure of cash flow information -
Cash paid for interest $ 1,254 $ 1,292
=========== ===========
</TABLE>
See notes to consolidated financial statements.
6 of 12
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 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
September 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 nine and three months ended September
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 was 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 received the final
payment during the third quarter of 1996. For the three months ended
September 30, 1996, the $250,000 final payment, which was previously fully
reserved for in 1995, was recorded as other income.
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 $436,000 were earned
by affiliates during the period ending September 30,1996.
The Operating Partnerships owed affiliates of the General Partner $48,000
at September 30, 1996 as reimbursement for various costs incurred in the
ordinary course of operations.
7 of 12
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 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 to be made in this fiscal year.
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 nine months ended
September 30, 1996. The Registrant used cash reserves to satisfy
administrative and other expenses during the nine months ended
September 30, 1996.
The Registrant's and the Operating Partnership's level of liquidity,
on a consolidated basis, increased $1,947,000 during the nine months
ended September 30, 1996, as compared to December 31, 1995, as the
$529,000 of cash provided by financing activities and $1,610,000 of
cash provided by investing activities was only slightly offset by
$192,000 of cash used in operating activities. Cash provided by
financing activities consisted of $529,000 of minority interest
capital contributions. Cash provided by investing activities
consisted of a $3,063,000 decrease in restricted cash, which was
offset by $1,227,000 of additions to building and improvements and
$226,000 of deferred leasing commissions paid. The $3,063,000
decrease in restricted cash consists of the payment of real estate
taxes, building and tenant improvements. Net cash used in operating
activities included approximately $2,300,000 of cash used for the
payment of accrued tenant improvements. The recovery of bad debt
expense reflects the collection of the Great Western receivable which
had previously been reserved for. 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 September 30, 1996,
the balance in this account was $1,142,000 and is included in
restricted cash and cash equivalents.
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 September 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 September 30, 1996 was approximately $2,619,000 and is
included in restricted cash and cash equivalents. The repair and
maintenance
8 of 12
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 1996
Item 2. Management's Discussion and Analysis or Plan of Operations
Liquidity and Capital Resources (Continued)
work associated with the damage and the structural buildout is
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 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, plus approximately $15,700,000 of accrued interest.
Minimum interest payments of 7% per annum will be required beginning
November 1996. Based on current projections of the Property's
operations, it is anticipated that cash flow from operations will be
sufficient to satisfy the required minimum interest payments for 1996
and 1997. 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 RTC is in process of obtaining their own appraisal
to determine compliance with the aforementioned provision. The
Registrant believes, based on its understanding of the market value
of similar properties, that the property should have an appraised
value sufficient to cure the default. 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, in which case the
Registrant's property could be lost through foreclosure.
Results of Operations
Operating results, before minority interest, declined by $1,593,000
for the nine months ended September 30, 1996 and by $1,598,000 for
the three months ended September 30, 1996, respectively, as compared
to 1995. The decrease for the nine and three months ended September
30, 1996 is primarily due to insurance income of $1,257,000
recognized in the third quarter of 1995.
Revenues, before insurance income, improved by $466,000 for the nine
months ended September 30, 1996, as compared to 1995, due to an
increase in rental income of $566,000, which was partially offset by
decreases in interest income of $79,000 and other income of $21,000.
Rental revenues increased due to an increase in occupancy from 78% in
September 1995 to 83% in September 1996 coupled with an increase in
rental rates. Registrant executed new leases covering 14,704 square
feet of space during the nine months ended September 30, 1996. Other
income declined due to a decrease in operating escalation billbacks
primarily relating to the Great Western lease, which was offset by
the receipt of the final portion of the Great Western Settlement.
9 of 12
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 1996
Item 2. Management's Discussion and Analysis or Plan of Operation
Results of Operations (Continued)
Expenses for the nine months ended September 30, 1996, as compared to 1995,
increased by $802,000 primarily due to increases in depreciation ($288,000),
management fees ($136,000), interest expense ($380,000), utilities ($142,000)
and amortization ($47,000), which were partially offset by decreases in repairs
and maintenance ($201,000) and real estate taxes ($169,000). The increase in
interest expense was attributable to the compounding of interest on the
mortgage note and an under accrual in the 1995 comparative period. Depreciation
expense increased due to an increase in tenant improvements required under
newly executed leases. Real estate taxes decreased due to an overaccrual in the
prior comparative period. Utilities expense increased due to an increase in
occupancy coupled with an increase in rates on electricity and water.
Amortization expense increased due to an increase in deferred costs associated
with new leasing activities. Management fees increased due to an increase in
rent collections and the receipt of the Great Western receivable in 1996.
Repairs and maintenance decreased due to higher general repair and maintenance
expenses in the prior year comparative period. All other expenses remained
relatively constant.
10 of 12
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 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 Reports of Form 8-K were filed during the nine months ended
September 30, 1996, however, on October 11, 1996 a current report
on Form 8-K was filed with respect to the Registrant's change of
independent auditors.
11 of 12
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 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: November 18, 1996
12 of 12
<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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 13,988,000<F1>
<SECURITIES> 0
<RECEIVABLES> 62,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 58,121,000
<DEPRECIATION> (9,017,000)
<TOTAL-ASSETS> 69,210,000
<CURRENT-LIABILITIES> 0
<BONDS> 36,800,000
<COMMON> 0
0
0
<OTHER-SE> 13,407,000
<TOTAL-LIABILITY-AND-EQUITY> 69,210,000
<SALES> 0
<TOTAL-REVENUES> 8,105,000
<CGS> 0
<TOTAL-COSTS> 6,742,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,317,000
<INCOME-PRETAX> (1,633,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,633,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,633,000)
<EPS-PRIMARY> (5,444.44)
<EPS-DILUTED> (5,444.44)
<FN>
<F1> Cash includes $5,333,000 of restricted cash.
</FN>
</TABLE>
