<PAGE>
SECURITIES AND EXCHANGE COMMISION
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, 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 33-45291
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
incorporation or organization) Identification No.)
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
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP FORM 10-QSB MARCH 31, 1997
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Item 1. Consolidated Financial Statements
1997 1996
------------ --------
<S> <C> <C>
REVENUES:
Rental income ............................................ $ 2,850,000 $ 2,492,000
Operating expense and tax escalation
reimbursements ......................................... 77,000 165,000
Interest income........................................... 133,000 94,000
----------- ----------
Total Revenues........................................ 3,060,000 2,751,000
---------- ----------
EXPENSES:
Repairs and maintenance................................... 187,000 143,000
Utilities................................................. 277,000 271,000
Payroll................................................... 147,000 130,000
Security ................................................. 94,000 74,000
Lease costs and rental expense............................ 248,000 206,000
Insurance................................................. 36,000 37,000
Real estate and other taxes............................... 452,000 378,000
Management fees .......................................... 142,000 174,000
General and administrative................................ 108,000 98,000
Advertising............................................... 24,000 22,000
Cleaning.................................................. 130,000 63,000
Interest expense.......................................... 1,150,000 1,074,000
Depreciation and amortization............................. 762,000 611,000
--------- ----------
Total Expenses........................................ 3,757,000 3,281,000
---------- ---------
(Loss) before minority interest.............................. (697,000) (530,000)
Minority interest in loss.................................... 81,000 72,000
----------- -------------
Net (loss)................................................... $ (616,000) $ (458,000)
========== =========
NET (LOSS) ALLOCATED TO
GENERAL PARTNER........................................... $ (61,000) $ (46,000)
========== ==========
NET (LOSS) ALLOCATED TO
INVESTOR LIMITED PARTNERS................................. $(555,000) $(412,000)
========== ========
Net (Loss) Per Investor
Limited Partner Unit...................................... $ (2,055.00) $ (1,525.93)
=========== ===========
Number of Investor Limited Partner
Units Outstanding............................................ 270 270
================ ================
</TABLE>
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP FORM 10-QSB MARCH 31, 1997
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
MARCH 31, 1997 AND DECEMBER 31, 1996
<TABLE>
<CAPTION>
ASSETS
1997 1996
------------ --------
<S> <C> <C>
Building and improvements, net of accumulated
depreciation of $10,351,000 and $9,676,000
respectively................................................................... $48,374,000 $48,898,000
Tenant receivables, net of allowance for
doubtful accounts of $4,000 and $27,000
respectively................................................................... 225,000 207,000
Prepaid expenses and other assets................................................. 92,000 291,000
Deferred rents receivable......................................................... 4,043,000 3,820,000
Deferred costs, net of accumulated amortization
of $1,044,000 and $957,000 respectively......................................... 1,325,000 1,366,000
Cash and cash equivalents ........................................................ 9,302,000 8,423,000
Other restricted cash and cash equivalents ....................................... 3,598,000 3,262,000
Restricted cash collateral........................................................ 972,000 1,447,000
------------ ----------
TOTAL ASSETS................................................................... $68,030,000 $67,714,000
=========== ===========
<CAPTION>
LIABILITIES AND PARTNERS' CAPITAL
<S> <C> <C>
Liabilities:
Permanent Loan.................................................................... 36,800,000 36,800,000
Accrued interest payable.......................................................... 17,021,000 16,378,000
Prepaid tenant rent............................................................... 280,000 225,000
Accounts payable and accrued liabilities.......................................... 739,000 491,000
Due to affiliate.................................................................. 63,000 56,000
Security deposits................................................................. 531,000 533,000
----------- -----------
TOTAL LIABILITIES.............................................................. 55,434,000 54,483,000
------------ -----------
Commitments
Minority interest................................................................. 1,125,000 1,145,000
------------ -------------
Partners' capital (deficit):
General Partner................................................................... (4,061,000) (4,000,000)
Limited Partners - 270 units issued and outstanding............................... 15,531,000 16,086,000
----------- -----------
TOTAL PARTNERS' CAPITAL........................................................ 11,470,000 12,086,000
----------- -----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL........................................ $68,030,000 $67,714,000
=========== ===========
</TABLE>
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP FORM 10-QSB MARCH 31, 1997
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
Limited General
Partners Partner Total
------------ ---------- -----------
<S> <C> <C> <C>
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
=========== =========== ==========
Balance, December 31, 1996 ...................... $16,086,000 $(4,000,000) $12,086,000
Net loss......................................... (555,000) (62,000) (616,000)
------------ ---------- ---------
Balance, March 31, 1997.......................... 15,531,000 (4,061,000) 11,470,000
=========== =========== ===========
</TABLE>
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
-------- ------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)........................................................... $ (616,000) $(458,000)
Minority interest in (loss).......................................... (81,000) (72,000)
Adjustments to reconcile net (loss) to net cash provided by operating
activities:
Depreciation and amortization..................................... 762,000 611,000
Bad debt expense (recovery) ...................................... (4,000) (149,000)
Changes in operating assets and liabilities:
(Increase) in tenant and other receivables...................... (14,000) (902,000)
Decrease in insurance proceeds receivables...................... - 554,000
Decrease in prepaid expenses and other assets................... 99,000 41,000
(Increase) in deferred rents receivable......................... (223,000) (67,000)
(Decrease) increase in accounts payable,
accrued liabilities and security deposits................... 246,000 (1,117,000)
(Decrease) increase in due to affiliates........................ 7,000 (33,000)
(Decrease) increase in prepaid tenant rent...................... 56,000 (71,000)
Increase in accrued interest payable............................ 643,000 774,000
--------- ---------
Net cash provided by operating activities............................ 875,000 915,000
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in restrictive cash ........................................ (336,000) (553,000)
Expenditures for building and improvements........................... (150,000) (940,000)
Net cash used in investing activities................................ (532,000) (1,529,000)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net withdrawals from mortgage escrow................................. 475,000 1,833,000
Minority interest capital contributions received..................... 61,000 263,000
----------- -----------
Net cash provided by financing activities............................ 536,000 2,096,000
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS............................... 879,000 1,482,000
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD....................... 8,423,000 6,708,000
---------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD............................. $ 9,302,000 $ 8,190,000
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest............................................... $ 506,657 $ 300,000
========= ===========
</TABLE>
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1997
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 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. 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 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.
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.
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1997
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
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 $142,000 were
earned by affiliates during the period ending March 31, 1997.
The Operating Partnerships owed affiliates of the General Partner
$63,000 at March 31, 1997 as reimbursement for various costs incurred
in the ordinary course of operations.
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1997
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"). 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 and 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 three months ended
March 31, 1997. The Registrant used cash reserves to satisfy
administrative and other expenses during the three months ended March
31, 1997.
The Registrant's and the Operating Partnership's level of liquidity, on
a consolidated basis, increased $879,000 during the three months ended
March 31, 1997, as compared to December 31, 1996. This increase was due
to increases of $536,000 in cash provided by financing activities and
$875,000 in cash provided by operating activities which were partially
offset by $532,000 of cash used in investing activities. Cash provided
by financing activities consisted of $61,000 of minority interest
capital contributions and $475,000 from withdrawals of mortgage
escrows. Cash used by investing activities consisted of a $336,000
increase in restricted cash, $150,000 of additions to building and
improvements and $46,000 of deferred leasing commissions paid.
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 March 31, 1997, the balance in this account was
$972,000 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 damage. The insurance carrier
agreed to pay Miami Tower approximately $8,942,000. Under the terms of
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, 1997, was approximately $2,552,000 and is included in
restricted cash and cash equivalents. The repair and maintenance work
associated with the damage and the structural buildout is complete.
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1997
Item 2. Management's Discussion and Analysis or Plan of Operations
Liquidity and Capital Resources (Continued)
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 $17,000,000 of accrued interest.
Minimum interest payments of 7% per annum are 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 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 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 of $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 forementioned 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.
In addition to the events described, on March 12, 1997, WFA, the
Operating Partnerships and the FDIC (which has assumed the interests of
the RTC) entered into an agreement (the "Loan Acquisition Agreement")
pursuant to which WFA agreed to acquire the Permanent Loan. Under the
proposed terms of the Loan Acquisition Agreement, WFA agreed to
purchase the Permanent Loan at a discount from the FDIC. In addition,
WFA made a deposit payment to the FDIC of $500,000. It is expected that
the acquisition of the Permanent Loan will occur, if at all, on or
prior to May 30, 1997. If this transaction is ultimately consummated,
it is expected that the current technical default under the Permanent
Loan will be excused. Under the terms of the Loan Acquisition
Agreement, the deposit was applied as a payment and reduction of
accrued interest at March 31, 1997. Accordingly, the Partnership has
reimbursed WFA for the full amount of the deposit in April 1997.
Results of Operations
Operating results, before minority interest, declined by $167,000 for
the three months ended March 31, 1997, as compared to 1996 as increased
revenues were more than offset by increased expenses.
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10-QSB MARCH 31, 1997
Item 2. Management's Discussion and Analysis or Plan of Operations
Liquidity and Capital Resources (Continued)
Revenues improved by $309,000 for the three months ended March 31,
1997, as compared to 1996, due to increases in rental income of
$358,000 and interest income of 39,000 which was partially offset by a
decrease in other income of $88,000. Rental revenues increased due to
an increase in rental rates with occupancy remaining constant at
approximately 85%. Other income declined due to a decrease in bad debt
recovery income relating to the Great Western lease, which was offset
by increases in tenant sundry billings.
The following table sets forth the occupancy rates for the three months
ended March 31, 1996 and 1997 and the associated gross rental per
square foot amount (based on generally accepted accounting principals)
at the Property.
<TABLE>
<CAPTION>
Average Annual Total Gross
Date Percentage Occupancy Rate Rental per SF of Occupied Space
<S> <C> <C>
March 31, 1996 85% $20.04
March 31, 1997 85% $22.92
</TABLE>
Expenses for the three months ended March 31, 1997, as compared to
1996, increased by $476,000 primarily due to increases in repairs and
maintenance ($44,000), payroll ($17,000), security ($20,000), lease
costs and rental expense ($42,000), real estate taxes ($74,000),
cleaning ($67,000), interest expense ($76,000), and depreciation and
amortization (151,000). Repairs and maintenance increased due to higher
contract prices and additional upkeep required in the current year
comparative period. Lease costs and rental expense increased due to CPI
increases associated with the various leases (ground rent, lighting and
air rights) that are in place. Real estate taxes increased due to a
1995 tax settlement finalized and paid in 1997. Cleaning expenses
increased due to contract price increases as well as additional space
cleaned. The increase in interest expense was attributable to the
impact of interest compounding on the mortgage note. Depreciation
expense increased due to an increase in tenant improvements required
under newly executed leases. Amortization expense increased due to an
increase in deferred costs associated with new leasing activities.
Management fees decreased due to the receipt of the Great Western
receivable in 1996 offset by increased rent collections.
<PAGE>
WINTHROP MIAMI ASSOCIATES 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 8K:
No Reports of Form 8-K were filed during the three months ended March
31, 1997.
<PAGE>
WINTHROP MIAMI ASSOCIATES 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 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: May 15, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from audited
financial statements for the three month period ending March 31, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000883424
<NAME> WINTHROP MIAMI ASSOCIATES L.P.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 9,302,000
<SECURITIES> 0
<RECEIVABLES> 4,272,000
<ALLOWANCES> (4,000)
<INVENTORY> 0
<CURRENT-ASSETS> 14,289,000
<PP&E> 58,725,000
<DEPRECIATION> (10,351,000)
<TOTAL-ASSETS> 68,030,000
<CURRENT-LIABILITIES> 1,613,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 11,470,000
<TOTAL-LIABILITY-AND-EQUITY> 68,030,000
<SALES> 2,927,000
<TOTAL-REVENUES> 3,060,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,526,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,150,000
<INCOME-PRETAX> (2,953,622)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,953,622)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,953,622)
<EPS-PRIMARY> (2,055)
<EPS-DILUTED> (2,055)
</TABLE>
