<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 September 30, 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 (IRS Employer ID No.)
incorporation or organization)
Five Cambridge Center, Cambridge, MA 02142
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (617) 234-3000
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>
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
<TABLE>
<CAPTION>
In Thousands, Except Unit Data) For the Three Month Period For the Nine Month Period
Ended September 30, 1997 Ended September 30, 1997
1997 1996 1997 1996
----------- ----------- ----------- -----------
REVENUES:
<S> <C> <C> <C> <C>
Rental income ......................... $ 2,899 $ 2,541 $ 8,594 $ 7,564
Operating expense and tax escalation
reimbursements ...................... 136 338 358 541
Interest Income ....................... 100 125 371 389
----------- ----------- ----------- -----------
Total Revenues .................... 3,135 3,004 9,323 8,494
----------- ----------- ----------- -----------
EXPENSES:
Repairs and maintenance ............... 153 176 504 502
Utilities ............................. 286 353 825 862
Payroll ............................... 150 123 443 396
Security .............................. 90 117 288 292
Lease costs and rental expense ........ 213 221 675 632
Insurance ............................. 38 37 110 112
Real estate and other taxes ........... 415 366 1,216 1,102
Management fees ....................... 142 133 433 436
General and administrative ............ 51 78 236 317
Advertising ........................... 28 40 90 112
Cleaning .............................. 136 146 402 388
Interest expense ...................... 1,215 1,119 3,605 3,317
Depreciation and amortization ......... 736 637 2,156 1,908
----------- ----------- ----------- -----------
Total Expenses .................... 3,653 3,546 10,983 10,376
----------- ----------- ----------- -----------
Net Operating Loss ....................... (518) (542) (1,660) (1,882)
Gain due to refinancing .................. -- -- 1,895 --
----------- ----------- ----------- -----------
Net Income (Loss) before minority interest (518) (542) 235 (1,882)
Minority interest in (Income) loss ....... 65 71 (30) 249
----------- ----------- ----------- -----------
Net Income (loss) ........................ $ (453) $ (471) $ 205 $ (1,633)
=========== =========== =========== ===========
NET INCOME (LOSS) ALLOCATED TO
GENERAL PARTNER ....................... $ (45) $ (47) $ 21 $ (163)
=========== =========== =========== ===========
NET INCOME (LOSS) ALLOCATED TO
INVESTOR LIMITED PARTNERS ............. $ (408) $ (424) $ 184 $ (1,470)
=========== =========== =========== ===========
Net Income (Loss) Per Investor
Limited Partner Unit .................. $ (1,512.44) $ (1,570.00) $ 684.66 $ (5,444.44)
=========== =========== =========== ===========
Number of Investor Limited Partner
Units Outstanding ........................ 270 270 270 270
=========== =========== =========== ===========
</TABLE>
<PAGE>
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
UNAUDITED AUDITED
1997 1996
---------- ----------
<S> <C> <C>
Building and improvements, net of accumulated
depreciation of $11,582 and $9,676 respectively ....... $ 47,568 $ 48,898
Tenant receivables, net of allowance for
doubtful accounts of $20 and $27 respectively ........ 131 207
Prepaid expenses and other assets ....................... 109 291
Deferred rents receivable ............................... 4,310 3,820
Deferred costs, net of accumulated amortization
of $1,207 and $957 respectively ....................... 1,391 1,366
Cash and cash equivalents ............................... 2,704 8,423
Other restricted cash and cash equivalents .............. 7,540 3,262
Restricted cash collateral .............................. -- 1,447
---------- ----------
TOTAL ASSETS ......................................... $ 63,753 $ 67,714
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Permanent Loan .......................................... $ 51,158 $ 36,800
Accrued interest payable ................................ -- 16,378
Prepaid tenant rent ..................................... 334 225
Accounts payable and accrued liabilities ................ 1,299 491
Due to affiliate ........................................ -- 56
Security deposits ....................................... 336 533
---------- ----------
TOTAL LIABILITIES .................................... $ 53,127 $ 54,483
---------- ----------
Commitments
Minority interest ....................................... 1,062 1,145
---------- ----------
Partners' capital (deficit):
General Partner ......................................... (4,006) (4,000)
Limited Partners - 270 units issued and outstanding ..... 13,570 16,086
---------- ----------
TOTAL PARTNERS' CAPITAL .............................. 9,564 12,086
---------- ----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL .............. $ 63,753 $ 67,714
========== ==========
</TABLE>
<PAGE>
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(IN THOUSANDS)
Limited General
Partners Partner Total
Balance, December 31, 1995 $ 18,744 $ (3,704) $ 15,040
Net loss .................. (1,470) (163) (1,633)
-------- -------- --------
Balance, September 30, 1996 $ 17,274 $ (3,867) $ 13,407
======== ======== ========
Balance, December 31, 1996 $ 16,086 $ (4,000) $ 12,086
Distribution Paid ......... (2,700) (27) (2,727)
Net Income ................ 184 21 205
-------- -------- --------
Balance, September 30, 1997 $ 13,570 $ (4,006) $ 9,564
======== ======== ========
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss) ................................................ $ 205 $(1,162)
Minority interest in Income (loss) ............................... 30 (178)
Adjustments to reconcile net Income (loss) to net cash provided by
operating activities:
Depreciation and amortization ................................. 2,156 1,271
Bad debt write-offs ........................................... (7) (117)
Changes in operating assets and liabilities:
Decrease in tenant and other receivables ..................... 83 889
Decrease in insurance proceeds receivables ................... -- 554
Decrease in prepaid expenses and other assets ................ 182 145
Increase in deferred rents receivable ........................ (490) (133)
(Decrease) increase in accounts payable,
accrued liabilities and security deposits ............... 611 (2,262)
Decrease in due to affiliates ................................ (56) (26)
(Decrease) increase in prepaid tenant rent ................... 109 (154)
(Decrease) increase in accrued interest payable .............. (2,020) 1,288
------- -------
Net cash provided by operating activities ........................ 803 115
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in restricted cash and cash equivalents ................. (4,278) (806)
Expenditures for building and improvements ....................... (576) (431)
Deferred costs ................................................... (275) (87)
------- -------
Net cash used in investing activities ............................ (5,129) (1,324)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net withdrawals from mortgage escrow ............................. 1,447 2,202
Distributions paid to minority partner ........................... (174) --
Distributions paid to partners ................................... (2,727) --
Minority interest capital contributions received ................. 61 318
------- -------
Net cash provided by financing activities ........................ (1,393) 2,520
------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .................. (5,719) 1,311
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ................... 8,423 6,708
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD ......................... $ 2,704 $ 8,019
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest ........................................... $ 3,730 $ 910
======= =======
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Gain from Refinancing (see note 5) ............................... $ 1,895 $ --
======= =======
</TABLE>
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 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. Certain amounts have
been reclassified to conform to the September 30, 1997 presentation.
The balance sheet at December 31, 1996 was derived from audited
financial statements at such date.
The results of operations for the nine months ended September 30, 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 SEPTEMBER 30, 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 $519,000 were
earned by affiliates during the period ending September 30, 1997. For
the period ending September 30, 1996 fees of $597,000 were earned by
affiliates.
The Operating Partnerships owed affiliates of the General Partner $0
and $48,000 at September 30, 1997 and September 30, 1996, respectively
as reimbursement for various costs incurred in the ordinary course of
operations.
5. Sale of the Permanent Loan
On May 30, 1997, Travelers Insurance Company and an affiliate of the
General Partner purchased the existing mortgage loan encumbering the
Property (the "Loan"). The total outstanding debt balance of $51.1
million payable by the Partnership represents the prior principal
balance of $36,800,000 plus accrued interest payable of $14,358,000. In
connection with the sale of the Loan, the Operating Partnerships
recognized a gain of $1,895,000 for financial reporting purposes,
representing amounts previously recorded under generally accepted
accounting principles using the effective interest method.
The Loan bears interest at 9.5% per annum and requires interest only
payments until July 1999 when principal payments of $48,660 per month
become due. The loan is scheduled to mature on May 30, 2001 at which
time a balloon payment of $50,039,000 will be due.
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 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.
The Registrant's primary source of revenue is distributions from the
cash flow of the Operating Partnerships. In June 1997 the Operating
Partnerships made a distribution of $1,227,000 to the Registrant and
$174,000 to the minority partner. On July 3, 1997 the Registrant
distributed $10,000 per investment unit or $2,700,000 which represented
a portion of the funds previously held by the Operating Partnerships as
reserves. The Registrant used cash reserves to satisfy administrative
and other expenses during the nine months ended September 30, 1997.
The Registrant's level of liquidity, on a consolidated basis, decreased
$5,719,000 during the nine months ended September 30, 1997, as compared
to December 31, 1996. This decrease was due to $5,129,000 of cash used
in investing activities and $1,393,000 in cash used by financing
activities which were partially offset by $803,000 in cash provided by
operating activities. Cash used by investing activities consisted of a
$4,278,000 increase in restricted cash, $576,000 of additions to
building and improvements and $275,000 of deferred leasing commissions
paid. Cash provided by financing activities consisted of $61,000 of
minority interest capital contributions and $1,447,000 from withdrawals
of mortgage escrows offset by $174,000 and $2,727,000 in distributions
paid to the minority partner and the general and limited partners.
On May 30, 1997, Travelers Insurance Company and an affiliate of the
General Partner purchased the existing mortgage loan encumbering the
Property (the "Loan"). The total outstanding debt balance of $51.1
million payable by the Partnership represents the prior principal
balance of $36,800,000 plus accrued interest payable of $14,358,000.
In connection with the sale of the Loan, the Operating Partnerships
recognized a gain of $1,895,000 for financial reporting purposes,
representing amounts previously recorded under generally accepted
accounting principles using the effective interest method.
The Loan bears interest at 9.5% per annum and requires interest only
payments until July 1999 when principle payments of $48,660 per month
become due. The loan is scheduled to mature on May 30, 2001 at which
time a balloon payment of $50,039,000 will be due.
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 1997
Item 2. Management's Discussion and Analysis or Plan of Operations
Liquidity and Capital Resources (continued)
At the time of closing Travelers required the Operating Partnership to
establish escrow accounts for Capital and Leasing Improvements, Real
Estate Taxes and Security Deposits. The balances at September 30, 1997
were $5,667,000, $1,371,000 and $336,000 respectively.
Results of Operations
The Net Operating Loss of the Partnership decreased by $222,000 for the
nine months ended September 30, 1997, as compared to the nine months
ended September 30, 1996 as a result of an $829,000 increase in
revenues which was partially offset by a $607,000 increase in expenses.
Revenues increased for the nine months ended September 30, 1997, as
compared to 1996, due to increases in rental income of $1,030,000 which
was partially offset by decreases in other income of $183,000 and
interest income of $18,000. Rental revenues increased due to an
increase in rental rates from $20.47 per square foot to $23.17 per
square foot and an increase in occupancy from 83% to 85%. Other income
decreased in 1997 compared to 1996 due to non-recurring payment of the
Great Western settlement of $259,000 received in September 1996.
Expenses for the nine months ended September 30, 1997, as compared to
1996, increased due to increases in interest expense ($288,000),
depreciation and amortization ($248,000), real estate taxes ($114,000),
lease costs and rental expense ($43,000), payroll ($47,000), and
cleaning ($14,000). The increase in interest expense was attributable
to the impact of interest compounding on the mortgage note prior to the
acquisition of the Loan on May 30,1997. Depreciation and amortization
increased due to an increase in tenant improvements and deferred costs
associated with newly executed leases. Real estate taxes increased in
1997 due to assessment and rate increases along with a 1995 unfavorable
tax settlement. These were partially offset by a 1996 tax refund. 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. Payroll and cleaning increases are higher due to slightly
increased occupancy along with annual price increases. These increases
were partially offset by decreases in general and administrative
expense ($81,000), utilities ($37,000) and advertising ($22,000).
General and administrative expenses decreased due to Great Western
legal expenses incurred during the settlement of 1996. Utility expenses
decreased due to increases in tenant overtime reimbursements.
Advertising was lower due to signage costs incurred 1996.
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 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
September 30, 1997.
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
FORM 10 - QSB SEPTEMBER 30, 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: November 12, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial
information extracted from audited financial
statements for the nine month period ending
September 30, 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 2,704,000
<SECURITIES> 0
<RECEIVABLES> 4,461,000
<ALLOWANCES> (20,000)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 59,150,000
<DEPRECIATION> (11,582,000)
<TOTAL-ASSETS> 63,753,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 9,564,000
<TOTAL-LIABILITY-AND-EQUITY> 63,753,000
<SALES> 8,952,000
<TOTAL-REVENUES> 9,323,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,348,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,605,000
<INCOME-PRETAX> 205,000
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,690,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 1,895,000
<CHANGES> 0
<NET-INCOME> 205,000
<EPS-PRIMARY> 685
<EPS-DILUTED> 685
</TABLE>
