<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, 1998
---------------
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 Identification No.)
incorporation or organization)
Five Cambridge Center, Cambridge, MA 02142-1493
------------------------------------- ------------------------------
(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
------- ------
-1-
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
PART I - FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
Item 1. Consolidated Financial Statements
<TABLE>
<CAPTION>
1998 1997
------------ ----------
<S> <C> <C>
REVENUES:
Rental income ............................................ $ 3,015,000 $ 2,850,000
Operating expense and tax escalation
reimbursements ......................................... 140,000 77,000
Interest income........................................... 89,000 133,000
------------ -----------
Total Revenues........................................ 3,244,000 3,060,000
------------ -----------
EXPENSES:
Repairs and maintenance................................... 199,000 187,000
Utilities................................................. 312,000 277,000
Payroll................................................... 148,000 147,000
Security ................................................. 97,000 94,000
Lease costs and rental expense............................ 222,000 248,000
Insurance................................................. 41,000 36,000
Real estate and other taxes............................... 451,000 452,000
Management fees .......................................... 150,000 142,000
General and administrative................................ 71,000 108,000
Advertising............................................... 34,000 24,000
Cleaning.................................................. 138,000 130,000
Interest expense.......................................... 1,215,000 1,150,000
Depreciation and amortization............................. 719,000 762,000
------------ -----------
Total Expenses........................................ 3,797,000 3,757,000
------------ -----------
Loss before minority interest................................ (553,000) (697,000)
Minority interest in loss.................................... 67,000 81,000
------------ -----------
Net loss..................................................... $ (486,000) $ (616,000)
============ ===========
NET LOSS ALLOCATED TO
GENERAL PARTNER........................................... $ (49,000) $ (61,000)
============ ===========
NET LOSS ALLOCATED TO
INVESTOR LIMITED PARTNERS................................. $ (437,000) $ (555,000)
============ ===========
Net Loss Per Investor
Limited Partner Unit...................................... $ (1,618.00) $ (2,055.00)
============ ===========
Number of Investor Limited Partner
Units Outstanding............................................ 270 270
============ ===========
</TABLE>
-2-
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND DECEMBER 31, 1997
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS 1998 1997
- ------ ---- ----
(Unaudited) (Audited)
<S> <C> <C>
Building and improvements, net of accumulated
depreciation of $12,155,000 and $12,240,000 respectively......... $ 47,609,000 $ 47,675,000
Tenant receivables, net of allowance for
doubtful accounts of $20,000 and $20,000
respectively.................................................... 422,000 327,000
Prepaid expenses and other assets.................................. 213,000 263,000
Deferred rents receivable.......................................... 4,275,000 4,254,000
Deferred costs, net of accumulated amortization
of $628,000 and $1,269,000 respectively.......................... 1,468,000 1,462,000
Cash and cash equivalents ......................................... 1,927,000 2,708,000
Restricted cash and cash equivalents .............................. 5,974,000 5,671,000
------------- ------------
TOTAL ASSETS.................................................... $ 61,888,000 $ 62,360,000
============= ============
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Liabilities:
Permanent Loan..................................................... $ 51,158,000 $ 51,158,000
Prepaid tenant rent................................................ 251,000 264,000
Accounts payable and accrued liabilities........................... 924,000 877,000
Security deposits.................................................. 345,000 298,000
------------- ------------
TOTAL LIABILITIES............................................... 52,678,000 52,597,000
------------- ------------
Commitments
Minority interest.................................................. 890,000 957,000
------------- ------------
Partners' capital (deficit):
General Partner.................................................... (4,131,000) (4,082,000)
Limited Partners - 270 units issued and outstanding................ 12,451,000 12,888,000
------------- ------------
TOTAL PARTNERS' CAPITAL......................................... 8,320,000 8,806,000
------------- ------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL......................... $ 61,888,000 $ 62,360,000
============= ============
</TABLE>
-3-
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Limited General
Partners Partner Total
-------- ------- -----
<S> <C> <C> <C>
Balance, December 31, 1997....................... $ 12,888,000 $ (4,082,000) $ 8,806,000
Net loss......................................... (437,000) (49,000) (486,000)
------------ ------------ -----------
Balance, March 31, 1998 ......................... $ 12,451,000 $ (4,131,000) $ 8,320,000
============ ============ ===========
Balance, December 31, 1996 ...................... $ 16,086,000 $ (4,000,000) $12,086,000
Net loss......................................... (555,000) (61,000) (616,000)
------------ ------------ -----------
Balance, March 31, 1997.......................... $ 15,531,000 $ (4,061,000) $11,470,000
============ ============ ===========
</TABLE>
-4-
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)........................................................... $ (486,000) $ (616,000)
Minority interest in (loss).......................................... (67,000) (81,000)
Adjustments to reconcile net (loss) to net cash provided by operating
activities:
Depreciation and amortization..................................... 719,000 762,000
Bad debt expense (recovery) ...................................... - (4,000)
Changes in operating assets and liabilities:
Increase in tenant and other receivables........................ (95,000) (14,000)
Decrease in prepaid expenses and other assets................... 50,000 99,000
Increase in deferred rents receivable........................... (21,000) (223,000)
Increase in accounts payable accrued liabilities
and security deposits....................................... 94,000 246,000
Increase in due to affiliates................................... - 7,000
(Decrease) increase in prepaid tenant rent...................... (13,000) 56,000
Increase in accrued interest payable............................ - 643,000
----------- -----------
Net cash provided by operating activities............................ 181,000 875,000
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in restrictive cash ........................................ (303,000) (336,000)
Expenditures for building and improvements........................... (573,000) (150,000)
Expenditures for deferred costs...................................... (85,000) (46,000)
----------- -----------
Net cash used in investing activities................................ (962,000) (532,000)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net withdrawals from mortgage escrow................................. - 475,000
Minority interest capital contributions received..................... - 61,000
----------- ----------
Net cash provided by financing activities............................ - 536,000
----------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS..................................................... (781,000) 879,000
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD.......................... 2,708,000 8,423,000
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD................................ $ 1,927,000 $ 9,302,000
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest............................................... $ 1,215,000 $ 507,000
=========== ===========
RETIREMENT OF FULLY DEPRECIATED ASSETS.................................. $ 1,490,000 $ -
=========== ===========
</TABLE>
-5-
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
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, 1997.
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. The balance sheet at
December 31, 1997 was derived from audited financial statements at
such date.
The results of operations for the three months ended March 31,1998
and 1997 are not necessarily indicative of the results to be expected
for the full year.
2. Related Party Transactions
Management fees are paid to an affiliate of the General Partner and
are based on 5% of cash receipts. Fees of $150,000 were earned by
affiliates during the period ending March 31, 1998.
The Operating Partnerships owed affiliates of the General Partner $0
and $63,000 at March 31, 1998 and March 31, 1997, respectively as
reimbursement for various costs incurred in the ordinary course of
operations.
3. Sale of the Permanent Loan
On May 28, 1997, AP Nations LLC, a related party, acquired the
outstanding balance of the permanent loan together with contractual
interest due of $14,357,938 from the FDIC for $47,000,000. The
accrued interest was capitalized and consolidated with the principal
balance into a single note (the "Consolidated Note"). The
Consolidated Note was then restructed into two separate notes (The
"First Note" and the "Subordinated Note"). The First Note of
$40,000,000, which is held by Travelers Life Insurance Company, bears
interest at Libor plus 180 basis points (7.47% at March 31, 1998) and
is collateralized by the office tower and retail space. The First
Note was assigned to Travelers Life Insurance Company on May 30,
1997.
The Subordinated Note in the amount of $11,157,938, which is held by
AP Nations LLC, bears interest at 9.5% per annum plus the outstanding
principal balance on the First Note at 9.5% per annum less the amount
of interest due and payable with respect to the First Note. The
Subordinate Note is collateralized by the general partnership
interest in the operating partnerships.
-6-
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------
In connection with the new loan agreement, an interest rate
protection agreement was entered into to provide the operating
partnership with funds should the First Note Interest exceed 9.5% per
annum.
The First Note and Subordinate Note combined require interest only
payments until July 1999 when principal payments of $48,660 per month
begin. The stated maturity date of the Loans is May 30, 2001.
As a result of the restructing, the operating Partnerships recognized
an extraordinary gain of approximately $1,845,000 for financial
reporting purposes.
-7-
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
- -------------------------------------------------------------------------------
Item 2. Management's Discussion and Analysis or Plan of Operations
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. No distributions were
received by the Registrant from the Operating Partnerships for the
three months ended March 31, 1998 and March 31, 1997. The Registrant
used cash reserves to satisfy administrative and other expenses
during the three months ended March 31, 1998.
As of March 31, 1998, the Registrant had cash and cash equivalents of
$1,927,000. The Registrant's and the Operating Partnership's level of
liquidity, on a consolidated basis, decreased $781,000 during the
three months ended March 31, 1998, as compared to December 31, 1997.
This decrease was due to $962,000 of cash used in investing
activities, which were partially offset by $181,000 in cash provided
by operating activities. Cash used by investing activities consisted
of a $303,000 increase in restricted cash, $573,000 of additions to
building and improvements and $85,000 of deferred leasing commissions
paid.
On May 28, 1997, AP Nations LLC, a related party, acquired the
outstanding balance of the permanent loan together with contractual
interest due of $14,357,938 from the FDIC for $47,000,000. The
accrued interest was capitalized and consolidated with the principal
balance into a single note (the "Consolidated Note"). The
Consolidated Note was then restructed into two separate notes (The
"First Note" and the "Subordinated Note"). The First Note of
$40,000,000, which is held by Travelers Life Insurance Company, bears
interest at Libor plus 180 basis points (7.47% at March 31, 1998) and
is collateralized by the office tower and retail space. The First
Note was assigned to Travelers Life Insurance Company on May 30,
1997.
The Subordinated Note in the amount of $11,157,938, which is held by
AP Nations LLC, bears interest at 9.5% per annum plus the outstanding
principal balance on the First Note at 9.5% per annum less the amount
of interest due and payable with respect to the First Note. The
Subordinate Note is collateralized by the general partnership
interest in the operating partnerships.
-8-
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
- -------------------------------------------------------------------------------
Item 2. Management's Discussion and Analysis or Plan of Operations (Continued)
In connection with the new loan agreement, an interest rate
protection agreement was entered into to provide the operating
partnership with funds should the First Note Interest exceed 9.5% per
annum.
The First Note and Subordinate Note combined require interest only
payments until July 1999 when principal payments of $48,660 per month
begin. The stated maturity date of the Loans is May 30, 2001.
As a result of the restructing, the operating Partnerships recognized
an extraordinary gain of approximately $1,845,000 for financial
reporting purposes.
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 March 31,
1998 were $4,715,000, $748,000 and $345,000 respectively. Restricted
cash also includes a utility deposit of $166,000.
Results of Operations
The Loss before minority interest of the Partnership decreased by
$144,000 for the three months ended March 31, 1998, as compared to
the three months ended March 31, 1997 as a result of a $184,000
increase in revenues which was partially offset by a $40,000 increase
in expenses.
Revenues increased for the three months ended March 31, 1998 as
compared to 1997, due to increases in rental income of $165,000 and
operating expense reimbursements of $63,000, which was partially
offset by decreases in interest income of $44,000. Rental revenues
increased due to an increase in rental rates from $22.92 per square
foot to $23.15 per square foot and an increase in occupancy from 85%
to 89%.
Expenses for the three months ended March 31, 1998, as compared to
1997, increased due to increases in interest expense ($65,000), utilities
($35,000), advertising ($10,000) and repairs and maintenance ($12,000).
Interest expense increased for financial reporting purposes as a result of the
modification of the Permanent Loan. Prior to the modification, interest
expense was reported using the effective interest method which resulted in a
level yield interest rate of 8.64%. The accrual interest rate under the
restated and amended loan is 9.5%. Utilities increased in 1998 due to
occupancy and the decrease in tenant overtime reimbursements. Advertising
increased in an attempt to lease the balance of the building. Repairs and
maintenance increased due to higher contract prices. These increases were
partially offset by decreases in depreciation and amortization ($43,000),
general and administrative ($37,000), and lease costs and rental expense
($26,000). The decrease in
-9-
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
- -------------------------------------------------------------------------------
Item 2. Management's Discussion and Analysis or Plan of Operations (Continued)
depreciation and amortization was attributable to building components
being fully depreciated in prior year. General and administrative
decreased because of a non-recurring legal expense in the prior year.
Lease costs and rental expense decreased due to the catch up in the
prior period of CPI increases associated with the various leases
(ground rent, lighting and air rights) that are in place.
-10-
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
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, 1998.
-11-
<PAGE>
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
- ------------------------------------------------------------------------------
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 14, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from unaudited
financial statements for the three month period ending March 31, 1998 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 7,901,000
<SECURITIES> 0
<RECEIVABLES> 4,717,000
<ALLOWANCES> (20,000)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 59,764,000
<DEPRECIATION> (12,155,000)
<TOTAL-ASSETS> 61,888,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 8,320,000
<TOTAL-LIABILITY-AND-EQUITY> 61,888,000
<SALES> 3,155,000
<TOTAL-REVENUES> 3,155,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,444,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,215,000
<INCOME-PRETAX> (486,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (486,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (486,000)
<EPS-PRIMARY> (1,618.52)
<EPS-DILUTED> (1,618.52)
</TABLE>
