-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LKbCEDjsr2ipam8GO2tQFktpErJLZ+3tiRpGblU/mAsiGeXQtoll/cbfenkWjrJv HxfSQlU5viEKQffM0Q2gWg== 0000889812-97-002411.txt : 19971117 0000889812-97-002411.hdr.sgml : 19971117 ACCESSION NUMBER: 0000889812-97-002411 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WINTHROP GROWTH INVESTORS I LP CENTRAL INDEX KEY: 0000722565 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 042797919 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-13389 FILM NUMBER: 97718358 BUSINESS ADDRESS: STREET 1: ONE INTERNATIONAL PL STREET 2: C/O FIRST WINTHROP CORP CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6173308600 MAIL ADDRESS: STREET 1: C/O FIRST WINTHROP CORP STREET 2: ONE INTERNATIONAL PLACE CITY: BOSTON STATE: MA ZIP: 02110 FORMER COMPANY: FORMER CONFORMED NAME: WINTHROP INCOME PROPERTIES I LTD PARTNERSHP DATE OF NAME CHANGE: 19840124 10QSB 1 QUARTERLY REPORT U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) X QUARTERLY REPORT UNDER 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 2-84760 Winthrop Growth Investors 1 Limited Partnership (Exact name of small business issuer as specified in its charter) Massachusetts 04-2839837 (State or other jurisdiction of I.R.S. Employer Identification No.) incorporation or organization) Five Cambridge Center, Boston, 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 the 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 14 WINTHROP GROWTH INVESTORS 1 LIMITED PARTNERSHIP FORM 10-QSB SEPTEMBER 30, 1997 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. Consolidated Balance Sheets (Unaudited) (In Thousands, Except Unit Data)
September 30, December 31, Assets 1997 1996 ------------ ------------ Investment in Real Estate Land $ 4,015 $ 4,015 Buildings and improvements, net of accumulated depreciation of $21,213 (1997) and $19,942 (1996) 17,952 18,598 ------------ ------------ 21,967 22,613 Other assets: Cash and cash equivalents 1,276 1,348 Deferred costs, net of accumulated amortization of $1,217 (1997) and $1,135 (1996) 1,171 1,253 Replacement reserves and escrow accounts 1,780 1,459 Other assets 424 453 ------------ ------------ Total assets $ 26,618 $ 27,126 ============ ============ Liabilities and Partners' Capital Mortgages payable $ 21,391 $ 21,563 Tenant security deposits 158 169 Accrued expenses and other liabilities 853 685 ------------ ------------ Total liabilities 22,402 22,417 ------------ ------------ Partners' capital (deficit): Limited partners' capital; 50,005 units authorized, 23,139 issued and outstanding 5,479 5,938 General partners' deficit (1,263) (1,229) ------------ ------------ Total partners' capital 4,216 4,709 ------------ ------------ Total liabilities and partners' capital $ 26,618 $ 27,126 ============ ============
See notes to consolidated financial statements. 2 of 14 WINTHROP GROWTH INVESTORS 1 LIMITED PARTNERSHIP FORM 10-QSB SEPTEMBER 30, 1997 Consolidated Statements of Operations (Unaudited) (In Thousands, Except Unit Data) For the Nine Months Ended September 30, September 30, 1997 1996 ------------- ------------- Income: Rental $ 4,993 $ 4,837 Interest on short-term investments 45 56 Other 232 221 ------------- ------------- Total income 5,270 5,114 ------------- ------------- Expenses: Leasing 163 173 General and administrative 376 494 Management fees 256 249 Utilities 520 511 Repairs and maintenance 942 1,031 Insurance 192 202 Taxes 465 481 Depreciation 1,271 1,178 Amortization 82 68 Interest expense 1,346 1,421 ------------- ------------- Total expenses 5,613 5,808 ------------- ------------- Net loss $ (343) $ (694) ============= ============= Net loss allocated to general partners $ (34) $ (69) ============= ============= Net loss allocated to limited partners $ (309) $ (625) ============= ============= Net loss per Limited Partnership Unit $ (13.35) $ (27.01) ============= ============= Distributions per Limited Partnership Uni $ 6.48 $ 6.48 ============= ============= See notes to consolidated financial statements. 3 of 14 WINTHROP GROWTH INVESTORS 1 LIMITED PARTNERSHIP FORM 10-QSB SEPTEMBER 30, 1997 Consolidated Statements of Operations (Unaudited) (In Thousands, Except Unit Data) For the Nine Months Ended September 30, September 30, 1997 1996 ------------- ------------- Income: Rental $ 1,645 $ 1,662 Interest on short-term investments 14 20 Other 85 74 ------------- ------------- Total Income 1,744 1,756 Expenses: Leasing 59 68 General and administrative 126 157 Management fees 85 85 Utilities 174 166 Repairs and maintenance 364 388 Insurance 65 69 Taxes 153 151 Depreciation 478 393 Amortization 22 23 Interest expense 447 463 ------------- ------------- Total expenses 1,973 1,963 ============= ============= Net loss $ (229) $ (207) ============= ============= Net loss allocated to general partners $ (23) $ (21) ============= ============= Net loss allocated to limited partners $ (206) $ (186) ============= ============= Net loss per Limited Partnership Unit $ (8.90) $ (8.04) ============= ============= Distributions per Limited Partnership Uni $ 2.16 $ 2.16 ============= ============= See notes to consolidated financial statements. 4 of 14 WINTHROP GROWTH INVESTORS 1 LIMITED PARTNERSHIP FORM 10 - QSB SEPTEMBER 30, 1997 Consolidated Statement of Partners' Capital (Deficit) (Unaudited) (In Thousands, Except Unit Data)
Units of Limited Limited General Partnership Partners' Partners' Total Interest Capital Deficit Capital ----------- --------- --------- ------- Balance - January 1, 1997 23,139 $ 5,938 $ (1,229) 4,709 Net loss - (309) (34) (343) Distributions - (150) (150) ----------- --------- --------- ------- Balance - September 30, 1997 23,139 $ 5,479 $ (1,263) 4,216 =========== ========= ========= ======== See notes to consolidated financial statements. 5 of 14 WINTHROP GROWTH INVESTORS 1 LIMITED PARTNERSHIP FORM 10-QSB SEPTEMBER 30, 1997 Consolidated Statements of Cash Flows (Unaudited) For the Nine Months Ended September 30, September 30, (In Thousands) 1997 1996 ------------- ------------- Cash Flows from Operating Activities: Net loss (343) $ (694) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 1,353 1,246 Changes in assets and liabilities: Decrease (increase) in other assets 29 (15) Increase in escrow accounts (507) (353) Decrease in accounts payable (163) (1) (Decrease) increase in tenant security deposits (11) 9 Increase in accrued expenses and other liabilities 331 243 ------------- ------------- Net cash provided by operating activities 689 435 Cash Flows from Investing Activities: Additions to buildings and improvements (625) (353) Deposits to reserve for replacements (181) (675) Withdrawals from reserve for replacements 367 - ------------- ------------- Net cash used in investing activities (439) (1,028) ------------- ------------- Cash Flows from Financing Activities: Satisfaction of mortgages payable - (10,198) Notes payable proceeds - 12,200 Principal payments on mortgage notes (172) (302) Distributions paid to partners (150) (150) Deferred financing costs paid - (346) ------------- ------------- Net cash (used in) provided by financing (322) 1,204 ------------- ------------- Net (decrease) increase in cash and cash equivalents (72) 611 ------------- ------------- Cash and cash equivalents, beginning of period 1,348 908 ------------- ------------- Cash and cash equivalents, end of period $ 1,276 $ 1,519 ============= ============= Supplemental Disclosure of Cash Flow Information - Cash paid for interest $ 1,346 $ 1,427 ============= ============= See notes to consolidated financial statements. 6 of 14 WINTHROP GROWTH INVESTORS 1 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 consolidated 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 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 and three months ended September 30, 1997 and 1996 are not necessarily indicative of the results to be expected for the full year. 2. Related Party Transactions Winthrop Management, an affiliate of the Managing General Partner, is entitled to receive 5% of gross receipts from all Partnership properties they manage. Winthrop Management earned $256,000 and $249,000 for the nine months ended September 30, 1997 and 1996, respectively. Winthrop Management received reimbursement of accountable administrative expenses amounting to approximately $71,000 and $79,000 during the nine months ended September 30, 1997 and 1996, respectively. 7 of 14 WINTHROP GROWTH INVESTORS 1 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 All of the Registrant's real estate properties are residential properties with apartments leased to tenants pursuant to leases with original terms ranging from three to fourteen months. The Registrant receives rental income from its apartments and is responsible for operating expenses, administrative expenses, capital improvements and debt service payments. The Registrant uses working capital reserves provided from any undistributed cash flow from operations and proceeds from mortgage refinancings as its primary sources of liquidity. For the long term, cash from operations is expected to remain the Registrant's primary source of liquidity, (i.e., until additional debt is refinanced or properties sold). The Registrant distributed $150,000 to the holders of limited partnership units ($6.48 per unit) during the nine months ended September 30, 1997. The level of liquidity based on cash and cash equivalents experienced a $72,000 decrease at September 30, 1997, as compared to December 31, 1996. The decrease was due to $689,000 of net cash provided by operating activities being offset by $439,000 of net cash used in investing activities and $322,000 of cash used in financing activities. Investing activities consisted of $625,000 of improvements to real estate and $181,000 of deposits to replacement reserves, which were offset by $367,000 of withdrawals from replacement reserves. Financing activities consisted of $172,000 of mortgage principal payments and $150,000 of distributions to limited partners. All other increases (decreases) in certain assets and liabilities are the result of the timing of receipt and payment of various operating activities. The Registrant continues to make capital improvements to the properties to enhance their competitiveness within their markets. The $625,000 that the Registrant spent on capital improvements during the nine months ended September 30, 1997 was funded from operating cash and replacement reserves held by mortgage lenders. The $625,000 of improvements included electrical improvements, kitchen cabinets and counter tops, and interior improvements at Stratford Place Apartments; appliance replacements, structural improvements and kitchen cabinets at Meadow Wood Apartments; and appliance replacements and common area improvements at Sunflower Apartments. The Registrant anticipates it will spend approximately $454,000 for capital improvements during the balance of 1997. The Registrant expects to spend approximately $162,000 for structural improvements (decks, stairways and breezeway), $25,000 for interior replacement (kitchen cabinet and counter tops) and $150,000 for exterior painting at Meadow Wood Apartments; approximately $63,000 for electrical work, $5,000 for improvements to the laundry rooms, $13,000 for plumbing repairs and $13,000 for structural improvements at Stratford Place Apartments; and $10,000 for interior replacements (kitchen tile and lighting) at Stratford Village Apartments. 8 of 14 WINTHROP GROWTH INVESTORS 1 LIMITED PARTNERSHIP FORM 10 - QSB SEPTEMBER 30, 1997 Item 2. Management's Discussion and Analysis or Plan of Operation (Continued) Liquidity and Capital Resources (continued) The Registrant invests its working capital reserves in a money market account. The Managing General Partner believes that, if market conditions remain relatively stable, cash flow from operations, when combined with working capital reserves, will be sufficient to fund required capital improvements, regular debt service payments and maintain quarterly distribution levels until the mortgages mature. The Registrant has a balloon payment of approximately $4,000,000 in 2000 and a balloon payment of approximately $8,000,000 in 2006. The Registrant will either have to extend or refinance these mortgages, or sell a property, prior to the due date of these balloon payments. On February 6, 1997, an affiliate of the Managing General Partner acquired, pursuant to a tender offer for a purchase price of $275 per unit, approximately 21% of the total limited partnership units of the Registrant (4,867.34 units). Results of Operations The Registrant's investment properties consist of four apartment complexes. The following table sets forth the average occupancy of the properties for the nine months ended September 30, 1997 and 1996: Average Occupancy ---------------------------- Property 1997 1996 - --------------------------- ---- ---- Meadow Wood Apartments 87% 87% Stratford Place Apartments 97% 94% Stratford Village Apartments 87% 89% Sunflower Apartments 95% 92% The Registrant's net loss for the nine months ended September 30, 1997, was approximately $343,000, as compared to a net loss of approximately $694,000 for the nine months ended September 30, 1996. Net loss for the three months ended September 30, 1997, was approximately $229,000, as compared to a net loss of approximately $207,000 for the three months ended September 30, 1996. Revenues for the nine months ended September 30, 1997 increased by $156,000, as compared to the 1996 comparable period, primarily due to increases in rental revenue of $156,000. Rental revenue increased primarily due to increases in occupancy at Stratford Place and Sunflower Apartments and increases in rental rates at all the properties except Stratford Place Apartments. Occupancy declined at Stratford Village Apartments due to construction of three new apartment complexes in the area with competitive rents. 9 of 14 WINTHROP GROWTH INVESTORS 1 LIMITED PARTNERSHIP FORM 10 - QSB SEPTEMBER 30, 1997 Item 2. Management's Discussion and Analysis or Plan of Operation (Continued) Results of Operations (continued) Expenses decreased by $195,000 for the nine months ended September 30, 1997, as compared to 1996, primarily due to decreases in general and administrative expenses of $118,000, repairs and maintenance of $89,000 and interest expense of $75,000. General and administrative expenses decreased primarily due to decreases in administrative and professional costs. Mortgage interest expense decreased due to principal amortization and reduction in interest rates on the mortgage refinancings of Sunflower Apartments in January 1996 and Stratford Place Apartments in May 1996. Repairs and maintenance decreased primarily due to an overall increase in capital improvements being done on the properties. 10 of 14 WINTHROP GROWTH INVESTORS 1 LIMITED PARTNERSHIP FORM 10 - QSB SEPTEMBER 30, 1997 Part II Item 5. Other Information On October 28, 1997, Insignia Financial Group, Inc. ("Insignia") acquired 100% of the Class B stock, of First Winthrop Corporation, the sole shareholder of the Registrant's General Partner. In connection with this acquisition a nominee of Insignia was elected as a director of the General Partner and has been appointed to the board of directors of the General Partner. The nominee has the authority to appoint members to a newly created residential committee. This committee is generally authorized to act on behalf of the General Partner in managing the business activities of the Registrant. On October 28, 1997, the partnership terminated Winthrop Management as the managing agent at its properties and appointed an affiliate of Insignia to assume management of the properties. The General Partner does not believe this transaction will have a material effect on the affairs and operations of the Registrant. An affiliate of the Managing General Partner has entered into an agreement to sell all of its limited partnership units to IPTI, LLC, an affiliate of Insignia. The transfer of these units is not expected to take place until April, 1998. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 27. Financial Data Schedule 99. Supplementary Information Required Pursuant to Section 9.4 of the Partnership Agreement. (b) Reports on Form 8-K No reports on Form 8-K were filed during the three months ended September 30, 1997. 11 of 14 WINTHROP GROWTH INVESTORS 1 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 GROWTH INVESTORS 1 LIMITED PARTNERSHIP By: Two Winthrop Properties, Inc. Managing General Partner BY: /s/ Michael L. Ashner ---------------------------------- Michael L. Ashner Chief Executive Officer and Director BY: /s/ Edward V. Williams ---------------------------------- Edward V. Williams Chief Financial Officer Dated: November 12, 1997 12 of 14 WINTHROP GROWTH INVESTORS 1 LIMITED PARTNERSHIP SEPTEMBER 30, 1997 Exhibit Index Exhibit Page No. ------- -------- 27. Financial Data Schedule - 99. Supplementary Information Required Pursuant to Section 9.4 of the Partnership Agreement. 14 13 of 14
EX-99 2 SUPPLEMENTARY INFORMATION Exhibit 99 WINTHROP GROWTH INVESTORS 1 LIMITED PARTNERSHIP SEPTEMBER 30, 1997 Supplementary Information Required Pursuant to Section 9.4 of the Partnership Agreement 1. Statement of Cash Available for Distribution for the three months ended September 30, 1997: Net Loss $ (229,000) Add: Amortization expense 22,000 Depreciation expense 478,000 Less: Cash to reserves (221,000) ----------- Cash Available for Distribution $ 50,000 =========== Distributions allocated to Limited Partners $ 50,000 =========== 2. Fees and other compensation paid or accrued by the Partnership to the General Partners, or their affiliates, during the three months ended September 30, 1997: Entity Receiving Form of Compensation Compensation Amount - ----------------- ----------------------------------------- ------ General Partners Interest in Cash Available for Distribution $ - Winthrop Management Property Management Fee $85,000 14 of 14 EX-27 3 FINANCIAL DATA SCHEDULE
5 The schedule contains summary financial information extracted from Winthrop Growth Investors 1 Limited Partnership and is qualified in its entirety by reference to such financial statements. 1 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 1,276,000 0 0 0 0 0 43,180,000 (21,213,000) 26,618,000 0 21,391,000 0 0 0 4,216,000 26,618,000 0 5,225,000 0 4,267,000 0 0 1,346,000 (343,000) 0 (343,000) 0 0 0 (343,000) 13.35 13.35
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