<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(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, 1995
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: 0-12048
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-I
- - - - --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Texas 75-1861221
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Seaport Plaza, New York, N.Y. 10292-0116
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 214-1016
N/A
- - - - --------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check CK 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 _CK_ No __
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Part I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-I
(a limited partnership)
STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
<S> <C> <C>
- - - - ----------------------------------------------------------------------------------------------------
ASSETS
Investment in property:
Land $ 2,960,536 $ 2,960,536
Buildings and improvements 9,354,708 9,347,790
Furniture, fixtures and equipment 494,985 489,045
Less: Accumulated depreciation (5,666,152) (5,580,646)
----------- ------------
Net investment in property 7,144,077 7,216,724
Cash and cash equivalents 671,220 760,357
Other assets 7,883 9,069
----------- ------------
Total assets $ 7,823,180 $ 7,986,151
----------- ------------
----------- ------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable and accrued expenses $ 150,156 $ 81,025
Accrued real estate taxes 20,859 227,374
Due to affiliates, net 54,509 29,183
Unearned rental income 80,613 84,236
Deposits due to tenants 23,599 23,071
----------- ------------
Total liabilities 329,736 444,889
----------- ------------
Contingencies
Partners' capital
Limited partners (29,187 limited and equivalent units
issued and outstanding) 7,397,640 7,444,980
General partners 95,804 96,282
----------- ------------
Total partners' capital 7,493,444 7,541,262
----------- ------------
Total liabilities and partners' capital $ 7,823,180 $ 7,986,151
----------- ------------
----------- ------------
- - - - ----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements
</TABLE>
2
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PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-I
(a limited partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months
ended March 31,
---------------------
1995 1994
<S> <C> <C>
- - - - --------------------------------------------------------------------------------------------------
REVENUES
Rental income $584,933 $553,866
Interest 4,669 3,402
-------- --------
589,602 557,268
-------- --------
EXPENSES
Property operating 179,468 164,070
Depreciation 85,506 82,152
Real estate taxes 56,394 57,492
General and administrative 71,116 91,660
-------- --------
392,484 395,374
-------- --------
Net income $197,118 $161,894
-------- --------
-------- --------
ALLOCATION OF NET INCOME
Limited partners $195,147 $160,275
-------- --------
-------- --------
General partners $ 1,971 $ 1,619
-------- --------
-------- --------
Net income per limited partnership unit $ 6.72 $ 5.52
-------- --------
-------- --------
- - - - --------------------------------------------------------------------------------------------------
</TABLE>
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
(Unaudited)
<TABLE>
<CAPTION>
LIMITED GENERAL
PARTNERS PARTNERS TOTAL
<S> <C> <C> <C> <C>
- - - - -----------------------------------------------------------------------------------------------------
Partners' capital--December 31, 1994 $7,444,980 $96,282 $ 7,541,262
Net income 195,147 1,971 197,118
Distributions (242,487) (2,449) (244,936)
---------- -------- -----------
Partners' capital--March 31, 1995 $7,397,640 $95,804 $ 7,493,444
---------- -------- -----------
---------- -------- -----------
- - - - -----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements
</TABLE>
3
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<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-I
(a limited partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months
ended March 31,
-----------------------
1995 1994
<S> <C> <C>
- - - - ---------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Rental income and deposits received $ 583,024 $ 557,546
Interest received 4,669 3,402
Property operating expenses paid (127,436) (162,565)
Real estate taxes paid (262,909) (229,970)
General and administrative expenses paid (28,691) (133,981)
--------- ---------
Net cash provided by operating activities 168,657 34,432
CASH FLOWS FROM INVESTING ACTIVITIES
Property improvements (12,858) --
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions paid to partners (244,936) (230,871)
--------- ---------
Net decrease in cash and cash equivalents (89,137) (196,439)
Cash and cash equivalents at beginning of period 760,357 855,162
--------- ---------
Cash and cash equivalents at end of period $ 671,220 $ 658,723
--------- ---------
--------- ---------
- - - - ---------------------------------------------------------------------------------------------------
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Net income $ 197,118 $ 161,894
--------- ---------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 85,506 82,152
Changes in:
Other assets 1,186 4,212
Accounts payable and accrued expenses 69,131 (76,848)
Accrued real estate taxes (206,515) (172,478)
Due to affiliates, net 25,326 36,032
Unearned rental income (3,623) 1,575
Deposits due to tenants 528 (2,107)
--------- ---------
Total adjustments (28,461) (127,462)
--------- ---------
Net cash provided by operating activities $ 168,657 $ 34,432
--------- ---------
--------- ---------
- - - - ---------------------------------------------------------------------------------------------------
SUPPLEMENTAL SCHEDULE OF FINANCING ACTIVITIES
Distributions to partners $(244,936) $(233,203)
Increase in distribution payable -- 2,332
--------- ---------
Distributions paid to partners $(244,936) $(230,871)
--------- ---------
--------- ---------
- - - - ---------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements
</TABLE>
4
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PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-I
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1995
(Unaudited)
A. General
These financial statements have been prepared without audit. In the opinion
of Prudential-Bache Properties, Inc. (``Managing General Partner'') (``PBP''),
the financial statements contain all adjustments (consisting of only normal
recurring adjustments) necessary to present fairly the financial position of
Prudential-Bache/Watson & Taylor, Ltd.-I (the ``Partnership'') as of March 31,
1995 and the results of its operations and its cash flows for the three months
ended March 31, 1995 and 1994. However, the operating results for the interim
periods may not be indicative of the results expected for the full year.
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. It is suggested that these financial statements be
read in conjunction with the financial statements and notes thereto included in
the Partnership's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the year ended December 31, 1994.
Certain balances for the prior period have been reclassified to conform with
the current financial statement presentation.
B. Related Parties
PBP and its affiliates perform services for the Partnership which include,
but are not limited to: accounting and financial management; transfer and
assignment functions; asset management; investor communications; printing and
other administrative services. PBP and its affiliates receive reimbursements for
costs incurred in connection with these services, the amount of which is limited
by the provisions of the Partnership Agreement. The costs and expenses incurred
on behalf of the Partnership which are reimbursable to PBP and its affiliates
for the three months ended March 31, 1995 and 1994 were approximately $31,000
and $29,000, respectively.
Affiliates of Messrs. Watson and Taylor, the individual General Partners,
also perform certain administrative and monitoring functions on behalf of the
Partnership. The Partnership recorded $1,250 for the reimbursement of these
services for the three months ended March 31, 1995. The Partnership recorded
$27,250 relating to the reimbursement for these services for the period from
November 1988 through March 1994 during the three months ended March 31, 1994.
PBP and the individual General Partners of the Partnership, own 147, 73 and
73 equivalent limited partnership units, respectively. PBP receives funds from
the Partnership, such as General Partner distributions and reimbursement of
expenses, but has waived all of its rights resulting from its ownership of
equivalent limited partnership units.
Prudential Securities Incorporated (``PSI''), an affiliate of PBP, owns 386
limited partnership units at March 31, 1995.
C. Contingencies
By order of the Judicial Panel on Multidistrict Litigation dated April 14,
1994, a number of purported class actions then pending in various federal
district courts were transferred to a single judge of the United States District
Court for the Southern District of New York and consolidated for pretrial
proceedings under the caption In re Prudential Securities Incorporated Limited
Partnerships Litigation (MDL Docket 1005). On June 8, 1994 plaintiffs in the
transferred cases filed a complaint that consolidated the previously filed
complaints and named as defendants, among others, PSI, certain of its present
and former employees and PBP. The Partnership is not named a defendant in the
consolidated complaint, but the name of the Partnership is listed as being among
the limited partnerships at issue in the case. The consolidated complaint
alleges violations of the federal and New Jersey Racketeer Influenced and
Corrupt Organizations Act (``RICO'') statutes, fraud, negligent
misrepresentation, breach of fiduciary duties, breach of third-party beneficiary
contracts, breach of implied covenants in connection with the marketing and
sales of limited partnership interests. Plaintiffs request relief in the nature
of rescission of the purchase of securities, and recovery of all consideration
and expenses in connection therewith, as well as compensation for lost use of
money
5
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invested, less cash distributions; compensatory damages; consequential damages;
treble damages for defendants' RICO violations (both federal and New Jersey);
general damages for all injuries resulting from negligence, fraud, breaches of
contract, and breaches of duty in an amount to be determined at trial;
disgorgement and restitution of all earnings, profits, benefits and compensation
received by defendants as a result of their unlawful acts; costs and
disbursements of the action; reasonable attorneys' fees; and such other and
further relief as the court deems just and proper.
PSI and PBP, along with various other defendants, filed a motion to dismiss
the consolidated complaint on December 20, 1994. The motion is pending.
D. Subsequent Event
In May 1995, distributions of approximately $243,000 and $2,000 were paid to
the limited partners and General Partners, respectively, for the quarter ended
March 31, 1995.
6
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<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-I
(a limited partnership)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership owns and operates two mini-storage facilities and four
combination mini-storage and office/warehouse facilities. During the three
months ended March 31, 1995 the Partnership's cash and cash equivalents
decreased by approximately $89,000 due to the timing of accrued expense payments
as well as payments for property improvements.
Distributions made during the three months ended March 31, 1995 totaled
approximately $245,000 of which $243,000 and $2,000 were paid to the limited
partners and General Partners, respectively. These distributions were funded
from property operations. The Partnership retained a portion of the cash from
property operations in anticipation of budgeted 1995 capital expenditures.
The Partnership's ability to make future distributions to the partners and
the amount of the distributions that may be made will be affected not only by
the amount of cash generated by the Partnership from the operations of its
properties, but also by the amount expended for capital improvements and the
amount set aside for anticipated capital improvements. Capital improvements are
currently budgeted at approximately $197,000 for the remainder of 1995.
Results of Operations
Occupancies at March 31, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
Property 1995 1994
<S> <C> <C>
- - - - ------------------------------------------
Hempstead 84.8% 83.0%
Pasadena 90.6 90.4
Northwest Highway 81.8 83.6
I-35 83.9 85.6
Santiago 90.2 89.0
Reinli 95.4 92.0
</TABLE>
(Occupancies are calculated by dividing occupied units by available units.)
Net income increased by approximately $35,000 for the three months ended
March 31, 1995 as compared to the corresponding period in 1994 primarily for
the reasons discussed below.
Rental income increased by approximately $31,000 for the three months ended
March 31, 1995 as compared to the corresponding period in 1994. Rental income
increased at Pasadena, I-35, Northwest Highway and Reinli primarily due to
improved effective rental rates while average occupancies increased at the
Hempstead and Santiago properties.
Property operating expenses increased by approximately $15,000 for the three
months ended March 31, 1995 as compared to the corresponding period in 1994
primarily due to increases in property level payroll costs, utility rates and
repairs and maintenance expenses for projects at the Reinli and Santiago
properties.
General and administrative expenses decreased by approximately $21,000 for
the three months ended March 31, 1995 as compared to the corresponding period in
the prior year primarily due to the accrual of prior periods' general,
administrative and monitoring expense reimbursements in 1994.
7
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings--This information is incorporated by reference to Note
C to the financial statements filed herewith in Item 1 of Part I of the
Registrant's Quarterly Report.
Item 2. Changes in Securities--None
Item 3. Defaults Upon Senior Securities--None
Item 4. Submission of Matters to a Vote of Security Holders--None
Item 5. Other Information--None
Item 6. (a) Exhibits
Description:
4.01 Revised Certificate of Limited Partnership Interest (filed as an
exhibit to Registrant's Form
10-K for the year ended December 31, 1988 and incorporated herein
by reference)
(b) Reports on Form 8-K--None
8
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Prudential-Bache/Watson & Taylor, Ltd.-I
By: Prudential-Bache Properties, Inc.
A Delaware corporation,
Managing General Partner
By: /s/ Robert J. Alexander Date: May 15, 1994
----------------------------------------
Robert J. Alexander
Vice President
Chief Accounting Officer for the
Registrant
9
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial
information extracted from the financial
statements for Prudential-Bache Watson & Taylor Ltd I
and is qualified in its entirety by reference
to such financial statements
</LEGEND>
<RESTATED>
<CIK> 0000708320
<NAME> Prudential-Bache Watson & Taylor Ltd I
<MULTIPLIER> 1
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> Mar-31-1995
<PERIOD-TYPE> 3-Mos
<CASH> 671,220
<SECURITIES> 0
<RECEIVABLES> 7,883
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 12,810,229
<DEPRECIATION> (5,666,152)
<TOTAL-ASSETS> 7,823,180
<CURRENT-LIABILITIES> 329,736
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 7,493,444
<TOTAL-LIABILITY-AND-EQUITY> 7,823,180
<SALES> 0
<TOTAL-REVENUES> 589,602
<CGS> 0
<TOTAL-COSTS> 392,494
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 197,118
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
