<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 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
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Seaport Plaza, New York, N.Y. 10292-0116
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 214-1016
Securities registered pursuant to Section 12(b) of the Act:
None
- -----------------------------------------------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
- ---------------------------------------------------------------------------
(Title of class)
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 CK No _
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [CK]
DOCUMENTS INCORPORATED BY REFERENCE
Annual Report to Limited Partners for the year ended December 31, 1995 is
incorporated by reference
into Parts I, II and IV of this Annual Report on Form 10-K.
Amended and Restated Certificate and Agreement of Limited Partnership,
included as part of the Registration Statement on Form S-11 (File No. 2-79950)
filed with the Securities and Exchange Commission pursuant to Rule 424(b) of the
Securities Act of 1933, as amended, is incorporated by reference into Part IV of
this Annual Report on Form 10-K.
Index to exhibits can be found on pages 9 and 10.
<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-I
(a limited partnership)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I PAGE
<S> <C> <C>
Item 1 Business.......................................................................... 3
Item 2 Properties........................................................................ 4
Item 3 Legal Proceedings................................................................. 5
Item 4 Submission of Matters to a Vote of Limited Partners............................... 5
PART II
Item 5 Market for the Registrant's Units and Related Limited Partner Matters............. 5
Item 6 Selected Financial Data........................................................... 6
Item 7 Management's Discussion and Analysis of Financial Condition and Results of
Operations...................................................................... 6
Item 8 Financial Statements and Supplementary Data....................................... 6
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure...................................................................... 6
PART III
Item 10 Directors and Executive Officers of the Registrant................................ 6
Item 11 Executive Compensation............................................................ 8
Item 12 Security Ownership of Certain Beneficial Owners and Management.................... 8
Item 13 Certain Relationships and Related Transactions.................................... 8
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K
Financial Statements and Financial Statement Schedules............................ 9
Exhibits.......................................................................... 9
Reports on Form 8-K............................................................... 10
SIGNATURES................................................................................... 14
</TABLE>
2
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<PAGE>
PART I
Item 1. Business
General
Prudential-Bache/Watson & Taylor, Ltd.-I (the ``Registrant''), a Texas
limited partnership, was formed on October 20, 1982 and will terminate on
December 31, 2050 unless terminated sooner under the provisions of the Amended
and Restated Certificate and Agreement of Limited Partnership (the ``Partnership
Agreement''). The Registrant was formed for the purpose of acquiring,
developing, owning, and operating mini-storage and office/warehouse facilities
with proceeds raised from the initial sale of units of limited partnership
interests (``Units''). The Registrant's fiscal year for book and tax purposes
ends on December 31.
The Registrant operates six properties, four of which are combination
mini-storage and office/warehouse facilities and two of which are mini-storage
facilities. For more information regarding the Registrant's properties, see Item
2 Properties. For more information regarding the Registrant's operations, see
Item 7 Management's Discussion and Analysis of Financial Condition and Results
of Operations in the Registrant's Annual Report to Limited Partners for the year
ended December 31, 1995 (``Registrant's Annual Report'') which is filed as an
exhibit hereto. The Registrant is engaged solely in the business of real estate
investment; therefore, presentation of industry segment information is not
applicable.
On December 15, 1995, the Management Committee of the Registrant determined
to seek bids for all of the properties held by the Registrant. As of March 22,
1996, preliminary bids have been received for all properties. If bids for the
properties are deemed acceptable by the Registrant, the Registrant intends to
enter into agreements to sell the properties, subject to the approval of the
limited partners owning a majority of the Units as required by the Partnership
Agreement. If such sales are approved and consummated, the Registrant will
liquidate and distribute its net assets to its partners. There can, of course,
be no assurance that acceptable bids will be received or that any transactions
will be consummated.
General Partners
The general partners of the Registrant are Prudential-Bache Properties, Inc.
(``PBP''), George S. Watson and A. Starke Taylor, III (collectively, the
``General Partners''). PBP is the Managing General Partner and is responsible
for the day-to-day operations of the Registrant and its investments. See Note E
of the financial statements in the Registrant's Annual Report which is filed as
an exhibit hereto.
Competition
The General Partners and/or their affiliates have formed, and may continue to
form, various entities to engage in businesses which may be competitive with the
Registrant.
The Registrant competes with national and regional real estate owners and
operators, some of whom have more experience and resources than the Registrant.
Such owners and operators may include insurance companies, mortgage banks,
pension funds, and other real estate investors, including foreign investors,
syndicated partnerships, and real estate investment trusts. The primary factors
affecting a particular property's ability to successfully compete against other
properties include the location of such property, the suitability of its design
to a prospective tenant's needs, the manner in which it is managed and marketed,
and rental rates. The extent to which the Registrant is affected by competition
will depend, in part, on existing market conditions. The property managers,
Public Storage Management, Inc. and Public Storage Commercial Properties Group,
Inc., manage other properties which compete with the Registrant's properties
within the same geographical area.
Employees
The Registrant has no employees. Management and administrative services for
the Registrant are performed by the General Partners and their affiliates
pursuant to the Partnership Agreement. See Note E of the financial statements in
the Registrant's Annual Report which is filed as an exhibit hereto.
3
<PAGE>
<PAGE>
Item 2. Properties
As of December 31, 1995, the Registrant owns the following properties:
<TABLE>
<CAPTION>
Monthly
Average Rental
Occupancy Rates Rates
for the Per Unit
year ended as of
December 31, Land Rentable December
Property Location 1995(1) (in acres) Units 31, 1995
- ----------------------------------------- ----------------- ---------- -------- -----------
<S> <C> <C> <C> <C>
Hempstead (Houston, TX)
Mini-warehouse 89.3% 5.13 573 $ 19 - $235
--------
Pasadena (Houston, TX)
Mini-warehouse 87.8 4.27 588 $ 21 - $200
--------
Northwest Highway (Dallas, TX)
Mini-warehouse 90.3 3.58 617 $ 17 - $200
Office/warehouse 12 $367 - $400
--------
629
--------
I-35 (Dallas, TX)
Mini-warehouse 91.6 2.78 580 $ 15 - $150
Office/warehouse 13 $367 - $400
--------
593
--------
Santiago (Austin, TX)
Mini-warehouse 95.5 3.90 524 $ 25 - $133
Office/warehouse 16 $350 - $500
--------
540
--------
Reinli (Austin, TX)
Mini-warehouse 95.6 5.07 596 $ 31 - $196
Office/warehouse 30 $375 - $630
--------
626
--------
3,549
--------
--------
- ----------------------------------------------------------------------------------------------------------
(1) Average occupancy rates are calculated by averaging the monthly occupancies determined by dividing
occupied square footage by available square footage as of each month-end.
</TABLE>
The Managing General Partner believes the Registrant's properties are
adequately insured.
4
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<PAGE>
For the years ended December 31, 1995, 1994 and 1993, respectively, the
following properties' rental revenues exceeded 15% of the Registrant's total
revenue:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Reinli 25 % 25% 24%
I-35 16 17 17
Northwest Highway * 17 17
Santiago 16 16 16
</TABLE>
* Property's rental revenue was 15% or less of the Registrant's total revenue
for the year.
No single tenant accounted for 10% or more of the total revenue for any of
the three years in the period ended December 31, 1995.
For additional information describing the Registrant's properties, see
Supplementary Schedule III--Real Estate and Accumulated Depreciation on page 12
in Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K.
Item 3. Legal Proceedings
This information is incorporated by reference to Note G of the financial
statements in the Registrant's Annual Report which is filed as an exhibit
hereto.
Item 4. Submission of Matters to a Vote of Limited Partners
None.
PART II
Item 5. Market for the Registrant's Units and Related Limited Partner Matters
As of March 1, 1996, there were 1,986 holders of record owning 29,187 Units,
inclusive of 147, 73 and 73 equivalent limited partnership units held by PBP and
Messrs. Watson and Taylor, respectively. A significant secondary market for the
Units has not developed, and it is not expected that one will develop in the
future. There are also certain restrictions set forth in Section 17.3 of the
Partnership Agreement limiting the ability of a limited partner to transfer
Units. Consequently, holders of Units may not be able to liquidate their
investments in the event of an emergency or for any other reason.
The following per Unit cash distributions were paid to limited partners on or
about 45 days after the end of the specified quarter:
<TABLE>
<CAPTION>
Quarter Ended 1995 1994
---------------------------------- ------ ------
<S> <C> <C>
March 31 $ 8.35 $ 8.30
June 30 8.35 9.23
September 30 8.35 10.00
December 31 8.35 8.35
</TABLE>
Distributions for the years ended December 31, 1995 and 1994 were made from
current and previously undistributed cash generated by the operations of the
Registrant's properties. Limited partner distributions were approximately
$970,000 and $1,030,000 for the years ended December 31, 1995 and 1994,
respectively. The amount of limited partner distributions that represented a
return of capital on a generally accepted accounting principles (GAAP) basis was
approximately $124,000 and $204,000 for the years ended December 31, 1995 and
1994, respectively (return of capital on a GAAP basis is calculated as limited
partner distributions less net income allocated to limited partners). There are
no material restrictions upon the Registrant's present or future ability to make
distributions in accordance with the provisions of the Partnership Agreement.
The Registrant currently expects that recurring quarterly cash distributions
will continue to be paid in the foreseeable future from property operations. For
discussion of other factors that may affect the amounts of future distributions,
see Management's Discussion and Analysis of Financial Condition and Results of
Operations on pages 9 and 10 of the Registrant's Annual Report which is filed as
an exhibit hereto.
5
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<PAGE>
Item 6. Selected Financial Data
The following table presents selected financial data of the Registrant. This
data should be read in conjunction with the financial statements of the
Registrant and the notes thereto on pages 2 through 8 of the Registrant's Annual
Report which is filed as an exhibit hereto.
<TABLE>
<CAPTION>
Year ended December 31,
------------------------------------------------------------------
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
---------- ---------- ---------- ---------- ----------
Total revenues $2,432,565 $2,319,275 $2,213,450 $2,074,031 $1,921,563
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Net income $ 854,210 $ 835,017 $ 754,148 $ 667,901 $ 597,257
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Limited partner net income per
Unit $ 29.12 $ 28.47 $ 25.71 $ 22.77 $ 20.26
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total assets $7,897,457 $7,986,151 $8,350,911 $8,508,796 $8,845,049
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total distributions $ 979,752 $1,040,760 $1,042,825 $1,021,693 $1,034,992
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Limited partner distributions per
Unit $ 33.40 $ 35.48 $ 35.55 $ 34.83 $ 35.10
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This information is incorporated by reference to pages 9 and 10 of the
Registrant's Annual Report which is filed as an exhibit hereto.
Item 8. Financial Statements and Supplementary Data
The financial statements are incorporated by reference to pages 2 through 8
of the Registrant's Annual Report which is filed as an exhibit hereto.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant
There are no directors or executive officers of the Registrant. The
Registrant is managed by the Managing General Partner.
The Registrant, the Registrant's General Partners, PBP's directors and
executive officers and any persons holding more than ten percent of the
Registrant's Units are required to report their initial ownership of such Units
and any subsequent changes in that ownership to the Securities and Exchange
Commission on Forms 3, 4 and 5. Such General Partners, executive officers,
directors and other persons who own greater than ten percent of the Registrant's
Units are required by Securities and Exchange Commission regulations to furnish
the Registrant with copies of all Forms 3, 4 or 5 they file. All of these filing
requirements were satisfied on a timely basis. In making these disclosures, the
Registrant has relied solely on written representations of the General Partners,
PBP's directors and executive officers and other persons who own greater than
ten percent of the Registrant's Units or copies of the reports they have filed
with the Securities and Exchange Commission during and with respect to its most
recent fiscal year.
6
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<PAGE>
Prudential-Bache Properties, Inc., Managing General Partner
The directors and executive officers of PBP and their positions with regard
to managing the Registrant are as follows:
<TABLE>
<CAPTION>
Name Position
<S> <C>
Thomas F. Lynch, III President, Chief Executive Officer, Chairman of the
Board of Directors and Director
Barbara J. Brooks Vice President--Finance and Chief Financial Officer
Eugene D. Burak Vice President and Chief Accounting Officer
Chester A. Piskorowski Vice President
Frank W. Giordano Director
Nathalie P. Maio Director
</TABLE>
THOMAS F. LYNCH, III, age 37, is the President, Chief Executive Officer,
Chairman of the Board of Directors and a Director of PBP. He is a Senior Vice
President of Prudential Securities Incorporated (``PSI''), an affiliate of PBP.
Mr. Lynch also serves in various capacities for other affiliated companies. Mr.
Lynch joined PSI in November 1989.
BARBARA J. BROOKS, age 47, is the Vice President--Finance and Chief Financial
Officer of PBP. She is a Senior Vice President of PSI. Ms. Brooks also serves in
various capacities for other affiliated companies. She has held several
positions within PSI since 1983. Ms. Brooks is a certified public accountant.
EUGENE D. BURAK, age 50, is a Vice President of PBP. He is a First Vice
President of PSI. Prior to joining PSI in September 1995, he was a management
consultant for three years and was with Equitable Capital Management Corporation
from March 1990 to May 1992. Mr. Burak is a certified public accountant.
CHESTER A. PISKOROWSKI, age 52, is a Vice President of PBP. He is a Senior
Vice President of PSI and is the Senior Manager of the Specialty Finance Asset
Management area. Mr. Piskorowski has held several positions within PSI since
April 1972. Mr. Piskorowski is a member of the New York and Federal Bars.
FRANK W. GIORDANO, age 53, is a Director of PBP. He is a Senior Vice
President of PSI and an Executive Vice President and General Counsel of
Prudential Mutual Fund Management, Inc., an affiliate of PSI. Mr. Giordano also
serves in various capacities for other affiliated companies. He has been with
PSI since July 1967.
NATHALIE P. MAIO, age 45, is a Director of PBP. She is a Senior Vice
President and Deputy General Counsel of PSI and supervises non-litigation legal
work for PSI. She joined PSI's Law Department in 1983; presently also serves in
various capacities for other affiliated companies.
James M. Kelso ceased to serve as President, Chief Executive Officer,
Chairman of the Board of Directors and Director effective June 30, 1995.
Effective June 30, 1995, Thomas F. Lynch, III was elected President, Chief
Executive Officer, Chairman of the Board of Directors and Director. Robert J.
Alexander ceased to serve as Vice President effective August 25, 1995. Eugene D.
Burak was elected Vice President effective October 9, 1995.
There are no family relationships among any of the foregoing directors or
executive officers. All of the foregoing directors and executive officers have
indefinite terms.
Individual General Partners
George S. Watson, age 55, is a financial specialist and a certified public
accountant. He is also a member of the board of directors of Lyco Energy
Corporation as well as the Advisory Council of the University of Texas Business
School and a member of its Chancellor's Council. Mr. Watson attended the
University of Texas in Austin, graduating summa cum laude in 1963 with a B.B.A.
in accounting and finance. He received his M.B.A. in accounting and finance from
the University of Texas in 1965, graduating first in his class and
7
<PAGE>
<PAGE>
summa cum laude. He has received various awards and scholarships and is a member
of many fraternal organizations including Phi Kappa Phi, the honorary scholastic
fraternity.
A. Starke Taylor, III, age 52, holds a bachelor of business administration
degree from Southern Methodist University which was awarded in 1966. He is past
president of the North Dallas Chamber of Commerce. Active in the community, Mr.
Taylor is the chairman of the board of Priority One, an international missionary
organization, the founding chairman of the board of the Park Central Athletic
Association, a member of the Dallas regional board of the Salvation Army, and a
board member of the Dallas Theological Seminary. Mr. Taylor was recognized in
1983 by D Magazine as one of Dallas's 10 most outstanding young business
leaders.
There are no family relationships among any of the foregoing individual
General Partners.
Item 11. Executive Compensation
The Registrant does not pay or accrue any fees, salaries or any other form of
compensation to either individual General Partner or to directors and officers
of the Managing General Partner for their services. Certain officers and
directors of the Managing General Partner receive compensation from affiliates
of the Managing General Partner, not from the Registrant, for services performed
for various affiliated entities, which may include services performed for the
Registrant; however, the Managing General Partner believes that any compensation
attributable to services performed for the Registrant is immaterial. See also
Item 13 Certain Relationships and Related Transactions for information regarding
reimbursement to the General Partners for services provided to the Registrant.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of March 1, 1996, no individual General Partner or director or officer of
the Managing General Partner owns directly or beneficially any interest in the
voting securities of the Managing General Partner.
As of March 1, 1996, no individual General Partner or director or officer of
the Managing General Partner owns directly or beneficially any of the Units
issued by the Registrant. However, the General Partners have contributed to the
Registrant and, based on such contribution, they received ``equivalent units''
entitling them to participate in the distributions to the limited partners and
in the Registrant's profits and losses in the same proportion that the General
Partners' capital contribution bears to the total capital contributions of the
limited partners. The Managing General Partner has retained its right to receive
funds from the Registrant, such as General Partner distributions and
reimbursement of expenses, but has waived its right to share in any limited
partner cash distributions and allocations of Registrant's profits and losses
based upon such equivalent units.
As of March 1, 1996, no limited partner beneficially owns more than five
percent (5%) of the outstanding Units issued by the Registrant.
Item 13. Certain Relationships and Related Transactions
The Registrant has and will continue to have certain relationships with the
General Partners and their affiliates. However, there have been no direct
financial transactions between the Registrant and the individual General
Partners or the directors or officers of the Managing General Partner during
1995.
Reference is made to Notes A and E of the financial statements in the
Registrant's Annual Report which is filed as an exhibit hereto, which identify
the related parties and discuss the services provided by these parties and the
amounts paid or payable for their services.
8
<PAGE>
<PAGE>
PART IV
<TABLE>
<CAPTION>
Page
Number in
Annual Report
<S> <C> <C> <C>
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Financial Statements and Report of Independent Audi-
tors--Incorporated by reference to the Registrant's Annual Report
which is filed as an exhibit hereto
Report of Independent Auditors 2
Financial Statements:
Statements of Financial Condition--December 31, 1995 and 1994 3
Statements of Operations--Three years ended December 31, 1995 4
Statements of Changes in Partners' Capital--Three years ended
December 31, 1995 4
Statements of Cash Flows--Three years ended December 31, 1995 5
Notes to Financial Statements 6
2. Financial Statement Schedule and Consent of Independent Auditors
Consent of Independent Auditors
Schedule:
III--Real Estate and Accumulated Depreciation at December 31,
1995
Notes to Schedule III--Real Estate and Accumulated Depreciation
All other schedules have been omitted because they are not
applicable or the required information is included in the
financial statements and the notes thereto.
3. Exhibits
Description:
3.01 Amended and Restated Certificate and Agreement of Limited
Partnership (1)
3.02 Amendment Number 8 to Amended and Restated Certificate and
Agreement of Limited Partnership (2)
4.01 Revised Certificate of Limited Partnership Interest (3)
10.01 Management Agreement (1)
10.02 Property Management Agreement dated as of November 1, 1988
by and between the Registrant and Public Storage Commercial
Properties Group, Inc. (3)
10.03 Property Management Agreement dated as of November 1, 1988
by and between the Registrant and Public Storage
Management, Inc. (3)
10.04 Agreement Relating to General Partner Interests (1)
13.01 Annual Report to Limited Partners for the year ended
December 31, 1995 (4) (with the exception of the information and
data incorporated by reference in Items 3, 7 and 8 of this
Annual Report on Form 10-K, no other information or data
appearing in the Registrant's Annual Report is to be deemed
filed as part of this report)
27. Financial Data Schedule (4)
</TABLE>
9
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
(b) Reports on Form 8-K
Registrant's Current Report on Form 8-K dated December 6, 1995,
as filed with the Securities and Exchange Commission on December
6, 1995, relating to Item 5 regarding the communication of
certain information to the limited partners.
Registrant's Current Report on Form 8-K dated December 15, 1995,
as filed with the Securities and Exchange Commission on December
26, 1995, relating to Item 5 regarding the intention of the
Partnership to solicit bids for the Partnership's properties.
</TABLE>
- ------------------
(1) Filed as an exhibit to Registration Statement on Form S-11 (No. 2-79950)
and incorporated herein by reference.
(2) Filed as an exhibit to Registrant's Form 10-Q for the quarter ended March
31, 1990 and incorporated herein by reference.
(3) Filed as an exhibit to Registrant's Form 10-K for the year ended December
31, 1988 and incorporated herein by reference.
(4) Filed herewith.
10
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<PAGE>
CONSENT OF INDEPENDENT AUDITORS
To the Partners
Prudential-Bache/Watson & Taylor, Ltd.-I
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Prudential-Bache/Watson & Taylor, Ltd.-I of our report dated February 16,
1996, included in the 1995 Annual Report to Limited Partners of
Prudential-Bache/Watson & Taylor, Ltd.-I.
Our audits also included the financial statement schedules of
Prudential-Bache/Watson & Taylor Ltd.-1 listed in Item 14(a). These schedules
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion based on our audits. In our opinion, the financial statement
schedules referred to above, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
Ernst & Young
New York, New York
March 29, 1996
11
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<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-I
(a limited partnership)
SCHEDULE III--REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995
<TABLE>
<CAPTION>
Initial cost to
Registrant Costs Gross amount at which carried at
(Note B) capitalized close of period
------------------------------- subsequent ------------------------------------------------
Buildings and to Buildings and Total
Description (Note A) Land improvements acquisition Land improvements (Note C)
<S> <C> <C> <C> <C> <C> <C>
- --------------------- ----------- ---------------- ------------ ---------- ----------------- -----------
MINI-WAREHOUSE:
Hempstead
Houston, Texas $ 282,424 $1,031,998 $ 150,247 $ 282,424 $ 1,182,245 $ 1,464,669
I-35/LBJ
Dallas, Texas 424,461 1,462,849 381,690 425,139 1,843,861 2,269,000
OFFICE/WAREHOUSE:
Northwest Highway
Dallas, Texas 463,964 1,899,006 54,524 465,385 1,952,109 2,417,494
Pasadena
Houston, Texas 224,439 1,040,190 322,321 224,439 1,362,511 1,586,950
Reinli
Austin, Texas 827,985 205,885 1,909,081 849,962 2,092,989 2,942,951
Santiago
Austin, Texas 688,424 46,477 1,573,309 713,187 1,595,023 2,308,210
----------- ---------------- ------------ ---------- ----------------- -----------
$ 2,911,697 $5,686,405 $4,391,172 $2,960,536 $10,028,738 $12,989,274
----------- ---------------- ------------ ---------- ----------------- -----------
----------- ---------------- ------------ ---------- ----------------- -----------
- ------------------------------------------------------------------------------------------------------------------------------
See notes on the following page
<CAPTION>
Life on which
depreciation
in latest
Accumulated Statement of
depreciation Date(s) of Date Operations is
Description (Note A) (Note D) construction acquired computed
<S> <C> <C> <C> <C>
- --------------------- ------------ ---------- --------- --------------
MINI-WAREHOUSE:
Hempstead 5 to
Houston, Texas $ 791,352 1972 1983 25 years
I-35/LBJ 5 to
Dallas, Texas 1,036,177 1983 1983 25 years
OFFICE/WAREHOUSE:
Northwest Highway 5 to
Dallas, Texas 1,265,558 1982 1983 25 years
Pasadena 5 to
Houston, Texas 881,708 1972 1983 25 years
Reinli 5 to
Austin, Texas 1,148,565 1983 1983 25 years
Santiago 5 to
Austin, Texas 815,193 1983/1984 1983 25 years
------------
$ 5,938,553
------------
------------
- ------------------------------------------------------------------------------------------------
</TABLE>
12
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<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-I
(a limited partnership)
NOTES TO SCHEDULE III
December 31, 1995
NOTE A--There are no mortgages, deeds of trust or similar encumbrances against
any of the properties.
NOTE B--Initial cost represents the initial purchase price of the properties
including acquisition fees.
NOTE C--RECONCILIATION SUMMARY OF TRANSACTIONS--REAL ESTATE OWNED
<TABLE>
<CAPTION>
Year ended December 31,
-------------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Balance at beginning of year........................ $12,797,371 $12,734,113 $12,711,677
Net additions during the year....................... 191,903 63,258 22,436
----------- ----------- -----------
Balance at close of year............................ $12,989,274 $12,797,371 $12,734,113
----------- ----------- -----------
----------- ----------- -----------
The aggregate cost of land, buildings and improvements for Federal income tax purposes for the
tax year ended December 31, 1995 was $12,994,932.
NOTE D--RECONCILIATION SUMMARY OF TRANSACTIONS--ACCUMULATED DEPRECIATION
<CAPTION>
Year ended December 31,
-------------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Balance at beginning of year........................ $ 5,580,646 $ 5,250,097 $ 4,923,668
Depreciation during the year
charged to expense................................ 357,907 330,549 326,429
----------- ----------- -----------
Balance at close of year............................ $ 5,938,553 $ 5,580,646 $ 5,250,097
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
13
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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/ Eugene D. Burak Date: March 29, 1996
----------------------------------------
Eugene D. Burak
Vice President and
Chief Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities (with respect to the General Partners) and on
the dates indicated.
By: Prudential-Bache Properties, Inc.,
A Delaware corporation,
Managing General Partner
By: /s/ Thomas F. Lynch, III Date: March 29, 1996
-----------------------------------------
Thomas F. Lynch, III
President, Chief Executive Officer and
Chairman of the Board of Directors
By: /s/ Barbara J. Brooks Date: March 29, 1996
-----------------------------------------
Barbara J. Brooks
Vice President-Finance and
Chief Financial Officer
By: /s/ Eugene D. Burak Date: March 29, 1996
-----------------------------------------
Eugene D. Burak
Vice President
By: /s/ Frank W. Giordano Date: March 29, 1996
-----------------------------------------
Frank W. Giordano
Director
By: /s/ Nathalie P. Maio Date: March 29, 1996
-----------------------------------------
Nathalie P. Maio
Director
14
<PAGE>
1995 ANNUAL REPORT
<PAGE>
1995
- --------------------------------------------------------------------------------
Prudential-Bache/ Annual
Watson & Taylor, Ltd.-I Report
<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-I
1995 Annual Report
1
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Partners
Prudential-Bache/Watson & Taylor, Ltd.-I
We have audited the accompanying statements of financial condition of
Prudential-Bache/Watson & Taylor, Ltd.-I as of December 31, 1995 and 1994, and
the related statements of operations, changes in partners' capital, and cash
flows for each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial condition of Prudential-Bache/Watson &
Taylor, Ltd.-I as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
As discussed in Note B to the financial statements, in 1995, the Partnership
changed its method of accounting for the carrying value of real estate by
adopting Statement of Financial Accounting Standards No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.
Ernst & Young
New York, New York
February 16, 1996
2
<PAGE>
<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-I
(a limited partnership)
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
December 31,
-----------------------------
1995 1994
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------
ASSETS
Land $ 2,960,536 $ 2,960,536
Buildings and improvements 9,528,828 9,347,790
Furniture, fixtures and equipment 499,910 489,045
Less: Accumulated depreciation (5,938,553 ) (5,580,646 )
------------ ------------
Property 7,050,721 7,216,725
Cash and cash equivalents 838,954 760,357
Other assets 7,782 9,069
------------ ------------
Total assets $ 7,897,457 $ 7,986,151
------------ ------------
------------ ------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accrued real estate taxes $ 238,178 $ 227,374
Accounts payable and accrued expenses 100,490 81,025
Unearned rental income 81,263 84,236
Due to affiliates, net 33,171 29,183
Deposits due to tenants 28,635 23,071
------------ ------------
Total liabilities 481,737 444,889
------------ ------------
Contingencies
Partners' capital
Limited partners (29,187 limited and equivalent units issued and
outstanding) 7,320,693 7,444,980
General partners 95,027 96,282
------------ ------------
Total partners' capital 7,415,720 7,541,262
------------ ------------
Total liabilities and partners' capital $ 7,897,457 $ 7,986,151
------------ ------------
------------ ------------
- ----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements
</TABLE>
3
<PAGE>
<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-I
(a limited partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------
1995 1994 1993
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
REVENUES
Rental income $2,412,547 $2,303,102 $2,199,480
Interest 20,018 16,173 13,970
---------- ---------- ----------
2,432,565 2,319,275 2,213,450
---------- ---------- ----------
EXPENSES
Property operating 695,643 651,805 563,922
Depreciation 357,907 330,549 326,429
General and administrative 287,831 275,361 335,484
Real estate taxes 236,974 226,543 233,467
---------- ---------- ----------
1,578,355 1,484,258 1,459,302
---------- ---------- ----------
Net income $ 854,210 $ 835,017 $ 754,148
---------- ---------- ----------
---------- ---------- ----------
ALLOCATION OF NET INCOME
Limited partners $ 845,668 $ 826,667 $ 746,607
---------- ---------- ----------
---------- ---------- ----------
General partners $ 8,542 $ 8,350 $ 7,541
---------- ---------- ----------
---------- ---------- ----------
Net income per limited partnership unit $ 29.12 $ 28.47 $ 25.71
---------- ---------- ----------
---------- ---------- ----------
- ----------------------------------------------------------------------------------------------------
</TABLE>
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
<TABLE>
<CAPTION>
LIMITED GENERAL
PARTNERS PARTNERS TOTAL
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Partners' capital--December 31, 1992 $ 7,934,444 $ 101,238 $8,035,682
Net income 746,607 7,541 754,148
Distributions (1,032,385) (10,440) (1,042,825)
----------- ----------- ----------
Partners' capital--December 31, 1993 7,648,666 98,339 7,747,005
Net income 826,667 8,350 835,017
Distributions (1,030,353) (10,407) (1,040,760)
----------- ----------- ----------
Partners' capital--December 31, 1994 7,444,980 96,282 7,541,262
Net income 845,668 8,542 854,210
Distributions (969,955) (9,797) (979,752)
----------- ----------- ----------
Partners' capital--December 31, 1995 $ 7,320,693 $ 95,027 $7,415,720
----------- ----------- ----------
----------- ----------- ----------
- -----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements
</TABLE>
4
<PAGE>
<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-I
(a limited partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31,
------------------------------------------
1995 1994 1993
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Rental income and deposits received $2,416,425 $ 2,284,838 $ 2,175,316
Interest received 20,018 16,173 13,970
Property operating expenses paid (684,647) (646,943) (540,278)
Real estate taxes paid (226,170) (231,224) (224,647)
General and administrative expenses paid (275,374) (398,058) (228,764)
---------- ----------- -----------
Net cash provided by operating activities 1,250,252 1,024,786 1,195,597
CASH FLOWS FROM INVESTING ACTIVITIES
Property improvements (191,903) (63,258) (22,436)
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions paid to partners (979,752) (1,056,333) (1,034,621)
---------- ----------- -----------
Net increase (decrease) in cash and cash equivalents 78,597 (94,805) 138,540
Cash and cash equivalents at beginning of year 760,357 855,162 716,622
---------- ----------- -----------
Cash and cash equivalents at end of year $ 838,954 $ 760,357 $ 855,162
---------- ----------- -----------
---------- ----------- -----------
- -----------------------------------------------------------------------------------------------------
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Net income $ 854,210 $ 835,017 $ 754,148
---------- ----------- -----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 357,907 330,549 326,429
Changes in:
Other assets 1,287 2,664 (7,568)
Accounts payable and accrued expenses 19,465 (77,972) 104,569
Due to affiliates, net 3,988 (42,527) 25,795
Accrued real estate taxes 10,804 (4,681) 8,820
Unearned rental income (2,973) (14,297) (18,371)
Deposits due to tenants 5,564 (3,967) 1,775
---------- ----------- -----------
Total adjustments 396,042 189,769 441,449
---------- ----------- -----------
Net cash provided by operating activities $1,250,252 $ 1,024,786 $ 1,195,597
---------- ----------- -----------
---------- ----------- -----------
- -----------------------------------------------------------------------------------------------------
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES
Distributions to partners $ (979,752) $(1,040,760) $(1,042,825)
Increase (decrease) in distribution payable -- (15,573) 8,204
---------- ----------- -----------
Distributions paid to partners $ (979,752) $(1,056,333) $(1,034,621)
---------- ----------- -----------
---------- ----------- -----------
- -----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements
</TABLE>
5
<PAGE>
<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-I
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
A. General
Prudential-Bache/Watson & Taylor, Ltd.-I (the ``Partnership'') is a Texas
limited partnership formed on October 20, 1982 which will terminate on December
31, 2050 unless terminated sooner under the provisions of the Amended and
Restated Certificate and Agreement of Limited Partnership (the ``Partnership
Agreement''). The Partnership was formed for the purpose of acquiring, owning,
developing and operating mini-storage and combination mini-storage and
office/warehouse facilities. The general partners of the Partnership are
Prudential-Bache Properties, Inc. (``PBP''), a wholly-owned subsidiary of
Prudential Securities Group Inc., George S. Watson, and A. Starke Taylor, III
(collectively, the ``General Partners''). PBP is the Managing General Partner
and is responsible for the day-to-day operations of the Partnership and its
investments. At December 31, 1995, the Partnership owned six properties.
B. Summary of Significant Accounting Policies
Basis of accounting
The books and records of the Partnership are maintained on the accrual basis
of accounting in accordance with generally accepted accounting principles. The
preparation of financial statements in conformity with generally accepted
accounting principles requires the General Partners to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Property
Effective December 31, 1995, 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.'' Under SFAS No.
121, impairment of properties to be held and used is determined to exist when
estimated amounts recoverable through future operations on an undiscounted basis
are below the properties' carrying value. If a property is determined to be
impaired, it should be recorded at the lower of its carrying value or its
estimated fair value. For properties that are held for sale, SFAS No. 121 states
that they should be recorded at the lower of carrying amount or estimated fair
value less costs to sell. On December 15, 1995, the Management Committee of the
Partnership determined to seek bids for all of the properties held by the
Partnership. Accordingly, effective December 31, 1995, the Partnership has
reclassified its properties from held for use to held for sale and has ceased
depreciating the properties for financial statement purposes only. The adoption
of SFAS No. 121 had no material effect on the financial position of the
Partnership as of December 31, 1995.
The determination of estimated fair value is based, not only upon future cash
flows, which rely upon estimates and assumptions including expense growth,
occupancy and rental rates, but also upon market capitalization and discount
rates as well as other market indicators. The General Partners believe that the
estimates and assumptions used are appropriate in evaluating the carrying amount
of the Partnership's properties. However, changes in market conditions and
circumstances may occur in the near term which would cause these estimates and
assumptions to change, which, in turn, could cause the amounts ultimately
realized upon the sale or other disposition of the properties to differ
materially from their estimated fair value. Such changes may also require
write-downs in future years.
Prior to December 31, 1995, the Partnership carried its property investments
at the lower of depreciated cost or estimated amounts recoverable through future
operations and ultimate disposition of the property. Property investments were
depreciated or amortized using the straight-line method over their estimated
economic lives which range from 5 to 25 years depending on property type. A
provision for loss on impairment of assets would have been recorded when
estimated amounts recoverable through future operations and ultimate disposition
of the property on a undiscounted basis were below depreciated cost. No
provision for loss on impairment of assets has been recorded by the Partnership.
6
<PAGE>
<PAGE>
Cash and cash equivalents
Cash and cash equivalents include money market funds whose cost approximates
market value.
Income taxes
The Partnership is not required to provide for, or pay, any Federal or state
income taxes. Income tax attributes that arise from its operations are passed
directly to the individual partners. The Partnership may be subject to other
state and local taxes in jurisdictions in which it operates.
Profit and loss allocations and distributions
Net income (loss) from operations is allocated and cash from operations is
being distributed 99% to the limited partners and 1% to the General Partners.
Proceeds from the sale of the properties and liquidation of the Partnership
will be distributed in accordance with the Partnership Agreement.
Net income per limited partnership unit is based on 29,040 limited and
equivalent units outstanding, which excludes 147 equivalent units held by PBP
(see Note E) for which PBP has waived all of its rights therein. Per unit
amounts for 1993 have been restated to eliminate the equivalent units held by
PBP.
C. Property
The Partnership's property is comprised of the following:
<TABLE>
<CAPTION>
December 31,
--------------------------
<S> <C> <C>
1995 1994
---------- ----------
Hempstead--Houston, Texas $ 673,317 $ 704,707
I-35--Dallas, Texas 1,232,823 1,285,073
Northwest Highway--Dallas, Texas 1,151,936 1,203,131
Pasadena--Houston, Texas 705,242 620,403
Reinli--Austin, Texas 1,794,386 1,862,430
Santiago--Austin, Texas 1,493,017 1,540,981
---------- ----------
$7,050,721 $7,216,725
---------- ----------
---------- ----------
</TABLE>
For the years ended December 31, 1995, 1994 and 1993, respectively, the
following properties' rental revenues exceeded 15% of the Partnership's total
revenue:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Reinli 25 % 25% 24%
I-35 16 17 17
Northwest Highway * 17 17
Santiago 16 16 16
</TABLE>
* Property's rental revenue was 15% or less of the Partnership's total revenue
for the year.
No single tenant accounted for 10% or more of the total revenue for any of
the three years in the period ended December 31, 1995.
D. Minimum Future Lease Revenues
The Partnership earns a majority of its rental income from month-to-month and
other short-term leasing arrangements. The Partnership also has certain
noncancellable operating leases on the Partnership's properties. The minimum
future rental revenues receivable under these noncancellable operating leases
are approximately $685,000 and $61,000 for the years ended December 31, 1996 and
1997, respectively.
E. 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
7
<PAGE>
<PAGE>
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 years ended December 31, 1995, 1994 and 1993 were approximately $105,000,
$81,000 and $114,000, respectively.
Affiliates of Messrs. Watson and Taylor, the individual General Partners,
also perform certain administrative and monitoring functions on behalf of the
Partnership. In 1994, the Partnership recorded approximately $31,000 for the
reimbursement of certain prior periods' general, administrative and monitoring
expenses incurred by affiliates of the individual General Partners.
Approximately $21,000 was incurred in 1995.
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. Accordingly, the 147 units owned by PBP
have been excluded from the calculation of net income per limited partnership
unit and distributions per limited partnership unit.
Prudential Securities Incorporated (``PSI''), an affiliate of PBP, owns 406
limited partnership units at December 31, 1995.
F. Income Taxes
The following is a reconciliation of net income for financial reporting
purposes to net income for tax reporting purposes:
<TABLE>
<CAPTION>
December 31
------------------------------------
<S> <C> <C> <C>
1995 1994 1993
-------- --------- ---------
Net income per financial statements $854,210 $ 835,017 $ 754,148
Rent received in advance, net of reversal of prior year
amount (2,973) (14,297) (18,371)
Tax depreciation and amortization in excess of book amounts (122,193) (144,134) (222,284)
-------- --------- ---------
Tax basis net income $729,044 $ 676,586 $ 513,493
-------- --------- ---------
-------- --------- ---------
</TABLE>
The differences between the tax basis and book basis of partners' capital are
primarily attributable to the cumulative effect of the book to tax income
adjustments.
G. 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 was not named a defendant in the
consolidated complaint, but the name of the Partnership was listed as being
among the limited partnerships at issue in the case.
On August 9, 1995, PBP, PSI and other Prudential defendants entered into a
Stipulation and Agreement of Partial Compromise and Settlement with legal
counsel representing plaintiffs in the consolidated actions. The court
preliminarily approved the settlement agreement by order dated August 29, 1995
and, following a hearing held November 17, 1995, found that the agreement was
fair, reasonable, adequate and in the best interests of the plaintiff class. The
court gave final approval to the settlement, certified a class of purchasers of
specific limited partnerships, including the Partnership, released all settled
claims by members of the class against the PSI settling defendants and
permanently barred and enjoined class members from instituting, commencing or
prosecuting any settled claim against the released parties. The full amount due
under the settlement agreement has been paid by PSI.
H. Subsequent Event
In February 1996, distributions of approximately $243,000 and $ 2,000 were
paid to the limited partners and to the General Partners, respectively, for the
quarter ended December 31, 1995.
8
<PAGE>
<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-I
(a limited partnership)
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. On December 15, 1995,
the Management Committee of the Partnership determined to seek bids for all the
properties held by the Partnership. As of March 22, 1996, preliminary bids have
been received for all properties. If bids for the properties are deemed
acceptable by the Partnership, the Partnership intends to enter into agreements
to sell the properties, subject to the approval of the limited partners owning a
majority of the Units as required by the Partnership Agreement. If such sales
are approved and consummated, the Partnership will liquidate and distribute its
net assets to its partners. There can, of course, be no assurance that
acceptable bids will be received or that any transactions will be consummated.
During the year ended December 31, 1995, the Partnership's cash and cash
equivalents increased by approximately $79,000 due to cash flow from property
operations in excess of capital expenditures and distributions to partners.
Distributions during the year ended December 31, 1995 totaled approximately
$980,000, of which $970,000 was paid to the limited partners and $10,000 to the
General Partners. These distributions were funded from property operations.
The Partnership's ability to make future distributions to the partners and
the amount that may be made will be affected not only by the amount of cash
generated by the Partnership from operations of its properties, but also by the
amount expended for property improvements and the amount set aside for
anticipated property improvements. Property improvements are currently budgeted
at approximately $150,000 for 1996.
Results of Operations
Average occupancy rates for the years ended December 31, 1995, 1994 and 1993
were as follows:
<TABLE>
<CAPTION>
December 31,
----------------------
Property 1995 1994 1993
<S> <C> <C> <C>
- -----------------------------------------------
Hempstead 89.3% 89.7% 85.8%
Pasadena 87.8 85.1 86.8
Northwest Highway 90.3 89.9 85.6
I-35 91.6 91.5 91.0
Santiago 95.5 94.6 92.7
Reinli 95.6 96.3 96.4
- -----------------------------------------------
</TABLE>
(Average occupancy rates are calculated by
averaging the monthly occupancies determined by
dividing occupied square footage by available
square footage as of each month-end.)
1995 vs 1994
Net income increased by $19,000 for the year ended December 31, 1995 as
compared to the year ended December 31, 1994 for the reasons discussed below.
Rental income increased by approximately $109,000 for the year ended December
31, 1995 as compared to the year ended December 31, 1994. The increase in rental
income is primarily due to higher rental rates at all the properties.
Property operating expenses increased by approximately $44,000 for the year
ended December 31, 1995 compared to the year ended December 31, 1994. This is
due primarily to increases in property level payroll costs at all of the
properties and an increase in utility expense at Reinli and Northwest Highway
partially offset by decreases in repairs and maintenance expense at Hempstead
and Pasadena. Management fees also increased because they are based on rental
income.
9
<PAGE>
<PAGE>
General and administrative expenses increased by approximately $12,000 for
the year ended December 31, 1995 as compared to the year ended December 31, 1994
primarily due to increased professional fees and higher costs associated with
administering the Partnership.
1994 vs 1993
Net income increased by approximately $81,000 for the year ended December 31,
1994 as compared to the year ended December 31, 1993 for the reasons discussed
below.
Rental income increased by approximately $104,000 for the year ended December
31, 1994 as compared to the year ended December 31, 1993. Rental income
increased at the I-35 and Reinli properties due to higher rental rates; and at
the Northwest Highway and Santiago properties due to higher average occupancies.
Rental income decreased at the Pasadena property because of lower rental rates.
Rental income at the Hempstead property remained stable as the effect of higher
average occupancy rates was offset by lower rental rates.
Property operating expenses increased by approximately $88,000 for the year
ended December 31, 1994 compared to the year ended December 31, 1993 due
primarily to an increase in property level payroll costs, insurance and utility
rates and repairs and maintenance expenses for projects at the Hempstead and
Santiago properties.
General and administrative expenses decreased approximately $60,000 for the
year ended December 31, 1994 as compared to the year ended December 31, 1993
primarily due to a decrease in legal costs.
10
<PAGE>
<PAGE>
OTHER INFORMATION
The Partnership's Annual Report on Form 10-K as filed with the Securities and
Exchange Commission is available to limited partners without charge upon written
request to:
Prudential-Bache/Watson & Taylor, Ltd.-I
P.O. Box 2016
Peck Slip Station
New York, New York 10272-2016
11
<PAGE>
<PAGE>
Peck Slip Station
BULK RATE
P.O. Box 2016
U.S. POSTAGE
New York, NY 10272
PAID
Automatic Mail
PBW&T1/171640
<PAGE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial
information extracted from the financial
statements for P-B Watson & Taylor Ltd 1
and is qualified in its entirety by reference
to such financial statements
</LEGEND>
<RESTATED>
<CIK> 0000708320
<NAME> P-B Watson & Taylor Ltd 1
<MULTIPLIER> 1
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-1-1995
<PERIOD-END> Dec-31-1995
<PERIOD-TYPE> 12-Mos
<CASH> 838,954
<SECURITIES> 0
<RECEIVABLES> 7,782
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 12,989,274
<DEPRECIATION> (5,938,553)
<TOTAL-ASSETS> 7,897,457
<CURRENT-LIABILITIES> 481,737
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 7,415,720
<TOTAL-LIABILITY-AND-EQUITY> 7,897,457
<SALES> 0
<TOTAL-REVENUES> 2,432,565
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,578,355
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 854,210
<INCOME-TAX> 0
<INCOME-CONTINUING> 854,210
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 854,210
<EPS-PRIMARY> 29.12
<EPS-DILUTED> 0
</TABLE>
