<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 September 30, 1994
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: 0-12045
PRUDENTIAL ACQUISITION FUND I, L.P.
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3173903
- - --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
100 Gold Street, New York, NY 10292
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 214-6868
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 __
<PAGE>
Part I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PRUDENTIAL ACQUISITION FUND I, L.P.
(a limited partnership)
STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
<S> <C> <C>
- - ----------------------------------------------------------------------------------------------------
ASSETS
Investment in property:
Land $ 4,859,521 $ 4,859,521
Buildings and improvements 33,679,620 33,534,060
Less: accumulated depreciation (15,907,123 ) (14,877,560)
allowance for loss on impairment of assets (3,100,000 ) (3,100,000)
Investment in joint venture, net 10,627,405 11,112,351
------------- ------------
Net investment in property and joint venture 30,159,423 31,528,372
Cash and cash equivalents 807,945 72,733
Deferred rent 526,409 533,669
Other assets 9,238 41,150
------------- ------------
Total assets $ 31,503,015 $ 32,175,924
------------- ------------
------------- ------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable and accrued expenses $ 408,365 $ 288,011
Tenant security deposits 18,870 18,523
------------- ------------
Total liabilities 427,235 306,534
------------- ------------
Partners' capital
Limited partners (70,124 units issued and outstanding) 31,075,780 31,869,390
General partners -- --
------------- ------------
Total partners' capital 31,075,780 31,869,390
------------- ------------
Total liabilities and partners' capital $ 31,503,015 $ 32,175,924
------------- ------------
------------- ------------
- - ----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements
</TABLE>
2
<PAGE>
PRUDENTIAL ACQUISITION FUND I, L.P.
(a limited partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Nine months Three months
ended September 30, ended September 30,
------------------------- -------------------------
1994 1993 1994 1993
<S> <C> <C> <C> <C>
- - -----------------------------------------------------------------------------------------------------
REVENUES
Rental income $2,295,758 $2,126,148 $ 755,804 $ 733,295
Recovery of expenses 700,336 751,173 239,081 274,078
Interest income 10,329 5,771 5,951 908
Joint venture equity income (loss) 28,054 (82,915) (9,125) 60,226
---------- ---------- ---------- ----------
3,034,477 2,800,177 991,711 1,068,507
---------- ---------- ---------- ----------
EXPENSES
Depreciation 1,029,563 1,195,973 306,516 390,956
Property operating 998,898 976,660 357,138 348,548
Real estate taxes 437,075 474,724 127,642 153,977
General and administrative 184,140 187,868 47,740 70,058
---------- ---------- ---------- ----------
2,649,676 2,835,225 839,036 963,539
---------- ---------- ---------- ----------
Net income (loss) $ 384,801 $ (35,048) $ 152,675 $ 104,968
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
ALLOCATION OF NET INCOME (LOSS)
Limited partners $ 266,960 $ (137,309) $ 107,874 $ 70,881
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
General partners $ 117,841 $ 102,261 $ 44,801 $ 34,087
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income (loss) per limited partnership
unit $ 3.81 $ (1.96) $ 1.54 $ 1.01
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
- - -----------------------------------------------------------------------------------------------------
</TABLE>
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
(Unaudited)
<TABLE>
<CAPTION>
LIMITED GENERAL
PARTNERS PARTNERS TOTAL
<S> <C> <C> <C>
- - ---------------------------------------------------------------------------------------------------
Partners' capital--December 31, 1993 $31,869,390 $ -- $31,869,390
Net income 266,960 117,841 384,801
Distributions (1,060,570) (117,841) (1,178,411)
----------- -------- -----------
Partners' capital--September 30, 1994 $31,075,780 $ -- $31,075,780
----------- -------- -----------
----------- -------- -----------
- - ---------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements
</TABLE>
3
<PAGE>
PRUDENTIAL ACQUISITION FUND I, L.P.
(a limited partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine months
ended September 30,
-------------------------
<S> <C> <C>
1994 1993
- - --------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Rental income received $2,307,906 $1,818,284
Recovery of expenses 727,360 747,482
Interest received 10,329 5,771
Tenant security deposits received (returned) 347 (15,406)
Real estate taxes paid (309,721) (317,814)
Operating expenses paid (1,031,324) (1,066,386)
General and administrative expenses paid (158,714) (183,321)
Distributions from joint venture 513,000 675,000
---------- ----------
Net cash provided by operating activities 2,059,183 1,663,610
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capitalized property expenditures (145,560) (934,416)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions (1,178,411) (1,022,516)
---------- ----------
Net increase (decrease) in cash and cash equivalents 735,212 (293,322)
Cash and cash equivalents at beginning of period 72,733 571,531
---------- ----------
Cash and cash equivalents at the end of period $ 807,945 $ 278,209
---------- ----------
---------- ----------
- - --------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
RECONCILIATION OF NET INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Net income (loss) $ 384,801 $ (35,048)
---------- ----------
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation 1,029,563 1,195,973
Distributions from joint venture 513,000 675,000
Joint venture equity (income) loss (28,054) 82,915
Changes in:
Deferred rent 7,260 (317,760)
Other assets 31,912 6,205
Accounts payable and accrued expenses 120,354 71,731
Tenant security deposits 347 (15,406)
---------- ----------
Total adjustments 1,674,382 1,698,658
---------- ----------
Net cash provided by operating activities $2,059,183 $1,663,610
---------- ----------
---------- ----------
- - --------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements
</TABLE>
4
<PAGE>
PRUDENTIAL ACQUISITION FUND I, L.P.
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1994
(Unaudited)
A. Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions for Form 10-Q and Rule 10-01 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for annual financial
statements. In the opinion of management, all adjustments (consisting of only
normal recurring adjustments) considered necessary for a fair presentation of
the financial position of Prudential Acquisition Fund I, L.P. (the
``Partnership'') as of September 30, 1994, the results of its operations for the
nine and three months ended September 30, 1994 and 1993 and its cash flows for
the nine months ended September 30, 1994 and 1993 have been included. Operating
results for the interim periods may not be indicative of the results expected
for the full year. It is suggested that these financial statements be read in
conjunction with the financial statements and footnotes 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, 1993.
B. Related Parties
The general partners and their affiliates perform services for the
Partnership which include, but are not limited to: accounting and financial
management; registrar, transfer and assignment functions; asset management;
investor communications; printing and other administrative services. The amount
of reimbursement from the Partnership is limited by the provisions of the
Partnership Agreement. The approximate costs and expenses incurred on behalf of
the Partnership which are reimbursable to the general partners and their
affiliates are:
<TABLE>
<CAPTION>
Nine months Three months
ended September 30, ended September 30,
--------------------- --------------------
1994 1993 1994 1993
<S> <C> <C> <C> <C>
- - -----------------------------------------------------------------------------------------------------
Prudential Realty Partnerships, Inc. and affiliates $ 31,000 $ 32,700 $ 10,000 $ 12,800
Prudential-Bache Properties, Inc. and affiliates 60,700 75,200 18,700 26,600
-------- --------- -------- --------
$ 91,700 $ 107,900 $ 28,700 $ 39,400
-------- --------- -------- --------
-------- --------- -------- --------
</TABLE>
Expenses payable to the general partners and their affiliates (which are
included in accrued expenses) as of September 30, 1994 and December 31, 1993 are
approximately $79,800 and $66,700, respectively.
Prudential Securities Incorporated, an affiliate of the general partners,
owns 125 limited partnership units at September 30, 1994.
5
<PAGE>
C. Investment in Joint Venture
The Partnership has a 54% interest in a joint venture with an affiliated
limited partnership. Presented below is summarized financial information for the
joint venture:
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
<S> <C> <C>
- - ----------------------------------------------------------------------------------------------------
Assets
Investment in property:
Land $ 4,422,957 $ 4,422,957
Buildings and improvements 29,298,681 29,287,087
Less: accumulated depreciation (15,236,242 ) (13,952,485)
------------- ------------
Net investment in property 18,485,396 19,757,559
Accounts receivable, net 599,361 592,024
Cash and cash equivalents 1,695,299 571,427
------------- ------------
Total assets $ 20,780,056 $ 20,921,010
------------- ------------
------------- ------------
Liabilities and partners' capital
Total liabilities $ 1,117,005 $ 366,330
------------- ------------
Partners' capital
Prudential Acquisition Fund I, L.P. 10,572,904 11,054,384
Prudential Realty Acquisition Fund II, L.P. 9,090,147 9,500,296
------------- ------------
Total partners' capital 19,663,051 20,554,680
------------- ------------
Total liabilities and partners' capital $ 20,780,056 $ 20,921,010
------------- ------------
------------- ------------
</TABLE>
<TABLE>
<CAPTION>
Nine months ended Three months ended
September 30, September 30,
------------------------------ ------------------------------
1994 1993 1994 1993
<S> <C> <C> <C> <C>
- - ---------------------------------------------------------------------------------------------------------
Revenues
Rental income $ 1,925,637 $1,948,001 $ 642,996 $578,279
Recovery of expenses 905,276 861,604 298,918 250,328
Interest income 39,342 38,488 19,018 13,353
------------- ------------ ------------- ------------
2,870,255 2,848,093 960,932 841,960
------------- ------------ ------------- ------------
Expenses
Depreciation and amortization 1,391,554 1,218,796 488,685 411,326
Property operating 729,052 958,969 260,635 95,703
Real estate taxes 610,162 728,316 203,290 190,630
General and administrative 81,118 89,444 23,081 30,934
------------- ------------ ------------- ------------
2,811,886 2,995,525 975,691 728,593
------------- ------------ ------------- ------------
Net income (loss) $ 58,369 $ (147,432) $ (14,759) $113,367
------------- ------------ ------------- ------------
------------- ------------ ------------- ------------
</TABLE>
D. Contingencies
On or about October 18, 1993, a putative class action, captioned Kinnes et
al. v. Prudential Securities Group Inc. et al. (93 Civ 654), was filed in the
United States District Court for the District of Arizona, purportedly on behalf
of investors in the Partnership against the Partnership, Prudential-Bache
Properties, Inc. (``PBP''), Prudential Securities Incorporated and a number of
other defendants.
6
<PAGE>
By order of the Judicial Panel on Multidistrict Litigation dated April 14,
1994, the Kinnes case, together with a number of other actions not involving the
Partnership, were transferred to a single judge of the United States District
Court for the Southern District of New York and consolidated under the caption
In re Prudential Securities Incorporated Limited Partnerships Litigation (MDL
Docket No. 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, Prudential Securities Incorporated, 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 Racketeer Influenced and Corrupt
Organizations Act (``RICO''), fraud, negligent misrepresentation, breach of
fiduciary duties, breach of third-party beneficiary contracts, breach of implied
covenants and violations of New Jersey statutes 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 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.
The general partners and Prudential Securities Incorporated believe they have
meritorious defenses to the complaints and intend to vigorously defend these
actions. Pursuant to the terms of the Partnership Agreement, the general
partners may be entitled to indemnification for any loss suffered as a result of
these actions, including attorneys' fees.
PBP is named as a defendant, together with other parties, in pending legal
proceedings involving other limited partnerships in which it is a general
partner. Although a number of cases have been resolved, others are still
pending. PBP intends to defend itself vigorously against these actions.
E. Subsequent Event
In November 1994, a distribution of approximately $536,000 was paid to the
partners for the quarter ended September 30, 1994. Limited partners received a
total of approximately $482,000, which represents $6.875 per unit, and the
general partners received the remainder.
7
<PAGE>
PRUDENTIAL ACQUISITION FUND I, L.P.
(a limited partnership)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
General Market Conditions
The Partnership has a real estate investment portfolio consisting of two
office buildings, a warehouse and an equity interest in a joint venture (the
``Joint Venture'') which owns two shopping centers.
While improving somewhat recently, the real estate markets continue to suffer
from an oversupply of rentable commercial space. The oversupply results in
increased competition for tenants, reduced rental rates on new leases and
renewals, significant concessions (including initial free-rent periods and
allowances for space-improvement), higher levels of capital improvement in order
to increase the attractiveness of the facilities to new and existing tenants,
and longer periods before acceptable leases can be negotiated and the properties
occupied. These conditions continue to adversely affect the Partnership's
results of operations and liquidity as well as the amounts available for
distributions.
Liquidity and Capital Resources
Cash distributions from the Joint Venture, rental revenue from the
Partnership's directly-owned properties and interest earned on short-term
investments have provided, and are anticipated to continue to provide,
sufficient liquidity to meet expenses incurred by the Partnership and its
properties.
During the nine months ended September 30, 1994, the Partnership's cash and
cash equivalents increased by approximately $735,000 primarily as a result of
increased rental receipts, the timing of payments and reduced capital
expenditures. The Joint Venture, in which the Partnership has a 54% interest,
has cash and cash equivalents of approximately $1,695,000 at September 30, 1994
as compared to approximately $571,000 at December 31, 1993. This amount is
anticipated to be sufficient to pay outstanding liabilities, fund capital
expenditures (including leasing commissions and tenant improvements) at the
Joint Venture properties and provide additional cash distributions to the
Partnership. Cash distributions to the Partnership from the Joint Venture
totalled $513,000 for the nine months ended September 30, 1994 and $675,000
during the nine months ended September 30, 1993. The level of distributions of
cash from the Joint Venture is impacted by the operating results of the
underlying properties as well as the levels of cash reserves maintained by the
Joint Venture.
In connection with the capital improvements which are discussed below, the
amount of actual expenditures and their timing will depend on the success of
leasing efforts, the nature and timing of new leases and lease renewals, ongoing
evaluation of the need for the planned improvements and optimal timing of their
implementation as well as general market conditions.
Cash Distributions
Cash distributions paid to the limited and general partners during the nine
months ended September 30, 1994 totalled approximately $1,178,000, of which the
limited partners received approximately $1,061,000 ($15.12 per unit) and the
general partners received the remainder. These distributions represent payments
from current and prior undistributed cash flow from operations. For the
corresponding period in 1993, total distributions of approximately $1,023,000
were paid to the limited and general partners, of which the limited partners
received approximately $920,000 ($13.12 per unit) and the general partners
received the remainder.
The amount of cash generated by the Partnership from operations of the
directly-owned and Joint Venture properties, the amount expended for capital
improvements and the amount of reserves set aside for anticipated capital
improvements, could affect the Partnership's ability to make future
distributions to the partners and the amount of the distributions that may be
made.
Capital Improvements--Directly-Owned Properties
For the nine months ended September 30, 1994, the Partnership expended
approximately $146,000 on capital improvements, principally at Norwest Center
for building improvements. Budgeted capital expenditures for the directly-owned
properties for the remainder of 1994 are $109,000. This includes approximately
$93,000 in anticipated tenant improvements and leasing commissions and $16,000
for improvements
8
<PAGE>
<PAGE>
necessary to maintain the properties. These capital improvements will be funded
from undistributed cash balances and cash derived from future operations.
Capital Improvements--Joint Venture
For the nine months ended September 30, 1994, the Joint Venture expended
approximately $120,000 on building and tenant improvements. Budgeted capital
expenditures for the Joint Venture for the remainder of 1994 are $240,000 which
includes approximately $221,000 in anticipated leasing commissions and tenant
improvements and $19,000 for improvements necessary to maintain the properties.
These capital improvements will be funded from cash balances and cash derived
from future operations.
Results of Operations
The Partnership's net income for the nine and three months ended September
30, 1994 increased by approximately $420,000 and $48,000 compared to the
corresponding periods in 1993 as discussed below.
Directly-Owned Properties
The Norwalk Industrial Park was 100% occupied as of September 30, 1994 and
1993. Rental income at Norwalk for the nine months ended September 30, 1994
increased by approximately $165,000 as compared to the corresponding period in
1993. The increase in rental income mainly resulted from unoccupied space for
the first two months of 1993. Operating expenses for the nine months ended
September 30, 1994 decreased by approximately $12,000 as compared to the
corresponding period in 1993. The decrease in operating expenses was mainly due
to utility costs being charged directly to the new tenant as well as
non-recurring repair and maintenance charges incurred in 1993 to prepare for the
new tenant.
The Norwest Center property in Rochester, Minnesota was 91% and 96% occupied
as of September 30, 1994 and 1993, respectively. During the first quarter of
1994, a tenant vacancy resulted in an 8% decrease in occupancy from the fourth
quarter in 1993. No significant leases are scheduled to expire during the next
twelve months. Rental income for the nine and three months ended September 30,
1994 decreased by approximately $64,000 and $3,000, respectively, as compared to
the corresponding periods in 1993 primarily the result of decreased occupancy.
Property operating expenses increased by approximately $17,000 and $5,000 for
the nine and three months ended September 30, 1994, respectively, as compared to
the corresponding periods in 1993 primarily due to higher professional fees.
The One Executive Center office property in Albuquerque, New Mexico was 100%
and 98% occupied as of September 30, 1994 and 1993, respectively. During the
next twelve months, nine leases representing 29% of the rentable area are
scheduled to expire. Rental income for the nine and three months ended September
30, 1994 increased by approximately $69,000 and $28,000 as compared to the
corresponding periods in 1993 due to increased rates. Operating expenses for the
nine months ended September 30, 1994 increased by approximately $17,000 as
compared to the corresponding period in 1993, primarily as a result of higher
utility and administrative labor costs.
Joint Venture Properties
As of September 30, 1994, Pine Island and Ridge Plaza were 93% and 89%
leased, respectively, as compared to 84% and 64% as of September 30, 1993. There
are no significant leases scheduled to expire at either property during the next
twelve months.
Efforts continue to market Ridge Plaza as an entertainment center. Leasing
efforts are currently targeted towards tenants that provide indoor
sports-related and other leisure-time activities and supporting services. The
leasing of entertainment space involves a substantial and sustained marketing
effort which has and will continue to involve significant tenant concessions.
Although Ridge Plaza has experienced significant increased occupancy since 1993,
rental rates remain depressed in the current competitive environment.
The Partnership's joint venture equity income increased by approximately
$111,000 for the nine months ended September 30, 1994 but decreased by
approximately $69,000 for the three months ended September 30, 1994 as compared
to the corresponding periods in 1993.
Total revenues increased by approximately $22,000 and $119,000 for the nine
and three months ended September 30, 1994 as compared to the corresponding
periods in 1993 primarily as a result of increased occupancy at both properties.
Operating expenses for the nine months ended September 30, 1994 decreased by
approximately $230,000 but increased by approximately $165,000 for the three
months ended
9
<PAGE>
<PAGE>
September 30, 1994 as compared to the corresponding periods in 1993. The
decrease was attributable to lower provisions for doubtful accounts and lower
repair and maintenance charges. The increase was mainly due to a collection in
1993 of a receivable from a former tenant, which had been previously
written-off.
Real estate taxes for the nine months ended September 30, 1994 decreased by
approximately $118,000 as compared to the corresponding period in 1993 primarily
because of a 1993 payment of past due taxes owed by a vacated tenant.
Depreciation and amortization expense increased by approximately $173,000 and
$77,000 for the nine and three months ended September 30, 1994, respectively, as
compared to the corresponding periods in 1993. The increase in depreciation was
primarily as a result of the write-off of a vacated outparcel and related tenant
improvements at Ridge Plaza in the first quarter of 1994. The outparcel was
demolished to provide additional parking at the Joint Venture's properties.
Additionally, a tenant with a new ten-year lease has notified the Joint Venture
it will not occupy their space. Negotiations have commenced with the tenant
relating to a buy-out of the lease. As a result, depreciation expense for the
third quarter included the write-off of related tenant improvements and leasing
commissions of approximately $108,000. These increases were offset by the effect
of a write-down of the Joint Venture properties in 1993 which lowered
depreciation expense for all subsequent periods.
10
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings--
This information is incorporated by reference to Note D 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--Not Applicable
Item 4. Submission of matters to a Vote of Security Holders--None
Item 5. Other Information--
On October 21, 1993, an affiliate of the co-general partner, Prudential
Securities Incorporated (``PSI''), settled, without admitting or denying
the allegations contained therein, civil and administrative proceedings
with the Securities and Exchange Commission, the National Association of
Securities Dealers, Inc, and various state regulators. These proceedings
concerned, among other things, the sale by PSI of limited partnership
interests, including interests of the Registrant, during the period 1980
through 1990. The settlement has no impact on the Registrant itself.
On October 27, 1994, PSI entered into cooperation and deferred
prosecution agreements (the ``Agreements'') with the Office of
the United States Attorney for the Southern District of New York (the
``U.S. Attorney''). The Agreements resolved a grand jury investigation
that had been conducted by the U.S. Attorney into PSI's sale during
the 1980's of the Prudential-Bache Energy Income Fund oil and gas
limited partnerships (the ``Income Funds''). In connection with the
Agreements, the U.S. Attorney filed a complaint charging PSI with a
criminal violation of the securities laws. In its request for a
deferred prosecution, PSI acknowledged to having made certain
misstatements in connection with the sale of the Income Funds. Pursuant
to the Agreements, the U.S. Attorney will defer any prosecution of the
charge in the complaint for a period of three years, provided that PSI
complies with certain conditions during the three year period. These
include conditions that PSI not violate any criminal laws; that PSI
contribute an additional $330 million to a pre-existing settlement
fund; that PSI cooperate with the government in any future inquiries;
and that PSI comply with various compliance-related provisions. If,
at the end of the three-year period, PSI has complied with the terms
of the Agreements, the U.S. Attorney will be barred from prosecuting
PSI on the charges set forth in the complaint. If, on the other hand,
during the course of the three-year period, PSI violates the terms of
the Agreements, the U.S. Attorney can elect to pursue such charges.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
Description:
3 and 4 Amended and Restated Agreement of Limited Partnership(1)
Amendment to Limited Partnership Agreement dated as of January 1,
1987(2)
b. Reports on Form 8-K--None
- - ---------------
(1) Incorporated by reference to Prospectus dated July 1, 1983 as filed with the
Commission pursuant to Rule 424(b) under the Securities Act of 1933
(2) Incorporated by reference to Exhibits 3 and 4 of the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1988
11
<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 Acquisition Fund I, L.P.
By: Prudential-Bache Properties, Inc.
A Delaware corporation, General Partner
By: /s/ Robert J. Alexander Date: November 11, 1994
-----------------------------------------
Robert J. Alexander
Vice President
Chief Accounting Officer for the
Registrant
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial
information extracted from the financial
statements for Prudential Acquisition
Fund I, L.P. and is qualified in its
entirety by reference to such
financial statements
</LEGEND>
<RESTATED>
<CIK> 0000717319
<NAME> Prudential Acquisition Fund I, L.P.
<MULTIPLIER> 1
<PERIOD-START> Jan-01-1994
<PERIOD-END> Sep-30-1994
<FISCAL-YEAR-END> Dec-31-1994
<PERIOD-TYPE> 9-MOS
<CASH> 807,945
<SECURITIES> 0
<RECEIVABLES> 535,647
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 46,066,546
<DEPRECIATION> 15,907,123
<TOTAL-ASSETS> 31,503,015
<CURRENT-LIABILITIES> 427,235
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 31,075,780
<TOTAL-LIABILITY-AND-EQUITY> 31,503,015
<SALES> 3,034,477
<TOTAL-REVENUES> 3,034,477
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,649,676
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 384,801
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
