<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1997 Commission File Number 0-12210
PRESIDENTIAL ASSOCIATES I LIMITED PARTNERSHIP
(exact name of small business issuer as specified in its charter)
Maryland 04-2801764
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Five Cambridge Center, Cambridge, MA 02142
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 234-3000
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
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PRESIDENTIAL ASSOCIATES I LIMITED PARTNERSHIP
PART 1 - FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
BALANCE SHEETS
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September 30, December 31,
1997 1996
(Unaudited) (Audited)
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ASSETS
Assets
Cash and cash equivalents $101,434 $319,440
Due from Operating Partnership 42,394 14,020
-------- --------
Total Assets $143,828 $333,460
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LIABILITIES AND PARTNERS' CAPITAL
Liabilities and Partners' Capital
Accounts payable $ -- $ --
Partners' Capital 143,828 333,460
-------- --------
Total Liabilities and Partners' Capital $143,828 $333,460
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See notes to financial statements
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<TABLE>
<CAPTION>
PRESIDENTIAL ASSOCIATES I LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(UNAUDITED)
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For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1997 1996 1997 1996
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<S> <C> <C> <C> <C>
INCOME:
Interest $ 1,339 $ -- $ 6,989 $ --
Distribution from Operating
Partnership -- -- 104,603 92,804
-------- ----------- -------- --------
1,339 -- 111,592 92,804
EXPENSES:
Other expenses -- -- -- 739
-------- ----------- -------- --------
-- -- -- 739
-------- ----------- -------- --------
Net Income $ 1,339 $ -- $111,592 $ 92,065
======== =========== ======== ========
Net Income per unit of limited
partnership interest outstanding $ 2 $ -- $ 187 $ 154
======== =========== ======== ========
</TABLE>
See notes to financial statements
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PRESIDENTIAL ASSOCIATES I LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
<TABLE>
<CAPTION>
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Linnaeus-
Phoenix
For the Nine Months Ended Winthrop Associates Investor Total
September 30, 1997 and 1996 Financial Co., Limited Limited Partners'
(Unaudited) Inc. Partnership Partners Capital
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<S> <C> <C> <C> <C>
Balance December 31, 1996 $ (270,361) $ (572,270) $ 1,176,091 $ 333,460
Net Income 558 558 110,476 111,592
Distributions (1,524) (1,524) (301,756) (304,804)
Contributions -- -- 3,580 3,580
----------- ----------- ----------- -----------
Balance, September 30, 1997 $ (271,327) $ (573,236) $ 988,391 $ 143,828
=========== =========== =========== ===========
Balance December 31, 1995 $ (271,513) $ (573,422) $ 947,914 $ 102,979
Net income 460 460 91,145 92,065
----------- ----------- ----------- -----------
Balance, September 30, 1996 $ (271,053) $ (572,962) $ 1,039,059 $ 195,044
=========== =========== =========== ===========
</TABLE>
See notes to financial statements
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PRESIDENTIAL ASSOCIATES I LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
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For the Nine Months Ended
September 30, 1997 and 1996 (Unaudited) 1997 1996
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<S> <C> <C>
Cash flow from operating activities:
Net income $ 111,592 $ 92,065
Adjustments to reconcile net income to
net cash provided by operating activities:
Increase in due from operating partnership (28,374) (2,497)
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Net cash provided by operating activities 83,218 89,568
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Cash flows from Financing Activities:
Partner distributions (304,804) --
Contributions 3,580 --
Payment of loans from affiliates -- (20,082)
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Net cash used in financing activities (301,224) (20,082)
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Net (decrease) increase in cash and cash equivalents (218,006) 69,486
--------- ---------
Cash and cash equivalents at beginning of period 319,440 121,409
--------- ---------
Cash and cash equivalents at end of period $ 101,434 $ 190,895
========= =========
</TABLE>
See notes to financial statements
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PRESIDENTIAL ASSOCIATES I LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
1. ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein have been prepared by the
Partnership, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. The Partnership's accounting and financial
reporting policies conform with generally accepted accounting principles and
include all adjustments in interim periods considered necessary for a fair
presentation of the results of operations. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. It is suggested that these condensed
financial statements be read in conjunction with the financial statements and
the notes thereto included in the Registrant's Annual Report on Form 10-KSB for
the year ended December 31, 1996.
The accompanying financial statements reflect the Partnership's results of
operations for an interim period and are not necessarily indicative of the
results of operations for the year ending December 31, 1997.
2. INVESTMENT IN OPERATING PARTNERSHIP
The Partnership accounts for its investment in Presidential Towers, Ltd. (the
"Operating Partnership") using the equity method of accounting. Under the equity
method of accounting, the initial investment is recorded at cost, increased or
decreased by the Partnership's share of income or losses, and decreased by
distributions. Equity in the loss of the Operating Partnership is no longer
recognized once the investment balance reaches zero.
The loss from the Operating Partnership, not recognized since the investment
balance reached zero, will be offset against the Partnership's share of future
income from the Operating Partnership.
3. TAXABLE INCOME (LOSS)
The Partnership's taxable income (loss) for 1997 is expected to differ from that
for financial reporting purposes primarily due to accounting differences in the
recognition of construction period costs and depreciation incurred by the
Operating Partnership.
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PRESIDENTIAL ASSOCIATES I LIMITED PARTNERSHIP
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This Item should be read in conjunction with the financial statements and other
items contained elsewhere in the report.
Liquidity and Capital Resources
The Partnership's primary source of liquidity is distributions from Presidential
Towers Ltd., an Illinois limited partnership (the "Operating Partnership"). The
Partnership is responsible for paying various administrative costs associated
with monitoring the Partnership's investment in the Operating Partnership, and
paying various professional fees associated with the affairs of the Partnership.
During the nine months ended September 30, 1997, the Operating Partnership made
a distribution of $104,603 to the Partnership. Pursuant to the terms of the
Regulatory Agreement governing the Operating Partnership, the Operating
Partnership is permitted to make semi-annual distributions from surplus cash. In
addition, the Partnership is entitled to receive an annual distribution from the
Operating Partnership as a reimbursement of the Partnership's administrative
expenses and professional fees up to an annual maximum of $30,000. Any future
distributions from the Operating Partnership are subject to the terms of the
Regulatory Agreement.
As a result of the restrictions set forth in the Regulatory Agreement on the
ability of the Operating Partnership to make distributions, the preferred return
required to be paid to TKI Presidential Partners and the Department of Housing
and Urban Development from a sale of the property, it is anticipated that
limited partners will not receive a return of all of their original investment
in the Partnership.
The Partnership's liquidity based on cash and cash equivalents decreased to
$101,434 at September 30, 1997 as compared to $319,440 at December 31, 1996 due
primarily to a distribution of $200,200 made out of cash reserves in April 1997.
It is expected that so long as the Partnership's administrative expenses do not
exceed $30,000 in any year, the Partnership's cash and cash equivalents will
remain relatively constant until the Operating Partnership is liquidated. Future
distributions to limited partners are contingent upon the receipt by the
Partnership of distributions from the Operating Partnership.
Results of Operations
Operating results improved by $19,527 for the nine months ended September 30,
1997 as compared to the nine months ended September 30, 1996 due to an increase
in interest income of $6,989 and an increase in distributions from the Operating
Partnership of $11,799. All expenses of the Partnership incurred to date in 1997
are being reimbursed by the Operating Partnership.
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PRESIDENTIAL ASSOCIATES I LIMITED PARTNERSHIP
PART II - OTHER INFORMATION
Item 6. Exhibit and reports on Form 8-K
A. EXHIBITS
Exhibit 27 - Financial Data Schedule
B. REPORTS ON FORM 8-K
No report on Form 8-K was required to be filed during the period.
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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.
PRESIDENTIAL ASSOCIATES I
LIMITED PARTNERSHIP
By: Winthrop Financial Co., Inc.
A General Partner
By: /s/ Edward V. Williams
-----------------------------
Edward V. Williams
Chief Financial Officer
By: /s/ Michael L. Ashner
-----------------------------
Michael L. Ashner
Chief Executive Officer
Dated: November 13, 1997
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from unaudited
financial statements for the nine month period ending September 30, 1997 and is
qualified in its entirety by reference to such financial statements
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 101,434
<SECURITIES> 0
<RECEIVABLES> 42,394
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 143,828
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 143,828
<TOTAL-LIABILITY-AND-EQUITY> 143,828
<SALES> 0
<TOTAL-REVENUES> 104,603
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 111,592
<INCOME-TAX> 0
<INCOME-CONTINUING> 111,592
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 111,592
<EPS-PRIMARY> 187.00
<EPS-DILUTED> 187.00
</TABLE>
