<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 June 30, 1999 Commission File Number 0-12210
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PRESIDENTIAL ASSOCIATES I LIMITED PARTNERSHIP
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(exact name of small business issuer as specified in its charter)
Maryland 04-2801764
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Five Cambridge Center, Cambridge, MA 02142
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(Address of principle executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 234-3000
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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
December 31,
June 30, 1999 1998
(Unaudited) (Audited)
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ASSETS
Assets
Cash and cash equivalents $ 527,559 $ 186,610
Due from Operating Partnership 37,518 173,404
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Total assets $ 565,077 $ 360,014
========= =========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities and partners' capital
Partners' capital $ 565,077 $ 360,014
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Total liabilities and partners' capital $ 565,077 $ 360,014
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See notes to financial statements
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PRESIDENTIAL ASSOCIATES I LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
-------------------------- --------------------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
INCOME:
Interest $ 2,683 $ 1,877 $ 5,161 $ 3,676
Distribution from Operating
Partnership 200,036 161,706 200,036 161,706
-------- -------- -------- --------
202,719 163,583 205,197 165,382
-------- -------- -------- --------
EXPENSES:
Other expenses 134 -- 134 --
-------- -------- -------- --------
Total operating expenses 134 -- 134 --
-------- -------- -------- --------
Net income $202,585 $163,583 $205,063 $165,382
======== ======== ======== ========
Net income per unit of limited
partnership interest outstanding
(590 units issued and outstanding) $ 340 $ 275 $ 344 $ 278
======== ======== ======== ========
</TABLE>
See notes to financial statements
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PRESIDENTIAL ASSOCIATES I LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
Linnaeus-
Phoenix
For the Six Months Ended Winthrop Associates Investor Total
June 30, 1999 and 1998 Financial Limited Limited Partners'
(Unaudited) Co., Inc. Partnership Partners Capital
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Balance, December 31, 1998 $(270,262) $(572,171) $ 1,202,447 $ 360,014
Net income 1,025 1,025 203,013 205,063
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Balance, June 30, 1999 $(269,237) $(571,146) $ 1,405,460 $ 565,077
========== ========== =========== =========
Balance, December 31, 1997 $(270,579) $(572,488) $ 1,136,507 $ 293,440
Net income 827 827 163,728 165,382
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Balance, June 30, 1998 $(269,752) $(571,661) $ 1,300,235 $ 458,822
========== ========== =========== =========
</TABLE>
See notes to financial statements
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<PAGE>
PRESIDENTIAL ASSOCIATES I LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
For the Six Months Ended
June 30, 1999 and 1998 (Unaudited) 1999 1998
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<S> <C> <C>
Cash flow from operating activities:
Net income $ 205,063 $ 165,382
Adjustments to reconcile net income to net cash provided
by operating activities:
(Increase) decrease in due from Operating Partnership 135,886 (28,895)
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Net cash provided by operating activities 340,949 136,487
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Cash and cash equivalents at beginning of period 186,610 249,420
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Cash and cash equivalents at end of period $ 527,559 $ 385,907
========= =========
</TABLE>
See notes to financial statements
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<PAGE>
PRESIDENTIAL ASSOCIATES I LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
(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 are in conformity 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
financial statements be read in conjunction with the financial statements and
the notes thereto included in the Partnership's Annual Report on Form 10-KSB for
the year ended December 31, 1998.
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, 1999.
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.
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PRESIDENTIAL ASSOCIATES I LIMITED PARTNERSHIP
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This Item should be read in conjunction with the financial statements and other
items contained elsewhere in the report.
Liquidity and Capital Resources
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 six months ended June 30, 1999 and June 30, 1998, the Operating
Partnership made distributions to the Partnership of $200,036 and $161,706,
respectively. 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.
The Partnership's liquidity based on cash and cash equivalents increased to
$527,559 at June 30, 1999 as compared to $186,610 at December 31, 1998, due
primarily to the distribution received from the Operating Partnership and the
repayment of receivables due from the Operating Partnership.
Results of Operations
Operating results increased by $39,681 for the six months ended June 30, 1999,
as compared to the six months ended June 30, 1998, due to an increase in
distributions from the Operating Partnership in 1999. The majority of the
expenses of the Partnership incurred to date in 1999 will be reimbursed by the
Operating Partnership.
Year 2000
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. The Partnership is
dependent upon the General Partner and its affiliates and Coordinated Services
for management and administrative services. Any computer programs or hardware
that have date-sensitive software or embedded chips may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
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<PAGE>
PRESIDENTIAL ASSOCIATES I LIMITED PARTNERSHIP
During the first half of 1998, Coordinated Services, the General Partner and its
affiliates completed their assessment of the various computer software and
hardware used in connection with the management of the Partnership. This review
indicated that significantly all of the computer programs used by Coordinated
Services, the General Partner and its affiliates are off-the-shelf "packaged"
computer programs which are easily upgraded to be Year 2000 compliant. In
addition, to the extent that custom programs are utilized by Coordinated
Services, the General Partner and its affiliates, such custom programs are Year
2000 compliant.
Following the completion of its assessment of the computer software and
hardware, Coordinated Services, the General Partner and its affiliates began
upgrading those systems which required upgrading. To date, significantly all of
these systems have been upgraded. The Partnership has to date not borne, nor is
it expected that the Partnership will bear any significant cost, in connection
with the upgrade of those systems to requiring remediation. All systems have
been remediated, tested and implemented during the first half of 1999.
To date, neither Coordinated Services no the General Partner are aware of any
external agent, including local general partners, with a Year 2000 issue that
would materially impact the Partnership's results of operations, liquidity or
capital resources. However, Coordinated Services and the General Partner have no
means of ensuring that external agents will be Year 2000 compliant. The General
Partner does not believe that the inability of external agents to complete their
Year 2000 resolution process in a timely manner will have a material impact on
the financial position or results of operations of the Partnership. However, the
effect of non-compliance by external agents is not readily determinable.
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<PAGE>
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 filed as an Exhibit to this
report
b) Reports on Form 8-K
No report on Form 8-K was required to be filed during the period
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<PAGE>
PRESIDENTIAL ASSOCIATES I LIMITED PARTNERSHIP
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
(Partnership)
By: Winthrop Financial Co., Inc.
One of its General Partners
Date: August 4, 1999 By: /s/ Thomas C. Staples
----------------------
Thomas C. Staples
Chief Financial Officer
Date: August 4, 1999 By: /s/ Michael L. Ashner
----------------------
Michael L. Ashner
Chief Executive Officer
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Presidential
Associates I Limited Partnership and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 527,559
<SECURITIES> 0
<RECEIVABLES> 37,518
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 565,077
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 565,077
<SALES> 0
<TOTAL-REVENUES> 202,719
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 202,585
<INCOME-TAX> 0
<INCOME-CONTINUING> 202,585
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 202,585
<EPS-BASIC> 340
<EPS-DILUTED> 340
</TABLE>
