<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A Amendment #1
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission file number: 0-14271
PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP, A California Limited
Partnership
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(Exact name of Registrant as specified in its charter)
California 94-2949474
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(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
One Seaport Plaza, New York, N.Y. 10292-0128
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 214-1016
N/A
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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>
This Exhibit is being filed as amendment #1 to Form 10-Q due to
a change to paragraph 4 of Item 2. Management's Discussion and
Analysis of Financial Condition and Results of Operations regarding
the proposed sale of the properties.
<PAGE>
Part I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP,
A California Limited Partnership
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
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(in thousands)
<S> <C> <C>
ASSETS
Investment in property:
Land $ 10,842 $ 10,842
Buildings, improvements and equipment 40,881 40,545
Less: Accumulated depreciation (20,613 ) (19,634)
Allowance for loss on impairment of assets (500 ) (500)
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Net investment in property 30,610 31,253
Cash and cash equivalents 1,222 697
Prepaid expenses and other assets, net 1,126 1,396
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Total assets $ 32,958 $ 33,346
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LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Notes payable $ 26,650 $ 26,650
Due to affiliates 683 705
Accounts payable and accrued liabilities 365 266
Security deposits and deferred revenue 348 335
Real estate taxes payable 65 57
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Total liabilities 28,111 28,013
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Partners' capital
Unitholders (68,795 depositary units issued and outstanding) 5,106 5,587
General partners (259 ) (254)
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Total partners' capital 4,847 5,333
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Total liabilities and partners' capital $ 32,958 $ 33,346
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The accompanying notes are an integral part of these statements
</TABLE>
2
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PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP,
A California Limited Partnership
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the six months ended For the three months ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
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(in thousands, except for depositary unit amounts)
<S> <C> <C> <C> <C>
REVENUES
Operating $3,223 $3,055 $1,622 $1,545
Recovery of expenses 187 215 96 95
------------ ------------ ------------ ------------
3,410 3,270 1,718 1,640
------------ ------------ ------------ ------------
EXPENSES
Property operating 1,300 1,401 637 697
Interest 1,213 1,216 617 607
Depreciation and amortization 1,237 1,029 622 486
General and administrative 146 143 75 69
------------ ------------ ------------ ------------
3,896 3,789 1,951 1,859
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Net loss $ (486) $ (519) $ (233) $ (219)
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------------ ------------ ------------ ------------
ALLOCATION OF NET LOSS
Unitholders $ (481) $ (514) $ (231) $ (217)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
General partners $ (5) $ (5) $ (2) $ (2)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net loss per depositary unit $(6.99) $(7.47) $(3.35) $(3.15)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
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</TABLE>
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
(Unaudited)
<TABLE>
<CAPTION>
GENERAL
UNITHOLDERS PARTNERS TOTAL
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(in thousands)
<S> <C> <C> <C>
Partners' capital (deficit)--December 31, 1996 $5,587 $ (254) $5,333
Net loss (481) (5) (486)
-------------- -------- ------
Partners' capital (deficit)--June 30, 1997 $5,106 $ (259) $4,847
-------------- -------- ------
-------------- -------- ------
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The accompanying notes are an integral part of these statements
</TABLE>
3
<PAGE>
PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP,
A California Limited Partnership
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the six For the six
months ended months ended
June 30, June 30,
1997 1996
<S> <C> <C>
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(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (486) $ (519)
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Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 1,237 1,029
Lease concessions-effective rents 38 42
Leasing commissions paid (133) (96)
Changes in:
Prepaid expenses and other assets, net 107 (4)
Due to affiliates (22) 3
Accounts payable and accrued liabilities 99 81
Security deposits and deferred revenue 13 48
Real estate taxes payable 8 17
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Total adjustments 1,347 1,120
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Net cash provided by operating activities 861 601
CASH FLOWS FROM INVESTING ACTIVITIES
Building improvements (336) (212)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on notes -- (103)
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Net increase in cash and cash equivalents 525 286
Cash and cash equivalents at beginning of period 697 806
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Cash and cash equivalents at end of period $1,222 $1,092
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid $1,091 $1,078
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The accompanying notes are an integral part of these statements
</TABLE>
4
<PAGE>
PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP,
A California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997
(Unaudited)
A. General
These financial statements have been prepared without audit. In the opinion
of Prudential-Bache Properties, Inc. ('PBP') and Glenborough Corporation and
Robert Batinovich (together, 'Glenborough') (collectively, the 'General
Partners'), the financial statements contain all adjustments (consisting of only
normal recurring adjustments) necessary to present fairly the financial position
of Prudential-Bache/Equitec Real Estate Partnership, A California Limited
Partnership (the 'Partnership') as of June 30, 1997, and the results of its
operations for the six and three months ended June 30, 1997 and 1996 and its
cash flows for the six months ended June 30, 1997 and 1996. However, the
operating results for the interim periods may not be indicative of the results
expected for the full year.
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. It is suggested that these financial statements be
read in conjunction with the financial statements and notes thereto included in
the Partnership's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the year ended December 31, 1996.
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; property management;
investor communications; printing and other administrative services. The General
Partners and their affiliates receive reimbursements for costs incurred in
connection with these services, the amount of which is limited by the provisions
of the Partnership Agreement. The costs and expenses were:
<TABLE>
<CAPTION>
Six months Six months
ended ended
June 30, 1997 June 30, 1996
<S> <C> <C>
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(in thousands)
PBP and affiliates:
General and administrative $ 48 $ 53
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Glenborough and affiliates:
Property management fee and expenses 322 292
Leasing commissions 31 63
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353 355
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$ 401 $ 408
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</TABLE>
<TABLE>
<CAPTION>
Three months Three months
ended ended
June 30, 1997 June 30, 1996
<S> <C> <C>
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(in thousands)
PBP and affiliates:
General and administrative $ 24 $ 25
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Glenborough and affiliates:
Property management fee and expenses 188 132
Leasing commissions 3 52
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191 184
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$ 215 $ 209
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</TABLE>
5
<PAGE>
PBP is not being paid on a current basis for general and administrative
expenses other than printing costs. During the six and three months ended June
30, 1997, PBP was reimbursed approximately $100,000 and $50,000, respectively,
which was applied to prior years' general and administrative expenses due. At
June 30, 1997 and December 31, 1996, the total liability outstanding to PBP was
approximately $644,000 and $705,000, respectively. At June 30, 1997, the total
liability outstanding to Glenborough was approximately $39,000.
The Partnership maintains an account with the Prudential Institutional
Liquidity Portfolio Fund, an affiliate of PBP, for investment of its available
cash in short-term instruments pursuant to the guidelines established by the
Partnership Agreement.
Prudential Securities Incorporated ('PSI'), an affiliate of PBP, owns 180
depositary units at June 30, 1997.
6
<PAGE>
PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP,
A California Limited Partnership
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership generated cash from operations of $861,000 for the six months
ended June 30, 1997. During the six months ended June 30, 1997, the Partnership
disbursed approximately $336,000 for building and tenant improvements, primarily
related to the Montrose, Poplar Towers and Totem Valley properties. In order to
keep the properties competitive, building and tenant improvements will continue
to be required.
The Partnership had cash of approximately $1,222,000 at June 30, 1997. PBP is
not being reimbursed for its general and administrative expenses (other than
printing) on a current basis; however, a payment for past due amounts of $50,000
was made in the second quarter of 1997. At June 30, 1997, the total liability
outstanding (including printing) was approximately $644,000. Cash on hand plus
any cash generated from operations may not be sufficient to fund building and
tenant improvements and to pay deferred general and administrative expenses.
The General Partners of the Partnership believe that now is the appropriate
time to sell the Partnership's properties given current market conditions,
increased availability of investor capital, increased purchasing activity and a
favorable interest rate environment, among other reasons.
The General Partners are preparing a proxy statement to be filed with the
Securities and Exchange Commission that will be sent to limited partners
requesting, among other things, their consent to sell the Partnership's
properties to Glenborough Realty Trust Incorporated, an affiliated
entity of the Glenborough General Partner, at a price equal to the
appraised value of the Partnership's properties. Such sale will be
subject to certain conditions as will be more fully discussed in
such proxy statement.
Results of Operations
The Partnership's net loss decreased by approximately $33,000 and increased
by approximately $14,000 for the six and three months ended June 30, 1997 as
compared to the corresponding period in 1996 for the reasons discussed below.
Property operating revenues increased by approximately $168,000 and $77,000
for the six and three months ended June 30, 1997 as compared to the
corresponding period in 1996 as increases in Montrose, Poplar Towers, Gateway
and Totem Valley more than offset the decrease at the Park Plaza property. The
increase in operating revenues was primarily the result of increased occupancies
at the properties
Recovery of expenses decreased by approximately $28,000 for the six months
ended June 30, 1997 as compared to the corresponding period in 1996 primarily
due to lower tenant recoveries at the Montrose property as a result of new
tenant leases.
Property operating expenses decreased by $101,000 and $60,000 for the six and
three months ended June 30, 1997 as compared to the corresponding period in 1996
primarily due to decreases in property taxes and general repairs and
maintenance.
Depreciation and amortization increased by approximately $208,000 and
$136,000 for the six and three months ended June 30, 1997 as compared to the
corresponding period in 1996 primarily due to the amortization of loan fees
relating to the December 1996 mortgage refinancing.
7
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings--None
Item 2. Changes in Securities--None
Item 3. Defaults Upon Senior Securities--None
Item 4. Submission of Matters to a Vote of Security Holders--None
Item 5. Other Information--None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
3 and 4 Amended and Restated Limited Partnership Agreement of
Registrant dated February 11, 1985 (incorporated by
reference to Amendment No. 1 to the Registrant's Form S-11
Registration Statement filed on February 14, 1985) and
Amendment No. 1 thereto dated April 18, 1985
(incorporated by reference to Form 8-A filed on
February 28, 1986), as amended on March 25, 1994
(incorporated by reference to Registrant's 1994 Annual
Report on Form 10-K)
Amended and Restated Agreement between General Partners
dated December 28, 1990 (incorporated by reference to
the Registrant's 1990 Annual Report filed on Form 10-K)
27 Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K--None
8
<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, hereunto duly authorized.
Prudential-Bache/Equitec Real Estate Partnership,
A California Limited Partnership
By: Prudential-Bache Properties, Inc.
A Delaware corporation, General Partner
By: /s/ Eugene D. Burak Date: August 14, 1997
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Eugene D. Burak
Vice President
Chief Accounting Officer for the Registrant
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial
information extracted from the financial
statements for Prudential-Bache Equitec Real Estate
and is qualified in its entirety by reference
to such financial statements
</LEGEND>
<RESTATED>
<CIK> 0000757191
<NAME> Prudential-Bache Equitec Real Estate
<MULTIPLIER> 1
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-1-1997
<PERIOD-END> Jun-30-1997
<PERIOD-TYPE> 6-Mos
<CASH> 1,222,000
<SECURITIES> 0
<RECEIVABLES> 1,126,000
<ALLOWANCES> 500,000
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 51,723,000
<DEPRECIATION> 20,613,000
<TOTAL-ASSETS> 32,958,000
<CURRENT-LIABILITIES> 28,111,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,847,000
<TOTAL-LIABILITY-AND-EQUITY> 32,958,000
<SALES> 0
<TOTAL-REVENUES> 3,410,000
<CGS> 0
<TOTAL-COSTS> 2,683,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,213,000
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (486,000)
<EPS-PRIMARY> (6.99)
<EPS-DILUTED> 0
</TABLE>
