<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, 1997
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 0-15381
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-4
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(Exact name of Registrant as specified in its charter)
Texas 75-2083046
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(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
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>
<PAGE>
Part I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-4
(a limited partnership)
STATEMENTS OF NET ASSETS
(in process of liquidation)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------
ASSETS
Cash and cash equivalents $ 1,124,442 $1,409,327
Property held for sale 300,000 425,000
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Total assets 1,424,442 1,834,327
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LIABILITIES
Estimated liquidation costs 181,221 401,083
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Net assets available to unitholders and general partners $ 1,243,221 $1,433,244
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------------- ------------
Depositary units issued and outstanding 66,555 66,555
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</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(in process of liquidation)
(Unaudited)
<TABLE>
<CAPTION>
GENERAL
UNITHOLDERS PARTNERS TOTAL
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Net assets in liquidation--December 31, 1996 $1,225,362 $207,882 $1,433,244
Changes in estimated liquidation values of assets and
liabilities 17,859 (207,882) (190,023)
----------- -------- ----------
Net assets in liquidation--September 30, 1997 $1,243,221 $ -- $1,243,221
----------- -------- ----------
----------- -------- ----------
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</TABLE>
The accompanying notes are an integral part of these statements
2
<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-4
(a limited partnership)
STATEMENT OF OPERATIONS
(going concern basis)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Three Months
Ended Ended
September 30, September 30,
1996 1996
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------
REVENUES
Rental income $1,425,875 $ 487,633
Interest 14,596 4,360
Other 17,530 5,665
-------------- --------------
1,458,001 497,658
-------------- --------------
EXPENSES
Property operating 511,059 172,660
General and administrative 623,949 226,299
Real estate taxes 144,243 50,638
Provision for loss on impairment of assets 300,000 300,000
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1,579,251 749,597
-------------- --------------
Net loss $ (121,250) $ (251,939)
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-------------- --------------
ALLOCATION OF NET LOSS
Unitholders $ (132,550) $ (252,784)
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-------------- --------------
General partners $ 11,300 $ 845
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-------------- --------------
Net loss per depositary unit $ (1.99) $ (3.80)
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</TABLE>
The accompanying notes are an integral part of these statements
3
<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-4
(a limited partnership)
STATEMENT OF CASH FLOWS
(going concern basis)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months
Ended
September 30,
1996
<S> <C>
- ---------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Rental income and deposits received $1,429,223
Interest received 14,596
Other income received 17,530
Property operating expenses paid (499,540)
General and administrative expenses paid (425,061)
Real estate taxes paid (138,605)
--------------
Net cash provided by operating activities 398,143
CASH FLOWS FROM INVESTING ACTIVITIES
Property improvements (146,597)
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions paid to partners (988,370)
--------------
Net decrease in cash and cash equivalents (736,824)
Cash and cash equivalents at beginning of period 1,450,040
--------------
Cash and cash equivalents at end of period $ 713,216
--------------
--------------
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RECONCILIATION OF NET LOSS TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Net loss $ (121,250)
--------------
Adjustments to reconcile net loss to net cash provided by operating activities:
Provision for loss on impairment of assets 300,000
Changes in:
Other assets (14,762)
Accounts payable and accrued expenses 245,982
Accrued real estate taxes 5,638
Due to affiliates (35,575)
Deposits due to tenants 12,213
Unearned rental income 5,897
--------------
Total adjustments 519,393
--------------
Net cash provided by operating activities $ 398,143
--------------
--------------
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</TABLE>
The accompanying notes are an integral part of this statement
4
<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-4
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
A. General
These financial statements have been prepared without audit. In the opinion
of Prudential-Bache Properties, Inc. ('Managing General Partner') ('PBP'), the
financial statements for the period ended September 30, 1997 contain all
adjustments necessary to present fairly such information subject to the effects
of any further liquidation accounting adjustments that would have been required
had the current realizable values of assets and the amounts of liabilities been
known when Prudential-Bache/Watson & Taylor, Ltd.-4 (the 'Partnership') first
adopted the liquidation basis of accounting as of October 1, 1996. Prior to
October 1, 1996, the books and records of the Partnership were maintained on a
going concern accrual basis of accounting.
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. Certain balances from
prior periods have been reclassified to conform with the current financial
statement presentation.
The Partnership continues to own an undeveloped land parcel, Beltline
Central, located in Addison, Texas. Based upon comparable land sales in the
area, the Partnership has adjusted the carrying value of the property to
$300,000 as of September 30, 1997. The Partnership has not yet identified a
buyer for the property and it is unlikely that a sale will be consummated before
the end of the year. The Partnership plans to sell the property as soon as
possible in 1998.
Net assets at September 30, 1997 have been adjusted to properly reflect the
allocation of limited partners' and General Partners' capital in anticipation of
the liquidation of the Partnership.
B. 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 (including direct management of the
Partnership's unimproved property), investor communications, printing and other
administrative services. PBP and its 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 incurred on
behalf of the Partnership which are reimbursable to PBP and its affiliates for
the nine and three months ended September 30, 1996 were approximately $93,000
and $27,000, respectively.
Affiliates of Messrs. Watson and Taylor, the individual General Partners,
also perform certain administrative functions on behalf of the Partnership. The
Partnership recorded approximately $26,000 and $4,000 for the nine and three
months ended September 30, 1996, respectively, relating to the reimbursement of
these services.
Estimated liquidation costs payable to the General Partners and their
affiliates were approximately $101,000 and $182,000 as of September 30, 1997 and
December 31, 1996, respectively.
Prudential Securities Incorporated, an affiliate of PBP, owns 391 depositary
units at September 30, 1997.
5
<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-4
(a limited partnership)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
In accordance with the Consent Statement dated September 17, 1996, the
Unitholders approved, on October 18, 1996, the sale to Public Storage, Inc. of
all five miniwarehouse facilities and four of the six undeveloped land parcels
owned by the Partnership and the liquidation and dissolution of the Partnership.
The five miniwarehouse facilities and three of the four undeveloped land parcels
which were under contract were sold to Public Storage, Inc. and its affiliates
on November 13, 1996. The fourth undeveloped land parcel, Yancy Camp, was sold
to Public Storage, Inc. on December 19, 1996 and a fifth land parcel, Dimension,
was sold to a third party on November 22, 1996.
The Partnership continues to own an undeveloped land parcel, Beltline
Central, located in Addison, Texas. Based upon comparable land sales in the
area, the Partnership has adjusted the carrying value of the property to
$300,000 as of September 30, 1997. The Partnership has not yet identified a
buyer for the property and it is unlikely that a sale will be consummated before
the end of the year. The Partnership plans to sell the property as soon as
possible in 1998.
A distribution of $165 per limited partnership unit was made on November 26,
1996 representing the net sales proceeds reduced by a contingency reserve and
funds required to meet the anticipated current and future operating costs until
the liquidation of the Partnership. The Partnership intends to liquidate in
1998, subject to the prior sale of the remaining undeveloped land parcel, and
will distribute any remaining funds at such time. In accordance with the
Partnership Agreement, such distributions to partners will be made based upon
each partner's capital account for Federal income tax purposes. Estimated costs
expected to be incurred through the date of liquidation of the Partnership have
been accrued in the accompanying financial statements.
Results of Operations
As a result of the Partnership adopting liquidation accounting in accordance
with generally accepted accounting principles as of October 1, 1996 and thus not
reporting results of operations thereafter, there is no management discussion
comparing the corresponding 1997 and 1996 periods.
6
<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
Description:
4.01 Certificate of Limited Partnership Interest (filed as an exhibit
to Registration Statement on Form S-11 (No. 33-1213) and
incorporated herein by reference)
4.02 Depositary Receipt (filed as an exhibit to Registration
Statement on Form S-11 (No. 33-1213) and incorporated herein
by reference)
27.1 Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K--None
7
<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-Bache/Watson & Taylor, Ltd.-4
By: Prudential-Bache Properties, Inc.
A Delaware corporation,
Managing General Partner
By: /s/ Eugene D. Burak Date: November 14, 1997
----------------------------------------
Eugene D. Burak
Vice President
Chief Accounting Officer for the
Registrant
8
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial
information extracted from the financial
statements for P-B Watson & Taylor Ltd.-4
and is qualified in its entirety by reference
to such financial statements
</LEGEND>
<RESTATED>
<CIK> 0000780352
<NAME> P-B Watson & Taylor Ltd.-4
<MULTIPLIER> 1
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-1-1997
<PERIOD-END> Sep-30-1997
<PERIOD-TYPE> 9-MOS
<CASH> 1,124,442
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,124,442
<PP&E> 300,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,424,442
<CURRENT-LIABILITIES> 181,221
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,243,221
<TOTAL-LIABILITY-AND-EQUITY> 1,424,442
<SALES> 0
<TOTAL-REVENUES> 0<F1>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0<F1>
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0
<FN>
<F1>
Registrant adopted the liquidation basis of accounting
on October 1, 1996, and, accordingly, does not reflect
Statement of Operations subsequent to 1996. See Note A
to the financial statements for further details.
</FN>
</TABLE>
