<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 March 31, 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
- --------------------------------------------------------------------------------
(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. 10292-0116
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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>
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>
March 31, December 31,
1997 1996
<S> <C> <C>
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ASSETS
Cash and cash equivalents $1,237,956 $1,409,327
Property held for sale 425,000 425,000
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Total assets 1,662,956 1,834,327
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LIABILITIES
Estimated liquidation costs 223,000 226,000
Other liabilities 82,792 130,796
Due to affiliates 25,720 44,287
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Total liabilities 331,512 401,083
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Net assets available to unitholders and general partners $1,331,444 $1,433,244
---------- ------------
---------- ------------
Depositary units issued and outstanding 66,555 66,555
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---------- ------------
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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 106,082 (207,882) (101,800)
----------- -------- ----------
Net assets in liquidation--March 31, 1997 $1,331,444 $ -- $1,331,444
----------- -------- ----------
----------- -------- ----------
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The accompanying notes are an integral part of these statements
</TABLE>
2
<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-4
(a limited partnership)
STATEMENT OF OPERATIONS
(going concern basis)
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended
March 31,
1996
<S> <C>
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REVENUES
Rental income $463,611
Interest 6,984
Other 5,675
------------
476,270
------------
EXPENSES
Property operating 182,375
General and administrative 150,144
Real estate taxes 48,267
------------
380,786
------------
Net income $ 95,484
------------
------------
ALLOCATION OF NET INCOME
Unitholders $ 87,845
------------
------------
General partners $ 7,639
------------
------------
Net income per depositary unit $ 1.32
------------
------------
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The accompanying notes are an integral part of this statement
</TABLE>
3
<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-4
(a limited partnership)
STATEMENT OF CASH FLOWS
(going concern basis)
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended
March 31,
1996
<S> <C>
- --------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Rental income and deposits received $ 478,513
Interest received 6,984
Other income received 5,675
Property operating expenses paid (203,101)
Real estate taxes paid (100,288)
General and administrative expenses paid (132,796)
------------
Net cash provided by operating activities 54,987
CASH FLOWS FROM INVESTING ACTIVITIES
Property improvements (117,655)
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions paid to partners (807,328)
------------
Net decrease in cash and cash equivalents (869,996)
Cash and cash equivalents at beginning of period 1,450,040
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Cash and cash equivalents at end of period $ 580,044
------------
------------
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RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Net income $ 95,484
------------
Adjustments to reconcile net income to net cash provided by operating activities:
Changes in:
Other assets 7,085
Accounts payable and accrued expenses 32,292
Due to affiliates (35,670)
Accrued real estate taxes (52,021)
Unearned rental income 12,861
Deposits due to tenants (5,044)
------------
Total adjustments (40,497)
------------
Net cash provided by operating activities $ 54,987
------------
------------
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The accompanying notes are an integral part of this statement
</TABLE>
4
<PAGE>
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-4
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 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 March 31, 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.
Net assets at March 31, 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 three months ended March 31, 1996 were approximately $34,000.
Affiliates of Messrs. Watson and Taylor, the individual General Partners,
also perform certain administrative and monitoring functions on behalf of the
Partnership. The Partnership recorded approximately $1,000 for the three months
ended March 31, 1996 relating to the reimbursement of these services.
Estimated liquidation costs payable to the General Partners and their
affiliates were approximately $138,000 as of March 31, 1997 and December 31,
1996.
Prudential Securities Incorporated, an affiliate of PBP, owns 391 depositary
units at March 31, 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
the remaining undeveloped land parcel, Beltline Central, located in Addison,
Texas. It is uncertain at this time as to when the sale of this property will
occur.
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
1997, 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
Thomas F. Lynch, III ceased to serve as President, Chief Executive
Officer, Chairman of the Board of Directors and Director of
Prudential-Bache Properties, Inc. effective May 2, 1997. Effective May
2, 1997, Brian J. Martin was elected President, Chief Executive
Officer, Chairman of the Board of Directors and Director of
Prudential-Bache Properties, Inc.
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: May 15, 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> Mar-31-1997
<PERIOD-TYPE> 3-MOS
<CASH> 1,237,956
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,237,956
<PP&E> 425,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,662,956
<CURRENT-LIABILITIES> 331,512
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,331,444
<TOTAL-LIABILITY-AND-EQUITY> 1,662,956
<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>