<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, 1996
/ / 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 0-19123
FOGELMAN MORTGAGE L.P. I
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Tennessee 62-1317805
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Seaport Plaza, New York, New York 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 __
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<PAGE>
Part I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FOGELMAN MORTGAGE L.P. I
(a limited partnership)
STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------
ASSETS
Investments in mortgage loans $26,325,225 $27,127,610
Cash and cash equivalents 2,080,703 1,963,643
Deferred general partner's fees (net of accumulated
amortization of $1,899,065 and $1,746,443 at
September 30, 1996 and December 31, 1995, respectively) 539,935 692,557
------------- ------------
Total assets $28,945,863 $29,783,810
------------- ------------
------------- ------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Deposits held for tax obligations of underlying properties $ 528,215 $ 228,565
Due to affiliates 89,321 95,955
Accrued expenses 38,226 39,896
------------- ------------
Total liabilities 655,762 364,416
------------- ------------
Partners' capital
Unitholders (54,200 units issued and outstanding) 28,501,444 29,619,447
General partner (211,343) (200,053)
------------- ------------
Total partners' capital 28,290,101 29,419,394
------------- ------------
Total liabilities and partners' capital $28,945,863 $29,783,810
------------- ------------
------------- ------------
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</TABLE>
The accompanying notes are an integral part of these statements
2
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<PAGE>
FOGELMAN MORTGAGE L.P. I
(a limited partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended Three months ended
September 30, September 30,
------------------------- ---------------------
1996 1995 1996 1995
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
REVENUES
Equity income from the underlying properties $1,773,609 $1,911,071 $337,991 $564,946
Interest income from cash equivalents 68,461 80,082 21,265 26,393
---------- ---------- -------- --------
1,842,070 1,991,153 359,256 591,339
---------- ---------- -------- --------
EXPENSES
General and administrative 113,383 101,674 30,858 31,948
Amortization of deferred general partner's
fees 152,622 152,622 50,874 50,874
---------- ---------- -------- --------
266,005 254,296 81,732 82,822
---------- ---------- -------- --------
Net income $1,576,065 $1,736,857 $277,524 $508,517
---------- ---------- -------- --------
---------- ---------- -------- --------
ALLOCATION OF NET INCOME
Unitholders $1,389,289 $1,548,472 $217,744 $446,426
---------- ---------- -------- --------
---------- ---------- -------- --------
General partner:
Special distribution $ 172,743 $ 172,743 $ 57,581 $ 57,581
Other 14,033 15,642 2,199 4,510
---------- ---------- -------- --------
$ 186,776 $ 188,385 $ 59,780 $ 62,091
---------- ---------- -------- --------
---------- ---------- -------- --------
Net income per depositary unit $ 25.63 $ 28.57 $ 4.02 $ 8.24
---------- ---------- -------- --------
---------- ---------- -------- --------
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</TABLE>
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
(Unaudited)
<TABLE>
<CAPTION>
GENERAL
UNITHOLDERS PARTNER TOTAL
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Partners' capital (deficit)--December 31, 1995 $29,619,447 $(200,053) $29,419,394
Net income 1,389,289 186,776 1,576,065
Distributions (2,507,292) (198,066) (2,705,358)
----------- --------- -----------
Partners' capital (deficit)--September 30, 1996 $28,501,444 $(211,343) $28,290,101
----------- --------- -----------
----------- --------- -----------
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</Table
The accompanying notes are an integral part of these statements
3
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<PAGE>
FOGELMAN MORTGAGE L.P. I
(a limited partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
</TABLE>
<TABLE>
<CAPTION>
Nine months ended
September 30,
-------------------------
1996 1995
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received from mortgage loans $2,575,994 $2,637,135
Interest received from cash equivalents 68,461 80,082
Cash received for tax obligations of underlying properties 478,511 479,079
Cash paid for tax obligations of underlying properties (178,861) (143,553)
General and administrative expenses paid (121,687) (71,854)
---------- ----------
Net cash provided by operating activities 2,822,418 2,980,889
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to partners (2,705,358) (2,499,511)
---------- ----------
Net increase in cash and cash equivalents 117,060 481,378
Cash and cash equivalents at beginning of period 1,963,643 1,774,337
---------- ----------
Cash and cash equivalents at end of period $2,080,703 $2,255,715
---------- ----------
---------- ----------
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Net income $1,576,065 $1,736,857
---------- ----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of deferred general partner's fees 152,622 152,622
Equity income from the underlying properties (1,773,609) (1,911,071)
Interest received from mortgage loans 2,575,994 2,637,135
Changes in:
Deposits held for tax obligations of underlying properties 299,650 335,526
Accrued expenses (1,670) (3,634)
Due to affiliates (6,634) 33,454
---------- ----------
Total adjustments 1,246,353 1,244,032
---------- ----------
Net cash provided by operating activities $2,822,418 $2,980,889
---------- ----------
---------- ----------
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</TABLE>
The accompanying notes are an integral part of these statements
4
<PAGE>
<PAGE>
FOGELMAN MORTGAGE L.P. I
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(Unaudited)
A. General
These financial statements have been prepared without audit. In the opinion
of management, the financial statements contain all adjustments (consisting of
only normal recurring adjustments) necessary to present fairly the financial
position of Fogelman Mortgage L.P. I (the ``Partnership'') as of September 30,
1996, the results of its operations for the nine and three months ended
September 30, 1996 and 1995 and its cash flows for the nine months ended
September 30, 1996 and 1995. 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, 1995.
B. Related Parties
Prudential-Bache Properties, Inc. (``PBP'' or the ``General Partner'') and
its affiliates perform services for the Partnership which include, but are not
limited to: accounting and financial management; registrar, transfer and
assignment functions; asset management; investor communications; printing and
other administrative services. The General Partner 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 were approximately $51,000 and $62,000 for the nine months ended
September 30, 1996 and 1995, respectively, and $15,000 and $21,000 for the three
months ended September 30, 1996 and 1995, respectively.
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 investments pursuant to guidelines established by the
Partnership Agreement.
Prudential Securities Incorporated (``PSI''), an affiliate of the General
Partner, owns 835 units at September 30, 1996.
C. Summarized Property Financial Information
Presented below is summarized unaudited financial information for the
Westmont and Pointe Royal Projects representing the properties underlying the
Partnership's two mortgage loan investments. Effective January 1, 1996, the
Westmont and Pointe Royal Projects adopted Statement of Financial Standards
(``SFAS'') No. 121, ``Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of.'' Under SFAS No. 121, impairment of
properties to be held and used is determined to exist when estimated amounts
recoverable through future operations on an undiscounted basis are below the
properties' carrying value. If a property is determined to be impaired, it
should be recorded at the lower of its carrying value or its estimated fair
value. The implementation of SFAS No. 121 did not have a significant impact on
the Projects' financial position as of September 30, 1996.
5
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<PAGE>
<TABLE>
<CAPTION>
Nine months ended Three months ended
September 30, September 30,
--------------------------- -------------------------
Westmont (Chesterfield) 1996 1995 1996 1995
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Revenues:
Rental Income $ 2,723,927 $ 2,649,646 $ 897,404 $ 910,795
Interest and other income 100,232 128,812 38,423 38,400
----------- ----------- ---------- ----------
2,824,159 2,778,458 935,827 949,195
----------- ----------- ---------- ----------
Expenses:
Operating 1,268,180 1,400,948 485,048 614,598
Interest 2,068,321 2,005,636 698,423 680,709
Depreciation 583,440 440,438 196,945 28,403
----------- ----------- ---------- ----------
3,919,941 3,847,022 1,380,416 1,323,710
----------- ----------- ---------- ----------
Net loss $(1,095,782) $(1,068,564) $ (444,589) $ (374,515)
----------- ----------- ---------- ----------
----------- ----------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
Nine months ended Three months ended
September 30, September 30,
--------------------------- -------------------------
Pointe Royal (Royal View) 1996 1995 1996 1995
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Revenues:
Rental Income $ 2,819,848 $ 2,685,106 $ 956,205 $ 904,688
Interest and other income 118,413 110,959 36,622 42,807
----------- ----------- ---------- ----------
2,938,261 2,796,065 992,827 947,495
----------- ----------- ---------- ----------
Expenses:
Operating 1,658,371 1,310,051 746,465 512,626
Interest 1,934,026 1,879,882 655,254 639,154
Depreciation 556,249 572,850 188,012 169,755
----------- ----------- ---------- ----------
4,148,646 3,762,783 1,589,731 1,321,535
----------- ----------- ---------- ----------
Net loss $(1,210,385) $ (966,718) $ (596,904) $ (374,040)
----------- ----------- ---------- ----------
----------- ----------- ---------- ----------
</TABLE>
D. Subsequent Event
In November 1996, distributions of approximately $847,000 and $8,600 were
paid to the Unitholders and General Partner, respectively, for the quarter
ended September 30, 1996.
6
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<PAGE>
FOGELMAN MORTGAGE L.P. I
(a limited partnership)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership provides permanent financing for two multi-family residential
apartment complexes. As of September 30, 1996, the Partnership had approximately
$2,081,000 of funds available which may be used to pay distributions,
unanticipated or extraordinary expenses and other costs relating to the
operation and administration of the Partnership's business. Cash expended at the
property level for capital improvement impacts the cash flow received from the
properties.
The Partnership's future operating cash requirements and quarterly
distributions are expected to be funded by Partnership operations. The
distribution for the three months ended September 30, 1996 was funded from
current and prior undistributed cash flow from operations.
Results of Operations
As of September 30, 1996 and 1995, occupancy rates were 96.7% and 97.5%,
respectively, for Westmont and 99.1% and 97.5%, respectively, for Pointe Royal.
Net income of the Partnership for the nine and three months ended September 30,
1996 decreased by approximately $161,000 and $231,000 as compared to the same
periods in 1995.
For financial reporting purposes, the Partnership's mortgage loans are
considered, in substance, to be investments in real estate and are accounted for
using the equity method. Equity income from the underlying properties (which
increases the carrying value of the original investment) decreased approximately
$137,000 and $227,000 for the nine and three months ended September 30, 1996 as
compared to the same periods in 1995. These decreases were primarily due to
increased repairs and maintenance at Pointe Royal and increased depreciation at
Westmont partially offset by increased rental revenues at Pointe Royal and
decreased repairs and maintenance at Westmont. Interest received from mortgage
loans for the nine months ended September 30, 1996 and 1995 of approximately
$2,576,000 and $2,637,000, respectively, and for the three months ended
September 30, 1996 and 1995 of approximately $540,000 and $621,000,
respectively, is accounted for as distributions and, accordingly, reduces the
carrying value of the original investment.
At September 30, 1996, the accrued interest liabilities at the property level
were approximately $8,171,000. This accrued interest plus the original principal
balances aggregate approximately $54,236,000. The ultimate collectibility of the
accrued interest as well as the full principal balances of the mortgage loans
will depend upon the value of the underlying properties which were recently
appraised by a third party, to be $51,500,000. These appraised property values
exceed the Partnership's carrying amount of the investment in mortgage loans.
General and administrative expenses increased approximately $12,000 for the
nine months ended September 30, 1996 as compared to the prior year, primarily
due to appraisal fees incurred in the second quarter 1996.
7
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<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:
3.1 Amended and Restated Certificate and Agreement of Limited Partnership
dated November 12, 1986 (incorporated by reference to Registration
Statement No. 33-8596 dated November 24, 1986)
3.2 Second Amendment to Amended and Restated Certificate and Agreement of
Limited Partnership dated December 24, 1992 (incorporated by
reference to the Registrant's Annual Report on Form 10-K for the year
ended December 31, 1992)
27 Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K--None
8
<PAGE>
<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.
Fogelman Mortgage L.P. I
By: Prudential-Bache Properties, Inc.
A Delaware corporation, General Partner
By: /s/ Eugene D. Burak Date: November 13, 1996
----------------------------------------
Eugene D. Burak
Vice President
Chief Accounting Officer for the
Registrant
9
<PAGE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial
information extracted from the financial
statements for Fogelman Mortgage L.P. I
and is qualified in its entirety by reference
to such financial statements
</LEGEND>
<RESTATED>
<CIK> 0000800608
<NAME> Fogelman Mortgage L.P. I
<MULTIPLIER> 1
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-1-1996
<PERIOD-END> Sep-30-1996
<PERIOD-TYPE> 9-Mos
<CASH> 2,080,703
<SECURITIES> 0
<RECEIVABLES> 26,325,225
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 539,935
<DEPRECIATION> 0
<TOTAL-ASSETS> 28,945,863
<CURRENT-LIABILITIES> 655,762
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 28,290,101
<TOTAL-LIABILITY-AND-EQUITY> 28,945,863
<SALES> 0
<TOTAL-REVENUES> 1,842,070
<CGS> 0
<TOTAL-COSTS> 266,005
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,576,065
<EPS-PRIMARY> 25.63
<EPS-DILUTED> 0
</TABLE>
