<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
H QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1997
MTRANSITION 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
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(Exact name of Registrant as specified in its charter)
Tennessee 62-1317805
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(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
One Seaport Plaza, New York, New York 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 u 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 _u_ No __
<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,
1997 1996
<S> <C> <C>
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ASSETS
Investments in mortgage loans $25,589,567 $26,123,955
Cash and cash equivalents 1,094,343 1,708,313
Deferred general partner's fees (net of accumulated
amortization of $2,102,561 and $1,949,939 at
September 30, 1997 and December 31, 1996, respectively) 336,439 489,061
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Total assets $27,020,349 $28,321,329
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LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Deposits held for tax obligations of underlying properties $ 375,768 $ 88,550
Due to affiliates 88,648 71,794
Accrued expenses 43,842 45,362
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Total liabilities 508,258 205,706
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Partners' capital
Unitholders (54,200 units issued and outstanding) 26,741,214 28,328,711
General partner (229,123) (213,088)
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Total partners' capital 26,512,091 28,115,623
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Total liabilities and partners' capital $27,020,349 $28,321,329
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The accompanying notes are an integral part of these statements
</TABLE>
2
<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,
------------------------- ---------------------
1997 1996 1997 1996
<S> <C> <C> <C> <C>
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REVENUES
Equity income from the underlying properties $1,137,031 $1,773,609 $406,291 $337,991
Interest income from cash equivalents 40,519 68,461 11,034 21,265
---------- ---------- -------- --------
1,177,550 1,842,070 417,325 359,256
---------- ---------- -------- --------
EXPENSES
General and administrative 114,715 113,383 53,266 30,858
Amortization of deferred general partner's
fees 152,622 152,622 50,874 50,874
---------- ---------- -------- --------
267,337 266,005 104,140 81,732
---------- ---------- -------- --------
Net income $ 910,213 $1,576,065 $313,185 $277,524
---------- ---------- -------- --------
---------- ---------- -------- --------
ALLOCATION OF NET INCOME
Unitholders $ 730,095 $1,389,289 $253,048 $217,744
---------- ---------- -------- --------
---------- ---------- -------- --------
General partner:
Special distribution $ 172,743 $ 172,743 $ 57,581 $ 57,581
Other 7,375 14,033 2,556 2,199
---------- ---------- -------- --------
$ 180,118 $ 186,776 $ 60,137 $ 59,780
---------- ---------- -------- --------
---------- ---------- -------- --------
Net income per depositary unit $ 13.47 $ 25.63 $ 4.67 $ 4.02
---------- ---------- -------- --------
---------- ---------- -------- --------
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</TABLE>
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
(Unaudited)
<TABLE>
<CAPTION>
GENERAL
UNITHOLDERS PARTNER TOTAL
<S> <C> <C> <C>
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Partners' capital (deficit)--December 31, 1996 $28,328,711 $(213,088) $28,115,623
Net income 730,095 180,118 910,213
Distributions (2,317,592) (196,153) (2,513,745)
----------- --------- -----------
Partners' capital (deficit)--September 30, 1997 $26,741,214 $(229,123) $26,512,091
----------- --------- -----------
----------- --------- -----------
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The accompanying notes are an integral part of these statements
</TABLE>
3
<PAGE>
FOGELMAN MORTGAGE L.P. I
(a limited partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30,
---------------------------
1997 1996
<S> <C> <C>
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CASH FLOWS FROM OPERATING ACTIVITIES
Interest received from mortgage loans $ 1,671,419 $ 2,575,994
Interest received from cash equivalents 40,519 68,461
Cash received for tax obligations of underlying properties 464,319 478,511
Cash paid for tax obligations of underlying properties (177,101) (178,861)
General and administrative expenses paid (99,381) (121,687)
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Net cash provided by operating activities 1,899,775 2,822,418
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to partners (2,513,745) (2,705,358)
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Net increase (decrease) in cash and cash equivalents (613,970) 117,060
Cash and cash equivalents at beginning of period 1,708,313 1,963,643
----------- -----------
Cash and cash equivalents at end of period $ 1,094,343 $ 2,080,703
----------- -----------
----------- -----------
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Net income $ 910,213 $ 1,576,065
----------- -----------
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 (1,137,031) (1,773,609)
Interest received from mortgage loans 1,671,419 2,575,994
Changes in:
Deposits held for tax obligations of underlying properties 287,218 299,650
Accrued expenses (1,520) (1,670)
Due to affiliates 16,854 (6,634)
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Total adjustments 989,562 1,246,353
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Net cash provided by operating activities $ 1,899,775 $ 2,822,418
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The accompanying notes are an integral part of these statements
</TABLE>
4
<PAGE>
FOGELMAN MORTGAGE L.P. I
(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 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,
1997, the results of its operations for the nine and three months ended
September 30, 1997 and 1996 and its cash flows for the nine months ended
September 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
Prudential-Bache Properties, Inc. ('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 $59,000 and $51,000 for the nine months ended
September 30, 1997 and 1996, respectively, and $33,000 and $15,000 for the three
months ended September 30, 1997 and 1996, respectively.
The Partnership maintains an account with the Prudential Institutional
Liquidity Portfolio Fund, an affiliate of the General Partner, 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, 1997.
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.
<TABLE>
<CAPTION>
Nine months ended Three months ended
September 30, September 30,
--------------------------- -------------------------
Westmont (Chesterfield) 1997 1996 1997 1996
<S> <C> <C> <C> <C>
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Revenues:
Rental Income $ 2,777,847 $ 2,723,927 $ 963,952 $ 897,404
Interest and other income 105,569 100,232 37,174 38,423
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2,883,416 2,824,159 1,001,126 935,827
----------- ----------- ---------- ----------
Expenses:
Operating 1,556,268 1,268,180 594,448 485,048
Interest 2,139,403 2,068,321 729,672 698,423
Depreciation 625,999 583,440 211,200 196,945
----------- ----------- ---------- ----------
4,321,670 3,919,941 1,535,320 1,380,416
----------- ----------- ---------- ----------
Net loss $(1,438,254) $(1,095,782) $ (534,194) $ (444,589)
----------- ----------- ---------- ----------
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</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Nine months ended Three months ended
September 30, September 30,
--------------------------- -------------------------
Pointe Royal (Royal View) 1997 1996 1997 1996
<S> <C> <C> <C> <C>
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Revenues:
Rental Income $ 2,793,804 $ 2,819,848 $ 943,218 $ 956,205
Interest and other income 101,823 118,413 29,876 36,622
----------- ----------- ---------- ----------
2,895,627 2,938,261 973,094 992,827
----------- ----------- ---------- ----------
Expenses:
Operating 1,942,194 1,658,371 585,892 746,465
Interest 2,038,379 1,934,026 697,167 655,254
Depreciation 594,983 556,249 202,197 188,012
----------- ----------- ---------- ----------
4,575,556 4,148,646 1,485,256 1,589,731
----------- ----------- ---------- ----------
Net loss $(1,679,929) $(1,210,385) $ (512,162) $ (596,904)
----------- ----------- ---------- ----------
----------- ----------- ---------- ----------
</TABLE>
D. Subsequent Event
In November 1997, distributions of approximately $623,000 and $6,000 were
paid to the Unitholders and General Partner, respectively, for the quarter ended
September 30, 1997.
6
<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, 1997, the Partnership had approximately
$1,094,000 of funds available which may be used to pay distributions,
unanticipated or extraordinary expenses, real estate taxes and other costs
relating to the operation and administration of the Partnership's business. Cash
expended at the property level in 1997 for capital expenditures will impact 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, 1997 was funded from
current and prior undistributed cash flow from operations. Because of the
increased competition in the two market areas in which the properties underlying
the Partnership's mortgage loan investments are located, there has been an
increase in the properties' capital expenditures in order to maintain their
competitiveness. As a result of these increased capital expenditures, the
General Partner has lowered the distribution to 4.6% on an annualized basis or
$11.50 per unit per quarter beginning with the distribution made for the second
quarter of 1997.
Results of Operations
As of September 30, 1997 and 1996, occupancy rates were 98.4% and 96.7%,
respectively, for Westmont and 97.5% and 99.1%, respectively, for Pointe Royal.
Net income of the Partnership decreased by approximately $666,000 and increased
by approximately $36,000 respectively, for the nine and three months ended
September 30, 1997 as compared to the same periods in 1996.
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
$637,000 for the nine months ended September 30, 1997 as compared to the same
period in 1996, primarily due to increased repairs and maintenance at Pointe
Royal and Westmont of approximately $210,000 and $268,000, respectively. In
addition, depreciation expense increased at Pointe Royal and Westmont by
approximately $39,000 and $43,000, respectively, as a result of increased
capital improvements at both properties. Equity income increased approximately
$68,000 for the three months ended September 30, 1997 as compared to the same
period in 1996 primarily due to increased rental income at Westmont of
approximately $65,000 partially offset by a $20,000 decrease at Point Royal.
Interest received from mortgage loans for the nine months ended September 30,
1997 and 1996 of approximately $1,671,000 and $2,576,000, respectively, and for
the three months ended September 30, 1997 and 1996 of approximately $541,000 and
$540,000, respectively, is accounted for as distributions and, accordingly,
reduces the carrying value of the original investment. Interest received (paid
from property cash flow) decreased approximately $905,000 for the nine months
ended September 30, 1997 as compared to the same period in 1996 primarily due to
the reasons discussed above in addition to an increase in capital improvements
at the properties.
At September 30, 1997, the accrued interest liabilities at the property level
were approximately $10,723,000. This accrued interest plus the original
principal balances of the mortgage loans aggregate approximately $56,788,000.
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 are estimated, based on recent third party
appraisals, to be less than the amounts due. This condition is expected to
continue because of the increased competition in the markets where the two
properties are located. However, the estimated property values exceed the
Partnership's carrying amount of the investment in mortgage loans which is
recorded using the equity method.
<PAGE>
7
<PAGE>
Interest income from cash equivalents decreased by approximately $28,000 and
$10,000 for the nine and three months ended September 30, 1997 as compared to
the same period in 1996 due primarily to lower cash balances.
General and administrative expenses increased approximately $22,000 for the
three months ended September 30, 1997 as compared to the prior year due to an
increase in overall costs of administering the Partnership.
<PAGE>
8
<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
<PAGE>
9
<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 14, 1997
----------------------------------------
Eugene D. Burak
Vice President
Chief Accounting Officer for the Registrant
10
<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-31-1997
<PERIOD-START> Jan-1-1997
<PERIOD-END> Sep-30-1997
<PERIOD-TYPE> 9-Mos
<CASH> 1,094,343
<SECURITIES> 0
<RECEIVABLES> 25,589,567
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 336,439
<DEPRECIATION> 0
<TOTAL-ASSETS> 27,020,349
<CURRENT-LIABILITIES> 508,258
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 26,512,091
<TOTAL-LIABILITY-AND-EQUITY> 27,020,349
<SALES> 0
<TOTAL-REVENUES> 1,177,550
<CGS> 0
<TOTAL-COSTS> 267,337
<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> 910,213
<EPS-PRIMARY> 13.47
<EPS-DILUTED> 0
</TABLE>
