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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 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 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: 0-16861
PRUDENTIAL-BACHE/A.G. SPANOS GENESIS INCOME PARTNERS L.P., I
- ---------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Delaware 94-3028296
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(State or other jurisdiction of I.R.S. Employer Identification No.)
incorporation or organization)
1341 West Robinhood, B-9, Stockton, CA 95207
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (209) 478-0140
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 such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirement for the past 90 days. Yes _CK_ No__
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TABLE OF CONTENTS
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PAGE
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<S> <C> <C>
Part I. Financial Information
Item 1: Balance Sheets - March 31, 1997 and
December 31, 1996 . . . . . . . . . . . . . . . . . 3
Statements of operations for the three months ended
March 31, 1997 and 1996 . . . . . . . . . . . . . . 4
Statement of changes in partners' equity (deficit)
for the three months ended March 31, 1997 . . . . . 5
Statements of cash flows for the three months
ended March 31, 1997 and 1996 . . . . . . . . . . . 6
Notes to Financial Statements . . . . . . . . . . . 7
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . 12
Part II. Other Information . . . . . . . . . . . . . . . . . 13
</TABLE>
2
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PRUDENTIAL-BACHE/A.G. SPANOS GENESIS INCOME PARTNERS L.P., I
(A Limited Partnership)
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
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<S> <C> <C>
ASSETS
Property, net $70,300,980 $71,009,033
Cash and cash equivalents 5,134,310 4,997,867
Accounts receivable, affiliate 163,476 163,476
Other assets 83,658 127,687
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$75,682,424 $76,298,063
---------- ----------
---------- ----------
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities:
Mortgage loans payable $58,660,440 $58,897,267
Accounts payable 532,886 459,065
Accounts payable, affiliate 191,737 189,914
Accrued distributions 412,373 412,373
Accrued interest 407,837 409,605
Accrued property taxes 501,542 596,829
Unearned rent and tenant deposits 472,316 453,497
---------- ----------
61,179,131 61,418,550
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Partners' equity (deficit):
Limited partners' equity (64,660 units
authorized and outstanding) 8,630,117 8,998,812
Special limited partners' equity (7,749.5 units
authorized and outstanding) 6,862,188 6,862,188
General partners' deficit (989,012) (981,487)
---------- ----------
14,503,293 14,879,513
---------- ----------
$75,682,424 $76,298,063
---------- ----------
---------- ----------
</TABLE>
See notes to financial statements.
3<PAGE>
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PRUDENTIAL-BACHE/A.G. SPANOS GENESIS INCOME PARTNERS L.P., I
(A Limited Partnership)
STATEMENTS OF OPERATIONS
For the three months ended March 31, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
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<S> <C> <C>
Revenues:
Rental $ 3,819,725 $ 3,747,591
Land/Lease rentals from affiliates 165,000 165,000
Interest 42,875 36,828
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4,027,600 3,949,419
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Expenses:
Property operating expenses 1,413,809 1,372,524
Property taxes 335,595 325,510
Property management fees to affiliates 114,549 111,963
General and administrative expense 67,955 74,459
Interest expense 1,198,696 1,344,253
Management fees to affiliates 152,790 149,904
Depreciation 708,053 708,053
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3,991,447 4,086,666
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Net income (loss) $ 36,153 $ (137,247)
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Net income (loss) allocated to General Partners $ 723 $ (2,745)
---------- ----------
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Net income (loss) allocated to Limited Partners $ 35,430 $ (134,502)
---------- ----------
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Net income (loss) allocated to Special
Limited Partners $ -0- $ -0-
---------- ----------
---------- ----------
Net income (loss) per unit of limited
partnership interest $ 0.55 $ (2.08)
---------- ----------
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</TABLE>
See notes to financial statements.
4<PAGE>
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PRUDENTIAL-BACHE/A.G. SPANOS GENESIS INCOME PARTNERS L.P., I
(A Limited Partnership)
STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
For the three months ended March 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Special
Limited Limited General
Total Partners Partners Partners
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Partners' equity
(deficit)-
December 31, 1996 $14,879,513 $ 8,998,812 $ 6,862,188 $ (981,487)
Net income 36,153 35,430 -0- 723
Distributions (412,373) (404,125) -0- (8,248)
---------- ---------- ---------- ----------
Partners' equity
(deficit)-
March 31, 1997 $14,503,293 $ 8,630,117 $ 6,862,188 $ (989,012)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
See notes to financial statements.
5<PAGE>
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PRUDENTIAL-BACHE/A.G. SPANOS GENESIS INCOME PARTNERS L.P., I
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
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<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 36,153 $ (137,247)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation 708,053 708,053
Change in other assets 44,029 48,427
Change in accounts payable, affiliate 1,823 (1,957)
Change in accrued liabilities (23,234) 9,159
Change in unearned rent and tenant deposits 18,819 (14,651)
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Total adjustments 749,490 749,031
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Net cash provided by operating activities 785,643 611,784
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Cash flows from financing activities:
Proceeds from mortgage loan payable -0- 9,000,000
Mortgage loan principal amortization (236,827) (282,630)
Other mortgage loan repayments -0- (8,882,482)
Distributions to partners (412,373) (412,373)
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Net cash used in financing activities (649,200) (577,485)
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Net increase in cash and cash equivalents 136,443 34,299
Cash and cash equivalents, beginning of period 4,997,867 4,151,047
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Cash and cash equivalents, end of period $ 5,134,310 $ 4,185,346
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</TABLE>
See notes to financial statements.
6<PAGE>
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PRUDENTIAL-BACHE/A. G. SPANOS GENESIS INCOME PARTNERS L.P., I
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS(Unaudited)
NOTE A - FINANCIAL STATEMENT PREPARATION
The March 31, 1997 financial statements have been prepared without audit.
In the opinion of management, the financial statements contain all
adjustments (consisting of normal recurring accruals) necessary to present
fairly the Partnership's financial position, results of operations and cash
flows. The operating results for the three months ended March 31, 1997 may
not necessarily 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. These financial statements must
be read in conjunction with the financial statements and notes thereto
included in the Partnership's annual report for the year ended December 31,
1996.
NOTE B - PROPERTY
Property is comprised of the following:
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
-----------------------------------
<S> <C> <C>
Apartment buildings $ 77,245,362 $ 77,245,362
Equipment 4,937,209 4,937,209
Land 17,147,732 17,147,732
Land held for lease 3,891,758 2,479,098
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101,809,401 101,809,401
Less: Accumulated depreciation (31,508,421) (30,800,368)
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$ 70,300,980 $ 71,009,033
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</TABLE>
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NOTE C - RELATED PARTY TRANSACTIONS
Set forth below are the fees and other amounts relating to transactions
between the Partnership and the General Partners and their affiliates for
the three months ended March 31, 1997 and 1996.
<TABLE>
<CAPTION>
1997 1996
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<S> <C> <C>
Expensed to the General Partners:
Supervisory management fee $ 76,395 $ 74,952
Special distribution 64,645 63,202
Administrative expense reimbursements 11,750 11,750
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$152,790 $149,904
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------- -------
Expensed to A.G. Spanos Management, Inc.:
Property management fees $114,549 $111,963
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------- -------
Accrued to the Partnership:
Ground rent on Land/Leases $165,000 $165,000
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</TABLE>
Accruals of $152,790 and $152,782 for the supervisory management fee,
special distribution and administrative expense reimbursements and $38,947
and $37,132 for property management fees were outstanding at March 31, 1997
and December 31, 1996, respectively. Ground rent of $163,476 was
receivable from affiliates of the Spanos General Partner at March 31, 1997
and December 31, 1996. General Partners' capital account deficit for
financial accounting purposes exceeds the amount the General Partners would
be obligated to restore if the Partnership were to dissolve.
Prudential Securities Incorporated ("PSI"), an affiliate of the Bache
General Partner, owned 1,920 Units at March 31, 1997.
8
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NOTE D - CONTINGENCIES
On or about October 18, 1993 a putative class action, captioned Kinnes et
al. v. Prudential Securities Group Inc. et al. (93 Civ. 654) was filed in
the United States District Court for the District of Arizona, purportedly
on behalf of investors in the Partnership against the Partnership, the
Bache General Partner, PSI and a number of other defendants. On or about
November 16, 1993, a putative class action captioned Connelly et al. v.
Prudential-Bache Securities Inc. et al. (93 Civ. 713) was filed in the
United States District Court for the District of Arizona, purportedly on
behalf of investors in the Partnership against the Partnership, the Bache
General Partner, PSI and a number of other defendants. On or about
November 9, 1993, a putative class action entitled Bottner v. A.G. Spanos
Residential Partners-86 et al. (93 Civ. 7708) was filed in the United
States District Court for the Southern District of New York, purportedly on
behalf of investors in the Partnership against the General Partners, PSI,
Prudential Insurance Company of America and certain of their affiliates and
officers.
On or about February 13, 1995 an individual action, captioned Estate of
Jean Adams v. Prudential Securities, Inc. et al. (Case No. 1995 CV 00265)
was filed in the Court of Common Pleas in Stark County, Ohio against PSI,
The Prudential, the General Partners, the Partnership and affiliates of the
Spanos General Partner. The action was removed to the United States
District Court for the Northern District of Ohio (Eastern Division) on
March 15, 1995. Plaintiff alleged misrepresentations, breach of fiduciary
duties and civil conspiracy by defendants in connection with the sale of
units of the Partnership. Plaintiff sought unspecified damages, including
punitive damages.
By order of the Judicial Panel on Multidistrict Litigation dated April 14,
1994, the Kinnes and Bottner cases, by order dated June 8, 1994, the
Connelly case, and by order dated April 7, 1995, the Adams case, were
transferred to a single judge of the United States District Court for the
Southern District of New York and consolidated for pretrial proceedings
under the caption In re Prudential Securities Incorporated Limited
Partnerships Litigation (MDL Docket 1005). On June 8, 1994, plaintiffs in
the transferred cases filed a complaint that consolidated the previously
filed complaints and named as defendants, among others, PSI, certain of its
present and former employees and the General Partners. The Partnership is
not named a defendant in the consolidated complaint, but the name of the
Partnership is listed as being among the limited partnerships at issue in
the case. The consolidated complaint alleges violations of the federal and
New Jersey Racketeer Influenced and Corrupt Organizations Act ("RICO")
statutes, fraud, negligent misrepresentation, breach of fiduciary duties,
breach of third- party beneficiary contracts and breach of implied
covenants in connection with the marketing and sales of limited partnership
interests. Plaintiffs request relief in the nature of rescission of the
purchase of securities and recovery of all consideration and expenses in
connection therewith, as well as compensation for lost use of money
invested less cash
9<PAGE>
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distributions; compensatory damages; consequential damages; treble damages
for defendants' RICO violations (both federal and New Jersey); general
damages for all injuries resulting from negligence, fraud, breaches of
contract, and breaches of duty in an amount to be determined at trial;
disgorgement and restitution of all earnings, profits, benefits, and
compensation received by defendants as a result of their unlawful acts; and
costs and disbursements of the action. On November 28, 1994 the transferee
court deemed each of the complaints in the constituent actions (including
Kinnes and Bottner) amended to conform to the allegations of the
consolidated complaint. On August 9, 1995 the Bache General Partner, PSI
and other Prudential defendants entered into a Stipulation and Agreement of
Partial Compromise and Settlement with legal counsel representing
plaintiffs in the consolidated actions. The court preliminarily approved
the settlement agreement by order dated August 29, 1995 and, following a
hearing held November 17, 1995, found that the agreement was fair,
reasonable, adequate and in the best interests of the plaintiff class. The
court gave final approval to the settlement, certified a class of
purchasers of specific limited partnerships, including the Partnership,
released all settled claims by members of the class against the PSI
settling defendants and permanently barred and enjoined class members from
instituting, commencing or prosecuting any settled claim against the
released parties. The full amount due under the settlement agreement has
been paid. The consolidated action remains pending against the Spanos
General Partner and certain of its affiliates. Although the order
approving the partial settlement agreement dismissed the consolidated
complaint on the merits and with prejudice as against the PSI settling
defendants, it expressly continued the action against all nonsettling
defendants, including the Spanos General Partner, and preserved all claims
against them. The Partnership is not named a defendant in the consolidated
complaint and the action is not expected to have a material effect on the
Partnership's financial statements ; accordingly, no provision for
any loss that may result upon resolution of this matter has been made in
the accompanying financial statements.
On May 12, 1997, the Spanos General Partner and certain of its affiliates
entered into a Stipulation of Settlement with legal counsel representing
the plaintiff class in the consolidated actions. The settlement
contemplates, among other things, the sale of all of the Partnership
Properties at public auction and the subsequent liquidation and dissolution
of the Partnership. If the settlement agreement is preliminarily approved
by the Court, detailed information about the proposed auction sale and
other terms of the settlement will be sent to the Limited Partners with
proxy solicitation materials seeking the Limited Partners' consent to the
auction sale. The settlement agreement contains numerous conditions and
must be finally approved by the Court at a fairness hearing at which
Limited Partners and other interested parties will have an opportunity to
be heard. There can be no assurance that the conditions to implementation
of the settlement will be satisfied.
10<PAGE>
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On or about April 15, 1994 a multiparty petition entitled Schreiber, et al.
v. Prudential Securities, Inc., et al. (Cause No. 94-17696) was filed in
the 189th Judicial District Court of Harris County, Texas, purportedly on
behalf of investors in the Partnership against the Partnership, the General
Partners, PSI, The Prudential Insurance Company of America and a number of
other defendants. The Petition alleges common law fraud, fraud in the
inducement and negligent misrepresentation in connection with the offering
of limited partnership interests and negligence, breach of fiduciary duty,
civil conspiracy, and violations of the federal Securities Act of 1933
(sections 11 and 12) and of the Texas Securities and Deceptive Trade
Practices statutes. The suit seeks, among other things, compensatory and
punitive damages, costs and attorney's fees. Most of the plaintiffs have
released their claims against the defendants in exchange for monetary
payments by PSI. It is expected that the remaining claims will be resolved
by PSI at no cost to the Partnership. Accordingly, no provision for any
loss that may result upon resolution of this matter has been made in the
accompanying financial statements.
NOTE E - SUBSEQUENT EVENT
The Partnership paid accrued first quarter cash distributions of $404,125
to the Unitholders and $8,248 to the General Partners in May 1997.
11
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Capital Resources and Liquidity
The Partnership had cash of $5,134,000 at March 31, 1997. There are no
proposed programs for renovation, improvement or development of the
Properties other than maintenance and repairs (including major repairs) in
the ordinary course which will be paid from operations, and the
Partnership's liquidity position is considered satisfactory.
The Partnership's operating activities provided cash of $786,000 in the
first quarter of 1997, of which $41,000 reflects timing differences related
to current assets and liabilities. Of the balance, $237,000 was applied to
scheduled principal amortization on the Partnership's mortgage debt,
$412,000 was paid in cash distributions, and $96,000 was retained. Cash
flows from financing activities for the three months ended March 31, 1996
reflects the repayment of the $8,882,000 balance of the Mission Trails
mortgage with the proceeds from a new $9,000,000 mortgage from another
lender.
On May 12, 1997, the Spanos General Partner and certain of its affiliates
entered into a Stipulation of Settlement with legal counsel representing
the plaintiff class in the consolidated actions. The settlement
contemplates, among other things, the sale of all of the Partnership
Properties at public auction and the subsequent liquidation and dissolution
of the Partnership. If the settlement agreement is preliminarily approved
by the Court, detailed information about the proposed auction sale and
other terms of the settlement will be sent to the Limited Partners with
proxy solicitation materials seeking the Limited Partners' consent to the
auction sale. The settlement agreement contains numerous conditions and
must be finally approved by the Court at a fairness hearing at which
Limited Partners and other interested parties will have an opportunity to
be heard. There can be no assurance that the conditions to implementation
of the settlement will be satisfied.
Results of Operations
Apartment project rental revenue was $3,820,000 for the first three months
of 1997, an increase of 1.9% compared to the same period last year.
Average occupancy was 94.5% for the first three months of 1997 compared to
94.3% for the first three months of 1996.
Property operating expenses increased $41,000, or 3%, over the first three
months of 1996. Interest expense declined $146,000; however the 1996 figure
included non-recurring charges for loan fees for the Mission Trails
refinancing ($60,000) and corrections to the lender's 1995 interest
billings for Cypress Pointe and Comanche Place ($67,000). The balance of
the decrease reflects lower outstanding principal balances in the first
quarter of 1997 compared to the first quarter of 1996.
12
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
This information is incorporated by reference to Note D to the financial
statements filed herewith in Item 1 of Part I of the Partnership's
Quarterly Report.
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
Exhibits
4(a) Certificate of Limited Partnership of Registrant as filed
with the Secretary of State of Delaware, incorporated by
reference to Exhibit 4(a) to Amendment No. 1 to
Registration Statement on Form S-11, File No. 33-9139,
filed with the Securities and Exchange Commission on
January 28, 1987.
4(b) Amendment to Certificate of Limited Partnership of
Registrant as filed with the Secretary of State of
Delaware, incorporated by reference to Exhibit 4(b) to
Amendment No. 2 to Registration Statement on Form S-11,
File No. 33-9139, filed with the Securities and Exchange
Commission on February 20, 1987.
4(c) Amended and Restated Agreement of Limited Partnership of
Registrant, incorporated by reference to Exhibit 4(c) to
Amendment No. 2 to Registration Statement on Form S-11,
File No. 33-9139, filed with the Securities and Exchange
Commission on February 20, 1987.
13
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4(d) Amendments No. 1 through 6 dated June 3, July 2, August 3
and 20, September 10 and October 2, 1987, respectively, to
the Amended and Restated Agreement of Limited Partnership
of Registrant, incorporated by reference to Exhibit 4(d)
to Post-Effective Amendment No. 1 to Registration
Statement on Form S-11, File No. 33-9139, filed with the
Securities and Exchange Commission on November 12, 1987.
4(e) Amendments No. 7 through 13 dated December 4 and 18, 1987
and February 1, March 8 and 25, April 27 and August 12,
1988, respectively, to the Amended and Restated Agreement
of Limited Partnership of Registrant, incorporated by
reference to Exhibit 4(e) of the Annual Report on Form
10-K dated December 31, 1988, File No. 33-9139.
27 Financial Data Schedule (filed herewith)
Reports on Form 8-K
(None)
14
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
PRUDENTIAL-BACHE/A.G. SPANOS GENESIS INCOME PARTNERS, L.P., I (Registrant)
By: A.G. Spanos Residential Partners-86, General Partner
By: AGS Financial Corporation, a general partner
By: /s/Arthur J. Cole Date: February 5, 1997
---------------------------------
Arthur J. Cole
President and Chief Accounting Officer
By: A.G. Spanos Realty, Inc., a general partner
By: /s/Arthur J. Cole Date: February 5, 1997
---------------------------------
Arthur J. Cole
Vice President and Chief Accounting Officer
15
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<ARTICLE> 5
<LEGEND> The Schedule contains summary financial
information extracted from the financial
statements for Prudential-Bache/A.G. Spanos
Genesis Income Partners L.P., I, and is
qualified entirely by reference to such
financial statements.
</LEGEND>
<RESTATED>
<CIK> 000803399
<NAME> Prudential-Bache/AG Spanos Genesis Income Partners LP I
<MULTIPLIER> 1
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-1-1997
<PERIOD-END> Mar-31-1997
<PERIOD-TYPE> 3-Mos
<CASH> 5134310
<SECURITIES> 0
<RECEIVABLES> 247134
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5381444
<PP&E> 101809401
<DEPRECIATION> 31508421
<TOTAL-ASSETS> 75682424
<CURRENT-LIABILITIES> 2518691
<BONDS> 58660440
0
0
<COMMON> 0
<OTHER-SE> 14503293
<TOTAL-LIABILITY-AND-EQUITY> 75682424
<SALES> 3984725
<TOTAL-REVENUES> 4027600
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2792751
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1198696
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36153
<EPS-PRIMARY> 0.55
<EPS-DILUTED> 0
</TABLE>
