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UNITED STATES
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, 1999
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
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(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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Part I. Financial Information
Item 1: Balance Sheets - March 31, 1999 and
December 31, 1998 . . . . . . . . . . . . . . . . . 3
Statements of operations for the three months ended
March 31, 1999 and 1998 . . . . . . . . . . . . . . 4
Statement of changes in partners' equity (deficit)
for the three months ended March 31, 1999 . . . . . 5
Statements of cash flows for the three months
ended March 31, 1999 and 1998 . . . . . . . . . . . 6
Notes to Financial Statements . . . . . . . . . . . 7
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . 10
Part II. Other Information . . . . . . . . . . . . . . . . . 11
</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,
1999 1998
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<S> <C> <C>
ASSETS
Property, net $64,636,556 $65,344,609
Cash and cash equivalents 6,816,968 6,386,116
Accounts receivable, affiliate 328,476 163,476
Other assets 305,820 348,882
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$72,087,820 $72,243,083
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LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities:
Mortgage loans payable $56,652,407 $56,917,509
Accounts payable 533,733 512,015
Accounts payable, affiliate 204,063 205,900
Accrued distributions -0- 412,373
Accrued interest 390,032 402,819
Accrued property taxes 451,979 442,283
Unearned rent and tenant deposits 518,748 513,654
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58,750,962 59,406,553
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Partners' equity (deficit):
Limited partners' equity (64,660 units
authorized and outstanding) 7,487,014 6,996,693
Special limited partners' equity (7,749.5
units authorized and outstanding) 6,862,188 6,862,188
General partners' deficit (1,012,344) (1,022,351)
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13,336,858 12,836,530
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$72,087,820 $72,243,083
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</TABLE>
See notes to financial statements.
3
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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, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
Revenues:
Rental $ 4,102,750 $ 4,010,138
Land/Lease rentals from affiliates 165,000 165,000
Interest 57,636 49,972
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4,325,386 4,225,110
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Expenses:
Property operating expenses 1,301,772 1,327,624
Property taxes 305,663 311,297
Property management fees to affiliates 123,633 120,422
General and administrative expense 71,616 74,602
Interest expense 1,150,211 1,190,017
Management fees to affiliates 164,110 160,406
Depreciation 708,053 708,053
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3,825,058 3,892,421
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Net income $ 500,328 $ 332,689
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Net income allocated to General Partners $ 10,007 $ 6,654
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Net income allocated to Limited Partners $ 490,321 $ 326,035
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Net income allocated to Special Limited
Partners $ -0- $ -0-
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Net income per unit of limited partnership
interest $ 7.58 $ 5.04
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</TABLE>
See notes to financial statements.
4
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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, 1999
(Unaudited)
<TABLE>
<CAPTION>
Special
Limited Limited General
Total Partners Partners Partners
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<S> <C> <C> <C> <C>
Partners' equity
(deficit)-
December 31, 1998 $12,836,530 $ 6,996,693 $ 6,862,188 $(1,022,351)
Net income 500,328 490,321 -0- 10,007
---------- ---------- ---------- ----------
Partners' equity
(deficit)-
March 31, 1999 $13,336,858 $ 7,487,014 $ 6,862,188 $(1,012,344)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
See notes to financial statements.
5
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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, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
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Cash flows from operating activities:
Net income $ 500,328 $ 332,689
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 708,053 708,053
Change in other assets 43,062 8,509
Change in accounts receivable, affiliate (165,000) -0-
Change in accounts payable, affiliate (1,837) (2,975)
Change in accrued liabilities 18,627 74,140
Change in unearned rent and tenant deposits 5,094 (7,134)
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Total adjustments 607,999 780,593
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Net cash provided by operating activities 1,108,327 1,113,282
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Cash flows from financing activities:
Mortgage loan principal amortization (265,102) (251,289)
Distributions to partners (412,373) (412,373)
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Net cash used in financing activities (677,475) (663,662)
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Net increase in cash and cash equivalents 430,852 449,620
Cash and cash equivalents, beginning of period 6,386,116 5,323,329
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Cash and cash equivalents, end of period $ 6,816,968 $ 5,772,949
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</TABLE>
See notes to financial statements.
6
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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, 1999 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, 1999 are
not 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,
1998. The Partnership intents to liquidate in 1999 after all
distributions have been paid to the partners.
NOTE B - PROPERTY
Property is comprised of the following:
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<CAPTION>
March 31, 1999 December 31, 1998
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<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 2,479,098 2,479,098
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101,809,401 101,809,401
Less: Accumulated depreciation (37,172,845) (36,464,792)
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$ 64,636,556 $ 65,344,609
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</TABLE>
On March 11, 1999, the Partnership entered into an agreement to sell all
the Properties to WXI/SPN Real Estate Limited Partnership for $126,333,500.
Under the terms of the leases for the Land/Leases, approximately
$20,117,000 of the sales price (which includes approximately $19,871,000 of
existing mortgage debt) is allocable to A.G. Spanos Construction, Inc., an
affiliate of the Spanos General Partner, as consideration for its sale of
the Del Rio and Cameron Creek improvements. (The Partnership owned the
land underlying Del Rio and Cameron Creek, but not the improvements.) The
sale of seven of the properties closed April 23, 1999. The sale of the
other two closed May 12, 1999. Pursuant to the Settlement Agreement
approved by the court in connection with the Prudential Securities
Incorporated Limited Partnership Litigation (MDL Docket 1005), the
Partnership will pay approximately $3,300,000 in legal fees to the counsel
representing the Unitholders, $2,614,513 of which amount was paid on May 4,
1999.
7
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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, 1999 and 1998.
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<CAPTION>
1999 1998
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Expensed to the General Partners:
Supervisory management fee $ 82,055 $ 80,203
Special distribution 70,305 68,453
Administrative expense reimbursements 11,750 11,750
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$164,110 $160,406
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Expensed to A.G. Spanos Management, Inc.:
Property management fees $123,633 $120,422
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Accrued to the Partnership:
Ground rent on Land/Leases $165,000 $165,000
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</TABLE>
Accruals of $164,110 and $164,986 for the supervisory management fee,
special distribution and administrative expense reimbursements and $39,953
and $40,914 for property management fees were outstanding at March 31, 1999
and December 31, 1998, respectively. Ground rent of $328,476 and $163,476
was receivable from affiliates of the Spanos General Partner at March 31,
1999 and December 31, 1998, respectively. All accrued ground rent was paid
in May 1999. The 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, 1999.
8
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NOTE D - SUBSEQUENT EVENT
In May 1999, the Partnership paid cash distributions of $30,066,900,
$5,615,552 and $495,280 to the Unitholders, Special Limited Partners and
General Partners, respectively, from the sale of seven of the Properties.
9
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Capital Resources and Liquidity
In July 1998, a majority in interest of the limited partners approved a
proposal to sell all the Partnership's properties at a public auction and
then distribute the sale proceeds in liquidation of the Partnership. The
proposed auction and liquidation are part of an overall settlement of
certain litigation which had been pending in the United States District
Court for the Southern District of New York under the caption In re
Prudential Securities Incorporated Limited Partnerships Litigation (MDL
Docket 1005). In July 1998, the settlement, including the auction and
liquidation, was approved by the court. In March 1999, the Partnership
entered into a contract to sell the Properties. The sale closed in April
and May 1999. The Partnership expects to make liquidating distributions of
approximately $650 per Unit in 1999. An initial liquidation distribution
of $465 per unit was paid on May 4, 1999.
The Partnership's operating activities provided cash of $1,273,000 in the
first quarter of 1999, of which $65,000 reflects timing differences related
to current assets and liabilities. Of the balance, $265,000 was applied to
scheduled principal amortization on the Partnership's mortgage debt and
$943,000 was retained.
Results of Operations
Rental revenue was $4,103,000 for the first three months of 1999, an
increase of 2.3% compared to the same period last year, primarily due to
increased occupancy and effective rental rates at Cypress Pointe, Comanche
Place, Chelsea Park and Mission Trails. The average occupancy of the seven
Apartment Projects was 95.6% for the first three months of 1999 compared to
94.8% for the first three months of 1998.
Property operating expenses decreased $30,000 compared to the first three
months of 1998, principally because of lower repair and maintenance costs.
Property management fees, which are 3% of property revenue, increased with
the increase in revenue.
10<PAGE>
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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
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.
11
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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.
4(f) Amendment No. 14 dated August 12, 1998, to the
Amended and Restated Agreement of Limited Partnership
of Registrant, incorporated by reference to Exhibit 4(f)
of the Quarterly Report on Form 10-Q dated September 30,
1998, File No. 33-9139.
10 Agreement for Purchase and Sale of Real Property dated
March 11, 1999 by and among the Partnership and A.G. Spanos
Construction, Inc. as Sellers and WXI/SPN Real Estate
Limited Partnership as Buyer, incorporated by
reference to Exhibit 10 of the Annual Report on Form
10-K dated December 31, 1998, File No. 33-9139.
27 Financial Data Schedule (filed herewith)
Reports on Form 8-K
On March 22, 1999 the Partnership filed a report on Form
8-K dated March 11, 1999 to report that the Partnership
had entered into a contract to sell the Properties.
12
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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/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: May 17, 1999
---------------------------------
Arthur J. Cole
President and Chief Accounting Officer
By: A.G. Spanos Realty, Inc., a general partner
By: /s/Arthur J. Cole Date: May 17, 1999
---------------------------------
Arthur J. Cole
Vice President and Chief Accounting Officer
13
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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-31-1999
<PERIOD-START> Jan-1-1999
<PERIOD-END> Mar-31-1999
<PERIOD-TYPE> 3-Mos
<CASH> 6816968
<SECURITIES> 0
<RECEIVABLES> 634296
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7451264
<PP&E> 101809401
<DEPRECIATION> 37172845
<TOTAL-ASSETS> 72087820
<CURRENT-LIABILITIES> 2098555
<BONDS> 56652407
0
0
<COMMON> 0
<OTHER-SE> 13336858
<TOTAL-LIABILITY-AND-EQUITY> 72087820
<SALES> 4267750
<TOTAL-REVENUES> 4325386
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2674847
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1150211
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 500328
<EPS-PRIMARY> 7.58
<EPS-DILUTED> 0
</TABLE>
