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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: 0-17683
PRUDENTIAL-BACHE/A.G. SPANOS REALTY PARTNERS L.P., I
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(Exact name of registrant as specified in charter)
Delaware 94-3069380
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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
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2
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PRUDENTIAL-BACHE/A.G. SPANOS REALTY PARTNERS L.P., I
(A Limited Partnership)
BALANCE SHEETS
(Unaudited)
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<CAPTION>
March 31, December 31,
1999 1998
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<S> <C> <C>
ASSETS
Property, net $70,827,767 $71,583,977
Cash and cash equivalents 4,439,046 4,160,132
Other assets (net of accumulated amortization
of $1,323,157 and $1,318,000, respectively) 591,042 552,192
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$75,857,855 $76,296,301
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LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities:
Mortgage loans payable $62,624,722 $62,949,730
Accounts payable 866,049 683,274
Accounts payable, affiliate 203,817 204,608
Accrued distributions -0- 394,418
Accrued interest 414,918 421,267
Unearned rent and tenant deposits 572,372 576,171
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64,681,878 65,229,468
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Partners' equity (deficit):
Limited partners' equity (316,828 units
authorized and outstanding) 3,671,772 3,564,811
Subordinated limited partners' equity (46,364
units authorized and outstanding) 8,878,175 8,878,175
General partners' deficit (1,373,970) (1,376,153)
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11,175,977 11,066,833
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$75,857,855 $76,296,301
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</TABLE>
See notes to financial statements.
3
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PRUDENTIAL-BACHE/A.G. SPANOS REALTY PARTNERS L.P., I
(A Limited Partnership)
STATEMENTS OF OPERATIONS
For the three months ended March 31, 1999 and 1998
(Unaudited)
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<CAPTION>
1999 1998
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Revenues:
Rental $ 4,083,267 $ 3,974,567
Interest 31,429 30,071
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4,114,696 4,004,638
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Expenses:
Property operating expenses 1,316,835 1,359,098
Property taxes 292,061 285,998
Property management fees to affiliates 122,253 118,720
General and administrative expense 48,900 47,957
Interest expense 1,305,963 1,256,444
Management fees to General Partners 163,330 158,982
Depreciation 756,210 756,210
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4,005,552 3,983,409
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Net income $ 109,144 $ 21,229
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Net income allocated to General Partners $ 2,183 $ 425
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Net income allocated to Limited Partners $ 106,961 $ 20,804
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Net income allocated to Subordinated
Limited Partners $ -0- $ -0-
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Net income per unit of limited partnership
interest $ 0.34 $ 0.07
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</TABLE>
See notes to financial statements.
4
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PRUDENTIAL-BACHE/A.G. SPANOS REALTY 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>
Subordinated
Limited Limited General
Total Partners Partners Partners
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<S> <C> <C> <C> <C>
Partners' equity
(deficit)-
December 31, 1998 $11,066,833 $ 3,564,811 $ 8,878,175 $(1,376,153)
Net income 109,144 106,961 -0- 2,183
---------- ---------- ---------- ----------
Partners' equity
(deficit)-
March 31, 1999 $11,175,977 $ 3,671,772 $ 8,878,175 $(1,373,970)
---------- ---------- ---------- ----------
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</TABLE>
See notes to financial statements.
5
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PRUDENTIAL-BACHE/A.G. SPANOS REALTY PARTNERS L.P., I
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1999 and 1998
(Unaudited)
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1999 1998
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Cash flows from operating activities:
Net income $ 109,144 $ 21,229
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Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 756,210 756,210
Amortization of loan fees included in
interest expense 5,157 5,157
Change in other assets (44,007) (53,538)
Change in accrued liabilities 176,426 206,119
Change in accounts payable, affiliate (791) (5,586)
Change in unearned rent and tenant deposits (3,799) (4,469)
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Total adjustments 889,196 903,893
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Net cash provided by operating activities 998,340 925,122
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Cash flows from financing activities:
Mortgage loan principal amortization (325,008) (299,249)
Distributions to partners (394,418) (394,418)
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(719,426) (693,667)
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Net increase in cash and cash equivalents 278,914 231,455
Cash and cash equivalents, beginning of period 4,160,132 4,161,323
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Cash and cash equivalents, end of period $ 4,439,046 $ 4,392,778
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</TABLE>
See notes to financial statements.
6
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PRUDENTIAL-BACHE/A. G. SPANOS REALTY 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 $ 83,030,825 $ 83,030,825
Equipment 4,369,974 4,369,974
Land 18,053,226 18,053,226
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105,454,025 105,454,025
Less: Accumulated depreciation (34,626,258) (33,870,048)
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$ 70,827,767 $ 71,583,977
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</TABLE>
In February and March 1999, the Partnership entered into a contracts with
three buyers to sell the Properties for an aggregate sale price of
$110,943,921. The sale of seven of the Properties closed in April and May
1999. The eighth is expected to close in June 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 $3,000,000 in legal
fees to the counsel representing the Unitholders, $2,755,026 of which
amount was paid on May 6, 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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<S> <C> <C>
Expensed to the General Partners:
Supervisory management fee $ 81,665 $ 79,491
Special distribution 67,830 65,656
Administrative expense reimbursements 13,835 13,835
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$163,330 $158,982
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Expensed to A.G. Spanos Management, Inc.:
Property management fees $122,253 $118,720
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</TABLE>
Accruals of $40,487 and $40,848 for property management fees and $163,330
and $163,760 for General Partner fees were outstanding at March 31, 1999
and December 31, 1998, respectively. 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 4,663 Units at March 31, 1999.
8
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NOTE D - SUBSEQUENT EVENT
In May 1999, the Partnership paid cash distributions of $31,682,800,
$7,761,036 and $599,790 to the Unitholders, Subordinated Limited Partners
and General Partners, respectively, from the sale of seven of the
Properties.
9<PAGE>
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Capital Resources and Liquidity
In June 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 February and March 1999, the
Partnership entered into contracts with three buyers to sell the
Properties. The sale of seven of the Properties closed in April and May
1999. The eighth is expected to close in June 1999. The Partnership
expects to make liquidating distributions of approximately $110 per Unit in
1999. An initial liquidation distribution of $100 per unit was paid on
May 6, 1999.
The Partnership's operating activities provided cash of $998,000 in the
first quarter of 1999, of which $127,000 reflects timing differences
related to current assets and liabilities. Of the balance, $325,000 was
applied to scheduled principal amortization on the Partnership's mortgage
debt and $546,000 was retained.
Results of Operations
Rental revenue was $4,083,000 for the first three months of 1999, an
increase of 2.7% compared to the same period last year, primarily due to
increased occupancy and effective rental rates at Sandpebble Village,
Regency Square, Harbor Pointe and Bernardo Crest. The average occupancy of
the seven Apartment Projects was 93.4% for the first three months of 1999
compared to 93.6% for the first three months of 1998.
Property operating expenses decreased $42,000 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
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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
Registration Statement on Form S-11, File No. 33-22613,
filed with the Securities and Exchange Commission on
October 14, 1988.
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. 1 to Registration Statement on Form S-11,
File No. 33-22613, filed with the Securities and
Exchange Commission on October 14, 1988.
4(c) Amended and Restated Agreement of Limited Partnership of
Registrant, incorporated by reference to Exhibit 4(c) to
Amendment No. 1 to Registration Statement on Form S-11,
File No. 33-22613, filed with the Securities and
Exchange Commission on October 14, 1988.
11
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4(d) Amendments No. 1 through 7 dated November 21, and
December 30, 1988 and January 31, February 28, March 31,
April 28, and May 31, 1989 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. 33-22613, filed with the
Securities and Exchange Commission on June 30, 1989.
4(e) Amendments No. 8 through 14 dated June 30, August 11
and 31, September 29, October 31, and December 1 and 22,
1989 to the Amended and Restated Agreement of Limited
Partnership of Registrant, incorporated by reference to
Exhibit 4(e) to Annual Report on Form 10-K, File No.
0-17683, filed with the Securities and Exchange
Commission on March 28, 1991.
4(f) Amendment No. 15 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. 0-17683.
10(a) Agreement for Purchase and Sale of Real Property dated
February 24, 1999 by and among the Partnership as Seller
and General Services Corporation as Buyer, incorporated
by reference to Exhibit 10(a) to Annual Report on Form
10-K, File No. 0-17683.
10(b) Agreement for Purchase and Sale of Real Property dated
March 3, 1999 by and among the Partnership as Seller and
SGD Investments, Inc. as Buyer, incorporated by reference
to Exhibit 10(b) to Annual Report on Form 10-K, File No.
0-17683.
10(c) Agreement for Purchase and Sale of Real Property dated
March 11, 1999 by and among the Partnership as Seller and
WXI/SPN Real Estate Limited Partnership as Buyer,
incorporated by reference to Exhibit 10(c) to Annual
Report on Form 10-K, File No. 0-17683.
27 Financial Data Schedule (filed herewith)
Reports on Form 8-K
On March 11, 1999 the Partnership filed a report on Form
8-K dated February 24, 1999 to report that the
Partnership had entered into contracts to sell four of
the Properties.
On March 19, 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 four of 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 REALTY PARTNERS, L.P., I (Registrant)
By: A.G. Spanos Realty Partners, L.P., 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 Capital, 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
Realty Partners L.P., I, and is qualified
entirely by reference to such financial
statements.
</LEGEND>
<RESTATED>
<CIK> 000844159
<NAME> Prudential-Bache/A.G. Spanos Realty Partners L.P., I
<MULTIPLIER> 1
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-START> Jan-1-1999
<PERIOD-END> Mar-31-1999
<PERIOD-TYPE> 3-Mos
<CASH> 4439046
<SECURITIES> 0
<RECEIVABLES> 591042
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5030088
<PP&E> 105454025
<DEPRECIATION> 34626258
<TOTAL-ASSETS> 75857855
<CURRENT-LIABILITIES> 2057156
<BONDS> 62624722
0
0
<COMMON> 0
<OTHER-SE> 11175977
<TOTAL-LIABILITY-AND-EQUITY> 75857855
<SALES> 4083267
<TOTAL-REVENUES> 4114696
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2699589
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1305963
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 109144
<EPS-PRIMARY> 0.34
<EPS-DILUTED> 0
</TABLE>
