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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A - Amendment #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 December 31, 1996
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 0-20638
PRUDENTIAL-BACHE TAX CREDIT PROPERTIES L.P.
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(Exact name of Registrant as specified in its charter)
Delaware 13-3519080
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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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Item 2. A revised Management's Discussion and Analysis of Financial Condition
and Results of Operations is being filed as Amendment #1 to Form 10-Q for the
quarter ended December 31, 1996 due to the inclusion of updated information
with respect to the operating deficit guaranty agreement at Summer Creek Villas.
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PRUDENTIAL-BACHE TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Prudential-Bache Tax Credit Properties L.P. (the ``Partnership'') invested in
eight Local Partnerships that are owners of low-income multi-family residential
complexes. The Local Partnerships are operated in accordance with the low-income
housing rules and regulations in order to protect the related tax credits. The
Partnership's primary sources of funds are rental revenues (which are fully
utilized at the property level) and, to a lesser extent, interest earned on
working capital reserves. A working capital reserve ($121,000 at December 31,
1996) is maintained to fund operations and contingencies of the Partnership. The
working capital reserve is invested in a tax-free money market fund. Based on
the reduced level of the Partnership's working capital reserve, the General
Partner has deferred the receipt of its management fee since January 1, 1995 and
the reimbursement of general and administrative costs (excluding printing costs)
incurred on behalf of the Partnership since April 1, 1996. (See Note B to the
financial statements.)
At the Local Partnership level, certain Local General Partners and/or their
affiliates have made guarantees with respect to the Local Partnerships which,
under certain circumstances, require their funding cash flow deficits pursuant
to operating deficit guaranty agreements. These operating deficit advances do
not bear interest and are repayable by the Local Partnership in accordance with
the respective Local Partnership agreement. As of December 31, 1996, there are
still operating deficit guaranty agreements in effect at Summer Creek Villas and
Papillion Heights.
The Summer Creek Villas Local Partnership continues to experience severe cash
flow deficits. The maximum funding obligation of the Local General Partner under
the Summer Creek Villas operating deficit guaranty agreement which expired on
December 31, 1996 was $3,392,000, of which $1,653,000 was funded through
December 31, 1996. Of the total funded, the Local General Partner has elected to
treat $933,000 as non-repayable advances. The Local General Partner is also
obligated to fund operating deficits during a second guaranty period commencing
August 1996 and expiring July 1999. The maximum funding obligation during this
second guaranty period is $924,000. As of December 31, 1996, the financial
statements of the Partnership include $773,000 as ``Due to general partners and
affiliates of Local Partnerships'' under the Summer Creek Villas operating
deficit guaranty agreement due to the three month lag in recording the financial
information of the Local Partnerships.
The Papillion Heights operating deficit guaranty agreement is in effect until
such date that the net operating income is sufficient to cover 115% of the debt
service for twelve consecutive months, as defined. Of the $170,000 maximum
funding obligation, approximately $40,000 has been funded to date and such
amount is included in the financial statements as ``Due to general partners and
affiliates of Local Partnerships'' as of December 31, 1996.
In addition, the Partnership's financial statements as of December 31, 1996
also reflect payables of approximately $150,000 under certain operating deficit
guaranty agreements which have expired.
The Local Partnerships generated net operating income before debt service and
depreciation of $2,967,000 and $3,435,000 during the nine-month periods ended
December 31, 1996 and 1995, respectively. Debt service payments (interest and
principal) made during the same periods were $3,051,000 and $3,388,000,
respectively.
Results of Operations
The operating results of the Local Partnerships consolidated herein are for
the nine-month periods ended September 30. Information disclosed below with
respect to each Local Partnership is consistent with this method of
presentation.
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Net operating income before debt service and depreciation of the Local
Partnerships was as follows:
<TABLE>
<CAPTION>
Nine Months
Ended December 31,
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Property 1996 1995
<S> <C> <C>
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Hubbard's Ridge $ 155,000 $ 202,000
Cutler Canal II 375,000 429,000
Diamond Street 59,000 83,000
Papillion Heights 100,000 188,000
Hill Top Homes 243,000 303,000
Summer Creek Villas 1,769,000 1,948,000
Brookland Park Plaza 153,000 169,000
Compton Townhouses 113,000 113,000
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$2,967,000 $3,435,000
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---------- ----------
</TABLE>
Rental income decreased $147,000 for the nine months ended December 31, 1996
as compared to 1995 mainly as a result of decreases of $124,000, $44,000 and
$21,000, respectively, at Summer Creek Villas, Diamond Street and Cutler Canal
II due to lower occupancies. These decreases were partially offset by increases
of $17,000 each at Hubbard's Ridge and Hill Top Homes due to higher rental
rates.
Other income (consisting primarily of application fees, forfeited security
deposits and operating deficit guarantees) decreased $105,000 for the nine
months ended December 31, 1996 as compared to 1995 primarily due to a $94,000
adjustment in 1995 relating to an operating deficit guaranty agreement of a
Local Partnership.
Operating and other expense increased $62,000 for the nine months ended
December 31, 1996 as compared to 1995. The variance was mainly due to increases
of $20,000, $16,000 and $15,000 at Hill Top Homes, Hubbard's Ridge and Cutler
Canal II, respectively, as a result of the recognition of uncollected rents.
Taxes and insurance expense increased $57,000 for the nine months ended
December 31, 1996 as compared to 1995. The variance was mainly due to increases
of $27,000, $17,000 and $16,000 at Brookland Park Plaza, Hill Top Homes and
Hubbard's Ridge, respectively, as a result of the timing of recording both real
estate taxes and property insurance.
Repairs and maintenance expense increased $78,000 for the nine months ended
December 31, 1996 as compared to 1995 mainly due to increases of $42,000,
$29,000 and $20,000 at Summer Creek Villas, Hubbard's Ridge and Hill Top Homes,
respectively. The increase at Summer Creek Villas was the result of higher
carpet cleaning and replacement and general maintenance costs; at Hubbard's
Ridge due to damage caused by wind storms, partially offset by the receipt of
insurance proceeds; and at Hill Top Homes due to higher general maintenance
costs. These variances were partially offset by a decrease of $14,000 at
Papillion Heights due to lower repairs and replacement costs compared to the
prior year. Repairs and maintenance expense for the Local Partnerships decreased
$9,000 for the three months ended December 31, 1996 as compared to 1995
primarily due to Papillion Heights for the reasons discussed above.
General and administrative expense decreased $41,000 for the nine months
ended December 31, 1996 as compared to 1995 primarily due to lower costs to
administer the Partnership.
Partnership management fees expense decreased $45,000 and Property management
fees expense increased $38,000 for the nine months ended December 31, 1996 as
compared to 1995 primarily due to a reclassification between the two categories.
Comparative three month 1996 and 1995 operating results generally reflect the
trends discussed for the comparative nine month periods, except for repairs and
maintenance expense as described above.
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Property Information
Occupancies at the Local Partnerships were as follows:
<TABLE>
<CAPTION>
September 30,
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Property 1996 1995
<S> <C> <C>
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Hubbard's Ridge 81% 98%
Cutler Canal II 89 96
Diamond Street 92 100
Papillion Heights 96 100
Hill Top Homes 88 98
Summer Creek Villas 86 92
Brookland Park Plaza 100 97
Compton Townhouses 97 92
</TABLE>
(Occupancies are calculated by dividing occupied units by total available
units.)
The Partnership holds a 66.5% interest in Summer Creek Villas, a 98% interest
in Hubbard's Ridge, Hill Top Homes and Compton Townhouses and a 98.99% interest
in Cutler Canal II, Diamond Street, Papillion Heights and Brookland Park Plaza.
There were no significant changes in occupancies at the above properties as of
February 2, 1997 except for a continuing decrease in the occupancy rate to 82%
at Summer Creek Villas.
* * * *
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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 Tax Credit Properties L.P.
By: Prudential-Bache Properties, Inc.
A Delaware corporation, General Partner
By: /s/ Eugene D. Burak Date: April 3, 1997
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Eugene D. Burak
Vice President
Chief Accounting Officer for the
Registrant
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