-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TbydkeH0C6PUrRzcfhigM541GHutEa6IgDZsv8fguzM7LcQX8dGMtwcFxT3zSPNF x+HfAq/6xJI174ITV1XH/A== 0000898733-99-000979.txt : 19991117 0000898733-99-000979.hdr.sgml : 19991117 ACCESSION NUMBER: 0000898733-99-000979 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRUDENTIAL BACHE EQUITEC REAL ESTATE PARTNERSHIP CENTRAL INDEX KEY: 0000757191 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 942949474 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-14271 FILM NUMBER: 99754833 BUSINESS ADDRESS: STREET 1: ONE SEAPORT PLAZA CITY: NEW YORK STATE: NY ZIP: 10292 BUSINESS PHONE: 2122141016 10-Q 1 PRUDENTIAL-BACHE EQUITEC REAL ESTATE 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 September 30, 1999 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 0-14271 PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP, A California Limited Partnership - -------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) California 94-2949474 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) One Seaport Plaza, New York, N.Y. 10292-0128 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 214-3500 N/A - -------------------------------------------------------------------------------- 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 __ Part I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP, A California Limited Partnership CONSOLIDATED STATEMENT OF NET ASSETS (in process of liquidation) (Unaudited)
September 30, 1999 - ---------------------------------------------------------------------------------------------------- (in thousands, except for depository unit amount) ASSETS Cash and cash equivalents $ 1,956 Interest receivable 19 --------------- Total assets 1,975 --------------- LIABILITIES Due to affiliates 189 Other liabilities, including estimated liquidation costs 129 --------------- Total liabilities 318 --------------- Net assets available to Unitholders and General Partners $ 1,657 --------------- --------------- Depository units issued and outstanding 68,795 --------------- ---------------
- -------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS (in process of liquidation) (Unaudited)
GENERAL UNITHOLDERS PARTNERS TOTAL - ---------------------------------------------------------------------------------------------------- (in thousands) Net assets--April 1, 1999 $ 3,199 $ (278) $ 2,921 Gain on sale of properties 16,237 432 16,669 Net income (loss) from liquidating activities 1,118 (35) 1,083 Distributions (18,919) (97) (19,016) -------------- -------- ------- Net assets--September 30, 1999 $ 1,635 $ 22 $ 1,657 -------------- -------- ------- -------------- -------- ------- - ---------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these statements.
2 PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP, A California Limited Partnership CONSOLIDATED STATEMENT OF FINANCIAL CONDITION (going concern basis) (Unaudited)
December 31, 1998 - -------------------------------------------------------------------------------------------------- (in thousands) ASSETS Investment in property: Land $ 10,842 Buildings, improvements and equipment 42,009 Less: Accumulated depreciation (23,587) Allowance for loss on impairment of assets (500) ------------ Net investment in property 28,764 Cash and cash equivalents 1,896 Prepaid expenses and other assets, net 1,019 ------------ Total assets $ 31,679 ------------ ------------ LIABILITIES AND PARTNERS' CAPITAL Liabilities Notes payable $ 26,650 Due to affiliates 635 Accounts payable and accrued liabilities 1,003 Security deposits and deferred revenue 335 Real estate taxes payable 68 ------------ Total liabilities 28,691 ------------ Partners' capital Unitholders (68,795 depositary units issued and outstanding) 3,265 General Partners (277) ------------ Total partners' capital 2,988 ------------ Total liabilities and partners' capital $ 31,679 ------------ ------------ - -------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of this statement.
3 PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP, A California Limited Partnership CONSOLIDATED STATEMENTS OF OPERATIONS (going-concern basis) (Unaudited)
For the three For the nine For the three months ended months ended months ended March 31, September 30, September 30, 1999 1998 1998 - ------------------------------------------------------------------------------------------------------- (in thousands, except for depositary unit amounts) REVENUES Operating $1,747 $ 5,413 $ 1,790 Recovery of expenses 96 339 114 ------------ ------------- ------------- 1,843 5,752 1,904 ------------ ------------- ------------- EXPENSES Property operating 717 2,090 791 Interest 570 1,858 626 Depreciation and amortization 590 1,764 590 General and administrative 33 647 95 ------------ ------------- ------------- 1,910 6,359 2,102 ------------ ------------- ------------- Net loss $ (67) $ (607) $ (198) ------------ ------------- ------------- ------------ ------------- ------------- ALLOCATION OF NET LOSS Unitholders $ (66) $ (601) $ (196) ------------ ------------- ------------- ------------ ------------- ------------- General Partners $ (1) $ (6) $ (2) ------------ ------------- ------------- ------------ ------------- ------------- Net loss per depositary unit $(0.96) $ (8.74) $ (2.85) ------------ ------------- ------------- ------------ ------------- ------------- - -------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (going-concern basis) (Unaudited)
GENERAL UNITHOLDERS PARTNERS TOTAL - ---------------------------------------------------------------------------------------------------- (in thousands) Partners' capital (deficit)--December 31, 1998 $ 3,265 $ (277) $ 2,988 Net loss (66) (1) (67) -------------- -------- ------- Partners' capital (deficit)--March 31, 1999 $ 3,199 $ (278) $ 2,921 -------------- -------- ------- -------------- -------- ------- - ---------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these statements.
4 PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP, A California Limited Partnership CONSOLIDATED STATEMENT OF CASH FLOWS (going-concern basis) (Unaudited)
For the nine months ended September 30, 1998 - --------------------------------------------------------------------------------------------------- (in thousands) CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (607) --------------- Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 1,764 Lease concessions-effective rents 42 Leasing commissions paid (74) Changes in: Prepaid expenses and other assets, net (110) Due to affiliates 28 Accounts payable and accrued liabilities 58 Real estate taxes payable 2 --------------- Total adjustments 1,710 --------------- Net cash provided by operating activities 1,103 CASH FLOWS FROM INVESTING ACTIVITIES Building improvements (296) --------------- CASH FLOWS FROM FINANCING ACTIVITIES Loan fees (110) --------------- Net increase in cash and cash equivalents 697 Cash and cash equivalents at beginning of period 1,106 --------------- Cash and cash equivalents at end of period $ 1,803 --------------- --------------- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Interest paid $ 1,868 --------------- --------------- - --------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of this statement.
5 PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP, A California Limited Partnership NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1999 (Unaudited) A. General As a result of its pending liquidation, the Partnership changed its method of accounting from the going-concern basis by adopting the liquidation basis of accounting effective April 1, 1999. Accordingly, the net assets of the Partnership at September 30, 1999 are stated at liquidation value, whereby the assets have been valued at their estimated net realizable values and the liabilities include estimated amounts to be incurred through the date of liquidation of the Partnership. Additionally, due to the change to the liquidation basis of accounting on April 1, 1999, the Partnership ceased depreciating the properties for financial statement purposes only. The actual remaining net proceeds from liquidation will depend upon a variety of factors and are likely to differ from the estimated amounts reflected in the accompanying financial statements. The Partnership intends to liquidate in 1999 after all liabilities have been resolved and distributions have been paid to the Unitholders. Prior to April 1, 1999, the books and records of the Partnership were maintained on a going concern accrual basis of accounting. These financial statements have been prepared without audit. In the opinion of Prudential-Bache Properties, Inc. ('PBP') and Glenborough Corporation and Robert Batinovich (together, 'Glenborough') (collectively, the 'General Partners'), the financial statements contain all adjustments necessary to present fairly such information subject to the effects of any further liquidation accounting adjustments that would have been required had the current realized values of assets and the amounts of liabilities been known when Prudential-Bache/Equitec Real Estate Partnership, A California Limited Partnership (the 'Partnership') first adopted the liquidation basis of accounting as of April 1, 1999. 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, 1998. Net assets at September 30, 1999 have been adjusted to properly reflect the allocation of Unitholders' and General Partners' capital in anticipation of the liquidation of the Partnership. On July 15, 1999, the Partnership sold its Properties to affiliates of the Glenborough general partners (the 'Purchaser') for gross proceeds of $47,145,000. The gross proceeds were reduced by the mortgage debt, as well as certain credits to the Purchaser. The net sales price was in excess of the carrying amount of the Properties and resulted in a gain of $16,669,000 for financial reporting purposes. On August 12, 1999, the Partnership made a distribution of $275 per unit, representing substantially all of the net proceeds from the sale of the Properties. Prior to December 31, 1999, the Partnership expects to distribute any cash remaining after resolving all of its liabilities and then dissolve. 6 B. Net Income From Liquidating Activities Net income from liquidating activities for the six months ended September 30, 1999 consisted of:
(in thousands) Operating revenues and recovery of expenses $ 2,264 -------------- Property operating expenses 904 Interest expense 659 General and administrative expenses (including estimated liquidation expenses) (382) -------------- 1,181 -------------- Net income from liquidating activities $ 1,083 -------------- --------------
The credit balance for general and administrative expenses resulted from the reversal in the six months ended September 30, 1999 of certain overaccruals regarding the sale of the Partnership's properties and the anticipated liquidation of the Partnership. C. Related Parties The General Partners and their affiliates perform services for the Partnership which include, but are not limited to: accounting and financial management; registrar, transfer and assignment functions; property management; investor communications; printing and other administrative services. The General Partners and their affiliates receive reimbursements for costs incurred in connection with these services, the amount of which is limited by the provisions of the Partnership Agreement. At September 30, 1999 and December 31, 1998, the total liability outstanding to PBP was $134,000 and $540,000, respectively, and $55,000 and $95,000 due to Glenborough, respectively. Included in the balance at September 30, 1999 are costs expected to be payable to PBP and its affiliates during the anticipated remaining liquidation period. The actual charges to be incurred by the Partnership may differ from the amounts accrued as of September 30, 1999. The Partnership maintains an account with the Prudential Institutional Liquidity Portfolio Fund, an affiliate of PBP, for investment of its available cash in short-term instruments pursuant to the guidelines established by the Partnership Agreement. Prudential Securities Incorporated, an affiliate of PBP, owns 180 depositary units at September 30, 1999. 7 PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP, A California Limited Partnership ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources On July 15, 1999, the Partnership sold its Properties to affiliates of the Glenborough general partners (the 'Purchaser') for gross proceeds of $47,145,000. The gross proceeds were reduced by the mortgage debt, as well as certain credits to the Purchaser. The net sales price was in excess of the carrying amount of the Properties and resulted in a gain of $16,669,000 for financial reporting purposes. On August 12, 1999, the Partnership made a distribution of $275 per unit, representing substantially all of the net proceeds from the sale of the Properties. Prior to December 31, 1999, the Partnership expects to distribute any cash remaining after resolving all of its liabilities and then dissolve. Results of Operations As a result of the Partnership adopting the liquidation basis of accounting in accordance with generally accepted accounting principles as of April 1, 1999 and thus not reporting results of operations thereafter, there is no management discussion comparing the corresponding 1999 and 1998 periods. Year 2000 Risk As the Partnership is expected to be liquidating in 1999 and will not have operations in the year 2000, the General Partners do not believe it is appropriate to include a discussion of the Year 2000 Risk. Item 3. Quantitative and Qualitative Disclosures About Market Risk Not applicable. 8 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: 2 Consent Solicitation Statement dated May 28, 1998 filed on the Registrant's Proxy Statement on Schedule 14A and incorporated by reference. 3 and 4 Amended and Restated Limited Partnership Agreement of Registrant dated February 11, 1985 (incorporated by reference to Amendment No. 1 to the Registrant's Form S-11 Registration Statement filed on February 14, 1985) and Amendment No. 1 thereto dated April 18, 1985 (incorporated by reference to Form 8-A filed on February 28, 1986), as amended on March 25, 1994 (incorporated by reference to Registrant's 1994 Annual Report on Form 10-K) Amended and Restated Agreement between General Partners dated December 28, 1990 (incorporated by reference to the Registrant's 1990 Annual Report filed on Form 10-K) 10(k) Purchase Agreement, dated as of Effective Date, by and among the Registrant, Glenborough Realty Trust Incorporated and Glenborough Properties, L.P.(1) 10(l) Amendment to Purchase Agreement, dated December 19, 1997 by and among the Registrant, Glenborough Realty Trust Incorporated and Glenborough Properties, L.P.(1) 10(m) Second Amendment to Purchase Agreement, dated April 27, 1998 by and among the Registrant, Glenborough Realty Trust Incorporated and Glenborough Properties, L.P.(1) 10(n) Third Amendment to Purchase Agreement, dated November 16, 1998 by and among the Registrant, Glenborough Realty Trust Incorporated and Glenborough Properties, L.P. (incorporated by reference to the Registrant's Quarterly Report for the period ended September 30, 1998 filed on Form 10-Q) 27 Financial Data Schedule (filed herewith) (b) Reports on Form 8-K--None --------------- (1) Filed as an exhibit to Registrant's Proxy Statement on Schedule 14A dated May 28, 1998 and incorporated by reference. 9 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, hereunto duly authorized. Prudential-Bache/Equitec Real Estate Partnership, A California Limited Partnership By: Prudential-Bache Properties, Inc. A Delaware corporation, General Partner By: /s/ Eugene D. Burak Date: November 15, 1999 ---------------------------------------------- Eugene D. Burak Vice President Chief Accounting Officer for the Registrant 10 EX-27 2 ART. 5 FDS FOR 3RD QUARTER 10-Q
5 The Schedule contains summary financial information extracted from the financial statements for Prudential-Bache Equitec Real Estate and is qualified in its entirety by reference to such financial statements 0000757191 Prudential-Bache Equitec Real Estate 1 Dec-31-1999 Jan-1-1999 Sep-30-1999 9-mos 1,956,000 0 19,000 0 0 0 0 0 1,975,000 318,000 0 0 0 0 1,657,000 1,975,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Registrant adopted the liquidation basis of accounting on April 1, 1999, and, accordingly, does not reflect operations subsequent to April 1, 1999. See Note A to the financial statements for further details.
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