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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1995
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 0-13518
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-2
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 75-1933081
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
corporation or organization)
One Seaport Plaza, New York, N.Y. 10292-0116
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 214-1016
Securities registered pursuant to Section 12(b) of the Act:
None
- --------------------------------------------------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
- --------------------------------------------------------------------------------
(Title of class)
Indicate by check mark 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 __
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [CK]
DOCUMENTS INCORPORATED BY REFERENCE
Annual Report to Limited Partners for the year ended December 31, 1995 is
incorporated by reference into Parts I, II and IV of this Annual Report on Form
10-K.
Amended and Restated Certificate and Agreement of Limited Partnership,
included as part of the Registration Statement on Form S-11 (File No. 2-88785)
filed with Securities and Exchange Commission pursuant to Rule 424(b) of the
Securities Act of 1933, as amended, is incorporated by reference into Part IV of
this Annual Report on Form 10-K.
Index to exhibits can be found on pages 9 and 10.
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-2
(a limited partnership)
TABLE OF CONTENTS
PART I PAGE
Item 1 Business......................................................................... 3
Item 2 Properties....................................................................... 4
Item 3 Legal Proceedings................................................................ 5
Item 4 Submission of Matters to a Vote of Limited Partners.............................. 5
PART II
Item 5 Market for the Registrant's Units and Related Limited Partner Matters............ 5
Item 6 Selected Financial Data.......................................................... 6
Item 7 Management's Discussion and Analysis of Financial Condition and Results of
Operations..................................................................... 6
Item 8 Financial Statements and Supplementary Data...................................... 6
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure..................................................................... 6
PART III
Item 10 Directors and Executive Officers of the Registrant............................... 6
Item 11 Executive Compensation........................................................... 8
Item 12 Security Ownership of Certain Beneficial Owners and Management................... 8
Item 13 Certain Relationships and Related Transactions................................... 8
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K
Financial Statements and Financial Statement Schedules........................... 9
Exhibits......................................................................... 9
Reports on Form 8-K.............................................................. 10
SIGNATURES.................................................................................. 15
2
PART I
Item 1. Business
General
Prudential-Bache/Watson & Taylor, Ltd.-2 (the ``Registrant''), a Texas
limited partnership, was formed on November 14, 1983 and will terminate on
December 31, 2050 unless terminated sooner under the provisions of the Amended
and Restated Certificate and Agreement of Limited Partnership (the ``Partnership
Agreement''). The Registrant was formed for the purpose of acquiring,
developing, owning and operating mini-storage and business center facilities
with the proceeds raised from the initial sale of units of limited partnership
interest (``Units''). The Registrant's fiscal year for book and tax purposes
ends on December 31.
The Registrant operates eight improved properties, five of which are business
center facilities with mini-warehouses and three of which are solely
mini-warehouse facilities. For more information regarding the Registrant's
properties, see Item 2 Properties. For more information regarding the
Registrant's operations, see Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations in the Registrant's Annual Report
to Limited Partners for the year ended December 31, 1995 (``Registrant's Annual
Report'') which is filed as an exhibit hereto. The Registrant is engaged solely
in the business of real estate investment; therefore, presentation of industry
segment information is not applicable.
On December 15, 1995, the Management Committee of the Registrant determined
to seek bids for all of the properties held by the Registrant. As of March 22,
1996, preliminary bids have been received for all properties. If bids for the
properties are deemed acceptable by the Registrant, the Registrant intends to
enter into agreements to sell the properties, subject to the approval of the
limited partners owning a majority of the Units as required by the Partnership
Agreement. If such sales are approved and consummated, the Registrant will
liquidate and distribute its net assets to its partners. There can, of course,
be no assurance that acceptable bids will be received or that any transactions
will be consummated.
General Partners
The general partners of the Registrant are Prudential-Bache Properties, Inc.
(``PBP''), George S. Watson and A. Starke Taylor, Ill (collectively, the
``General Partners''). PBP is the Managing General Partner and is responsible
for the day-to-day operations of the Registrant and its investments. See Note E
of the financial statements in the Registrant's Annual Report which is filed as
an exhibit hereto.
Competition
The General Partners and/or their affiliates have formed, and may continue to
form, various entities to engage in businesses which may be competitive with the
Registrant.
The Registrant competes with national and regional real estate owners and
operators, some of whom have more experience and resources than the Registrant.
Such owners and operators may include insurance companies, mortgage banks,
pension funds, and other real estate investors, including foreign investors,
syndicated partnerships, and real estate investment trusts. The primary factors
affecting a particular property's ability to successfully compete against other
properties include the location of such property, the suitability of its design
to a prospective tenant's needs, the manner in which it is managed and marketed,
and rental rates. The extent to which the Registrant is affected by competition
will depend, in part, on existing market conditions. The property managers,
Public Storage Management, Inc. and Public Storage Commercial Properties Group,
Inc., manage other properties which compete with the Registrant's properties
within the same geographical area.
Employees
The Registrant has no employees. Management and administrative services for
the Registrant are performed by the General Partners and their affiliates
pursuant to the Partnership Agreement. The General Partners and/or their
affiliates receive compensation and reimbursement of expenses in connection with
such activities as described in section 11.7 of the Partnership Agreement. See
Note E of the financial statements in the Registrant's Annual Report which is
filed as an exhibit hereto.
3
Item 2. Properties
As of December 31, 1995 the Registrant owns the following properties:
Average
Occupancy Rates Monthly
for the year Rental Rates
ended Per Unit
December 31, Land Rentable as of December 31,
Property Location 1995(1) (in acres) Units 1995
- -------------------------------- ----------------- ---------- -------- ----------------------
Arlington (Arlington, Texas)
Mini-warehouse 90.8% 6.25 293 $ 19 - $107
Commercial 81 $ 125 - $950
--------
374
--------
Arapaho (Richardson, Texas)
Mini-warehouse 94.3 6.01 417 $ 19 - $315
Commercial 62 $ 225 - $790
--------
479
--------
South May/I-240 (Oklahoma City,
Oklahoma)
Mini-warehouse 86.4 3.05 379 $ 15 - $ 79
Commercial 15 $ 166 - $1,080
--------
394
--------
Santa Fe/79th St. (Oklahoma
City, Oklahoma)
Mini-warehouse 87.9 3.40 389 $ 24 - $143
--------
South May/44th St. (Oklahoma
City, Oklahoma)
Mini-warehouse 96.6 2.67 500 $ 13 - $63
--------
Timbercrest (Tulsa, Oklahoma)
Mini-warehouse 95.4 6.08 120 $ 34 - $155
Commercial 73 $ 220 - $790
--------
193
--------
Cherry Hill (Cherry Hill, New
Jersey)
Mini-warehouse 89.5 3.17 331 $ 29 - $415
--------
Hampton Park (Capitol Heights,
Maryland)
Mini-warehouse 92.9 5.87 130 $ 29 - $280
Commercial 68 $ 250 - $950
--------
198
--------
2,858
--------
--------
- ------------------------------------------------------------------------------------------------------------
(1) Average occupancy rates are calculated by averaging the monthly occupancies determined by dividing
occupied square footage by available square footage as of each month-end.
The Managing General Partner believes the Registrant's Properties are
adequately insured.
4
For the years ended December 31, 1995, 1994 and 1993, the following
properties' rental revenue exceeded 15% of the Registrant's total revenue:
1995 1994 1993
---- ---- ----
Arapaho 19% 19% 20%
Arlington 17 18 18
No single tenant accounted for 10% or more of the total revenue for any of
the three years in the period ended December 31, 1995.
For additional information describing the Registrant's properties, see
Supplementary Schedule III--Real Estate and Accumulated Depreciation on page 13
in Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K.
Item 3. Legal Proceedings
This information is incorporated by reference to Note G of the financial
statements of the Registrant's Annual Report which is filed as an exhibit
hereto.
Item 4. Submission of Matters to a Vote of Limited Partners
None
PART II
Item 5.Market for the Registrant's Units and Related Limited Partner Matters
As of March 1, 1996, there were 3,625 holders of record owning 51,818 Units,
inclusive of 258, 130 and 130 equivalent limited partnership units held by PBP
and Messrs. Watson and Taylor, respectively. A significant secondary market for
the Units has not developed, and it is not expected that one will develop in the
future. There are also certain restrictions set forth in Section 17.3 of the
Partnership Agreement limiting the ability of a limited partner to transfer
Units. Consequently, holders of Units may not be able to liquidate their
investments in the event of an emergency or for any other reason.
The following per Unit cash distributions were paid to limited partners on or
about 45 days after the end of the specified quarter.
Quarter Ended 1995 1994
- --------------- ----- -----
March 31 $3.71 $4.64
June 30 3.71 5.96
September 30 3.71 5.00
December 31 3.71 3.71
Distributions for the years ended December 31, 1995 and 1994 were made from
current and previously undistributed cash generated by the operations of the
Registrant's properties. Limited partner distributions were approximately
$766,000 and $1,034,000 for the years ended December 31, 1995 and 1994,
respectively. The amount of limited partner distributions that represented a
return of capital on a generally accepted accounting principles (GAAP) basis was
approximately $282,000 and $635,000 for the years ended 1995 and 1994,
respectively (return of capital on a GAAP basis is calculated as limited partner
distributions less net income allocated to limited partners). There are no
material restrictions upon the Registrant's present or future ability to make
distributions in accordance with the provisions of the Partnership Agreement.
The Registrant currently expects that recurring quarterly cash distributions
will continue to be paid in the foreseeable future from property operations. For
discussion of other factors that may affect the amounts of future distributions,
see Management's Discussion and Analysis of Financial Condition and Results of
Operations on pages 10 and 11 of the Registrant's Annual Report which is filed
as an exhibit hereto.
5
Item 6. Selected Financial Data
The following table presents selected financial data of the Registrant. This
data should be read in conjunction with the financial statements of the
Registrant and the notes thereto on pages 2 through 9 of the Registrant's Annual
Report which is filed as an exhibit hereto.
Year ended December 31,
-------------------------------------------------------------------
1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
Total revenues $ 2,841,354 $ 2,615,970 $ 2,461,721 $ 2,400,913 $ 2,436,405
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Provision for loss on
impairment of assets $ -- $ -- $ -- $ -- $ 1,418,000
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Net income (loss) $ 489,304 $ 402,785 $ 347,081 $ 355,077 $(1,064,271)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Limited partner income (loss)
per Unit $ 9.40 $ 7.73 $ 6.66 $ 6.82 $ (18.90)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total assets $14,086,449 $14,263,400 $15,072,631 $15,732,923 $16,362,156
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total distributions $ 773,886 $ 1,044,203 $ 886,930 $ 1,077,008 $ 1,247,987
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Limited partner distributions
per Unit $ 14.86 $ 20.05 $ 17.03 $ 20.68 $ 23.85
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
- ----------------------------------------------------------------------------------------------------
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This information is incorporated by reference to pages 10 and 11 of the
Registrant's Annual Report which is filed as an exhibit hereto.
Item 8. Financial Statements and Supplementary Data
The financial statements are incorporated by reference to pages 2 through 9
of the Registrant's Annual Report which is filed as an exhibit hereto.
Item 9.Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant
There are no directors or executive officers of the Registrant. The
Registrant is managed by the Managing General Partner.
The Registrant, the Registrant's General Partners, PBP's directors and
executive officers and any persons holding more than ten percent of the
Registrant's Units are required to report their initial ownership of such Units
and any subsequent changes in that ownership to the Securities and Exchange
Commission on Forms 3, 4 and 5. Such General Partners, executive officers,
directors and other persons who own greater than ten percent of the Registrant's
Units are required by Securities and Exchange Commission regulations to furnish
the Registrant with copies of all Forms 3, 4 or 5 they file. All of these
requirements were satisfied on a timely basis. In making these disclosures, the
Registrant has relied solely on written representations of the General Partners,
PBP's directors and executive officers and other persons who own greater than
ten percent of the Registrant's Units or copies of the reports they have filed
with the Securities and Exchange Commission during and with respect to its most
recent fiscal year.
6
Prudential-Bache Properties, Inc., Managing General Partner
The directors and executive officers of PBP and their positions with regard
to managing the Registrant are as follows:
Name Position
Thomas F. Lynch, III President, Chief Executive Officer,
Chairman of the Board of Directors and Director
Barbara J. Brooks Vice President--Finance and Chief Financial Officer
Eugene D. Burak Vice President and Chief Accounting Officer
Chester A. Piskorowski Vice President
Frank W. Giordano Director
Nathalie P. Maio Director
THOMAS F. LYNCH, III, age 37, is the President, Chief Executive Officer,
Chairman of the Board of Directors and a Director of PBP. He is a Senior Vice
President of Prudential Securities Incorporated (``PSI''), an affiliate of PBP.
Mr. Lynch also serves in various capacities for other affiliated companies. Mr.
Lynch joined PSI in November 1989.
BARBARA J. BROOKS, age 47, is the Vice President--Finance and Chief Financial
Officer of PBP. She is a Senior Vice President of PSI. Ms. Brooks also serves in
various capacities for other affiliated companies. She has held several
positions within PSI since 1983. Ms. Brooks is a certified public accountant.
EUGENE D. BURAK, age 50, is a Vice President of PBP. He is a First Vice
President of PSI. Prior to joining PSI in September 1995, he was a management
consultant for three years and was with Equitable Capital Management Corporation
from March 1990 to May 1992. Mr. Burak is a certified public accountant.
CHESTER A. PISKOROWSKI, age 52, is a Vice President of PBP. He is a Senior
Vice President of PSI and is the Senior Manager of the Specialty Finance Asset
Management area. Mr. Piskorowski has held several positions within PSI since
April 1972. Mr. Piskorowski is a member of the New York and Federal Bars.
FRANK W. GIORDANO, age 53, is a Director of PBP. He is a Senior Vice
President of PSI and an Executive Vice President and General Counsel of
Prudential Mutual Fund Management, Inc., an affiliate of PSI. Mr. Giordano also
serves in various capacities for other affiliated companies. He has been with
PSI since July 1967.
NATHALIE P. MAIO, age 45, is a Director of PBP. She is a Senior Vice
President and Deputy General Counsel of PSI and supervises non-litigation legal
work for PSI. She joined PSI's Law Department in 1983; presently, she also
serves in various capacities for other affiliated companies.
James M. Kelso ceased to serve as President, Chief Executive Officer,
Chairman of the Board of Directors and Director effective June 30, 1995.
Effective June 30, 1995,Thomas F. Lynch, III was elected President, Chief
Executive Officer, Chairman of the Board of Directors and Director. Robert J.
Alexander ceased to serve as Vice President effective August 25, 1995. Eugene D.
Burak was elected Vice President effective October 9, 1995.
There are no family relationships among any of the foregoing directors or
executive officers. All of the foregoing directors and executive officers have
indefinite terms.
Individual General Partners
George S. Watson, age 55, is a financial specialist and a certified public
accountant. He is also a member of the board of directors of Lyco Energy
Corporation as well as the Advisory Council of the University of Texas Business
School and a member of its Chancellor's Council. Mr. Watson attended the
University of Texas in Austin, graduating summa cum laude in 1963 with a B.B.A.
in accounting and finance. He received his M.B.A. in accounting and finance from
the University of Texas in 1965, graduating first in his class and
7
summa cum laude. He has received various awards and scholarships and is a member
of many fraternal organizations including Phi Kappa Phi, the honorary scholastic
fraternity.
A. Starke Taylor, III, age 52, holds a bachelor of business administration
degree from Southern Methodist University which was awarded in 1966. He is past
president of the North Dallas Chamber of Commerce. Active in the community, Mr.
Taylor is the chairman of the board of Priority One, an international missionary
organization, the founding chairman of the board of the Park Central Athletic
Association, a member of the Dallas regional board of the Salvation Army, and a
board member of the Dallas Theological Seminary. Mr. Taylor was recognized in
1983 by D Magazine as one of Dallas' 10 most outstanding young business leaders.
There are no family relationships among any of the foregoing individual
General Partners.
Item 11. Executive Compensation
The Registrant does not pay or accrue any fees, salaries or any other form of
compensation to either individual General Partner or to directors and officers
of the Managing General Partner for their services. Certain officers and
directors of the Managing General Partner receive compensation from affiliates
of the Managing General Partner, not from the Registrant, for services performed
for various affiliated entities, which may include services performed for the
Registrant; however, the Managing General Partner believes that any compensation
attributable to services performed for the Registrant is immaterial. See also
Item 13 Certain Relationships and Related Transactions for information regarding
reimbursement to the General Partners for services provided to the Registrant.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of March 1, 1996 no individual General Partner or director or officer of
the Managing General Partner owns directly or beneficially any interest in the
voting securities of the Managing General Partner.
As of March 1, 1996, no individual General Partner or director or officer of
the Managing General Partner owns directly or beneficially any of the Units
issued by the Registrant. However, the General Partners have contributed to the
Registrant and, based on such contribution, they received ``equivalent units''
entitling them to participate in the distributions to the limited partners and
in the Registrant's profits and losses in the same proportion that the General
Partners' capital contribution bears to the total capital contributions of the
limited partners. The Managing General Partner has retained its right to receive
funds from the Registrant, such as General Partner distributions and
reimbursement of expenses, but has waived its right to share in any limited
partner cash distributions and allocation of Registrant's profits and losses
based upon such equivalent units.
As of March 1, 1996, no limited partner beneficially owns more than five
percent (5%) of the outstanding Units issued by the Registrant.
Item 13. Certain Relationships and Related Transactions
The Registrant has and will continue to have certain relationships with the
General Partners and their affiliates. However, there were no direct financial
transactions between the Registrant and the individual General Partners or the
directors or officers of the Managing General Partner in 1995.
Reference is made to Notes A and E of the financial statements in the
Registrant's Annual Report which is filed as an exhibit hereto, which identify
the related parties and discuss the services provided by these parties and the
amounts paid or payable for their services.
8
PART IV
Page
Number
in Annual
Report
---------
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Financial Statements and Report of Independent Auditors--Incorporated by
reference to the Registrant's Annual Report which is filed as an exhibit
hereto
Report of Independent Auditors 2
Financial Statements:
Statements of Financial Condition--December 31, 1995 and 1994 3
Statements of Operations--Three years ended December 31, 1995 4
Statements of Changes in Partners' Capital--Three years ended December 31, 4
1995
Statements of Cash Flows--Three years ended December 31, 1995 5
Notes to Financial Statements 6
2. Financial Statement Schedules and Consent of Independent Auditors
Consent of Independent Auditors
Schedules:
II--Valuation and Qualifying Accounts and Reserves--Three years ended
December 31, 1995
III--Real Estate and Accumulated Depreciation at December 31, 1995
Notes to Schedule III--Real Estate and Accumulated Depreciation
All other schedules have been omitted because they are not applicable or the
required information is included in the financial statements and the notes
thereto.
3. Exhibits
Description:
3.01 Amended and Restated Certificate and Agreement of Limited Partnership
(1)
3.02 Amendment Number 8 to the Amended and Restated Certificate and
Agreement of Limited Partnership (2)
4.01 Revised Form of Certificate of Limited Partnership Interest (3)
10.01 Management Agreement (1)
10.02 Property Management Agreement dated as of November 1, 1988 by and
between the Registrant and Public Storage Commercial Properties Group,
Inc. (3)
10.03 Property Management Agreement dated as of November 1, 1988 by and
between the Registrant and Public Storage Management, Inc. (3)
10.04 Agreement Relating to General Partner Interests (1)
9
13.01 Annual Report to Limited Partners for the year ended December 31, 1995
(4) (with the exception of the information and data incorporated by
reference in Items 3, 7 and 8 of this Annual Report on Form 10-K, no
other information or data appearing in the Registrant's Annual Report
is to be deemed filed as part of this report.)
27. Financial Data Schedule (4)
(b) Reports on Form 8-K
Registrant's Current Report on Form 8-K dated December 6, 1995, as filed
with the Securities and Exchange Commission on December 6, 1995, relating to
Item 5 regarding the communication of certain information to the limited
partners.
Registrant's Current Report on Form 8-K dated December 15, 1995, as filed
with the Securities and Exchange Commission on December 26, 1995, relating
to Item 5 regarding the intention of the Partnership to solicit bids for the
Partnership's properties.
- ------------------
(1) Filed as an exhibit to Registration Statement on Form S-11 (No. 2-88785)
and incorporated herein by reference.
(2) Filed as an exhibit to Registrant's Form 10-Q for the quarter ended March
31, 1990 and incorporated herein by reference.
(3) Filed as an exhibit to Registrant's Form 10-K for the year ended December
31, 1988 and incorporated herein by reference.
(4) Filed herewith.
10
CONSENT OF INDEPENDENT AUDITORS
To the Partners
Prudential-Bache/Watson & Taylor, Ltd.-2
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Prudential-Bache/Watson & Taylor, Ltd.-2 of our report dated February 16,
1996, included in the 1995 Annual Report to Limited Partners of
Prudential-Bache/Watson & Taylor, Ltd.-2.
Our audits also included the financial statement schedules of
Prudential-Bache/Watson & Taylor, Ltd.-2 listed in Item 14(a). These schedules
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion based on our audits. In our opinion, the financial statement
schedules referred to above, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
Ernst & Young LLP
New York, New York
March 29, 1996
11
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-2
(a limited partnership)
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
- -------------------------------------------------------------------------------------------------------
Allowance for Loss on Impairment of Assets
Deductions - Amounts
Year Ended Balance at Additions - Amounts Written-off During Balance at
December 31, Beginning of Year Reserved During Year Year End of Year
- ------------ ----------------- -------------------- -------------------- -----------
1993 $ 1,418,000 -- -- $ 1,418,000
1994 $ 1,418,000 -- -- $ 1,418,000
1995 $ 1,418,000 -- -- $ 1,418,000
- -------------------------------------------------------------------------------------------------------
12
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-2
(a limited partnership)
SCHEDULE III--REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995
Initial cost to
Registrant Costs Gross amount at which carried at
(Note B) capitalized close of period
----------------------------- subsequent ---------------------------------------------
Description Buildings and to Buildings and Total
(Note A) Land improvements acquisition Land improvements (Note C)
- ----------------------------- ---------- -------------- ------------ ---------- -------------- -----------
Arlington
(Arlington, Texas) $ 886,569 $1,769,760 $ 1,735,255 $ 886,569 $ 3,505,015 $ 4,391,584
Arapaho
(Richardson, Texas) 664,196 963,980 1,925,005 666,834 2,886,347 3,553,181
South May/I-240
(Oklahoma City, Oklahoma) 428,878 -- 1,623,671 428,878 1,623,671 2,052,549
Sante Fe/79th St.
(Oklahoma City, Oklahoma) 207,497 1,044,865 168,421 207,497 1,213,286 1,420,783
South May/44th St.
(Oklahoma City, Oklahoma) 178,086 995,949 117,902 178,086 1,113,851 1,291,937
Timbercrest
(Tulsa, Oklahoma) 1,443,197 -- 2,744,414 1,443,197 2,744,414 4,187,611
Cherry Hill
(Cherry Hill, New Jersey) 165,570 1,339,597 201,266 165,570 1,540,863 1,706,433
Hampton Park
(Capitol Heights, Maryland) 925,595 -- 3,262,551 926,441 3,261,705 4,188,146
---------- -------------- ------------ ---------- -------------- -----------
$4,899,588 $6,114,151 $11,778,485 $4,903,072 $ 17,889,152 $22,792,224
---------- -------------- ------------ ---------- -------------- -----------
---------- -------------- ------------ ---------- -------------- -----------
- ---------------------------------------------------------------------------------------------------------------------------------
Life on
depreciation
in latest
Accumulated Statement of
Description depreciation Date(s) of Date Operations
(Note A) (Note D) construction acquired is computed
- ----------------------------- ------------- ------------- -------- ------------
Arlington 5 to
(Arlington, Texas) $ 1,751,544 1984 1984 25 years
Arapaho 5 to
(Richardson, Texas) 1,333,300 1984 1984 25 years
South May/I-240 5 to
(Oklahoma City, Oklahoma) 720,560 1984/85 1984 25 years
Sante Fe/79th St. 5 to
(Oklahoma City, Oklahoma) 583,872 1982 1984 25 years
South May/44th St. 5 to
(Oklahoma City, Oklahoma) 537,020 1982 1984 25 years
Timbercrest 5 to
(Tulsa, Oklahoma) 1,275,978 1984/85 1984 25 years
Cherry Hill 5 to
(Cherry Hill, New Jersey) 809,259 1974 1983 25 years
Hampton Park 5 to
(Capitol Heights, Maryland) 1,263,440 1985/86 1984 25 years
-------------
$ 8,274,973
-------------
-------------
- ---------------------------------------------------------------------------------------------------------
See notes on the following page
13
PRUDENTIAL-BACHE/WATSON & TAYLOR, LTD.-2
(a limited partnership)
NOTES TO SCHEDULE III
December 31, 1995
NOTE A--There are no mortgages, deeds of trust or similar encumbrances against
any of the properties.
NOTE B--Initial cost represents the initial purchase price of the properties
including acquisition fees.
NOTE C--RECONCILIATION SUMMARY OF TRANSACTIONS--REAL ESTATE OWNED
Year ended December 31,
-------------------------------------------
1995 1994 1993
----------- ----------- -----------
Balance at beginning of year.......................... $22,623,910 $22,494,603 $22,357,361
Net additions during the year......................... 168,314 129,307 137,242
----------- ----------- -----------
Balance at close of year.............................. $22,792,224 $22,623,910 $22,494,603
----------- ----------- -----------
----------- ----------- -----------
An allowance for loss on impairment is provided for the above assets in the
amount of $1,418,000.
The aggregate cost of land, buildings and improvements and furniture and
fixtures for Federal income tax purposes for the tax year ended December 31,
1995 was $22,793,988.
NOTE D--RECONCILIATION SUMMARY OF TRANSACTIONS--ACCUMULATED DEPRECIATION
Year ended December 31,
-------------------------------------------
1995 1994 1993
----------- ----------- -----------
Balance at beginning of year.......................... $ 7,511,313 $ 6,778,084 $ 6,062,723
Depreciation during the year charged to expense....... 763,660 733,229 715,361
----------- ----------- -----------
Balance at close of year.............................. $ 8,274,973 $ 7,511,313 $ 6,778,084
----------- ----------- -----------
----------- ----------- -----------
14
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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/Watson & Taylor, Ltd.-2
By: Prudential-Bache Properties, Inc.,
A Delaware corporation,
Managing General Partner
By: /s/ Eugene D. Burak Date: March 29, 1996
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Eugene D. Burak
Vice President and
Chief Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities (with respect to the General Partners) and on
the dates indicated.
By: Prudential-Bache Properties, Inc.,
A Delaware corporation,
Managing General Partner
By: /s/ Thomas F. Lynch, III Date: March 29, 1996
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Thomas F. Lynch, III
President, Chief Executive Officer and
Chairman of the Board of Directors
By: /s/ Barbara J. Brooks Date: March 29, 1996
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Barbara J. Brooks
Vice President-Finance and
Chief Financial Officer
By: /s/ Eugene D. Burak Date: March 29, 1996
------------------------------------------------------------------
Eugene D. Burak
Vice President
By: /s/ Frank W. Giordano Date: March 29, 1996
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Frank W. Giordano
Director
By: /s/ Nathalie P. Maio Date: March 29, 1996
------------------------------------------------------------------
Nathalie P. Maio
Director
15