-----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, GtalcvJ1kegb6LHqpNjeZw4N3IpPBkt0aZZKUaeHGT7m6/mQg+jfs9HsdwvXyVYS jWXuh5b8amKb6b3xSG0hBA== 0000950147-98-000363.txt : 19980512 0000950147-98-000363.hdr.sgml : 19980512 ACCESSION NUMBER: 0000950147-98-000363 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980511 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PARTICIPATING INCOME PROPERTIES 1986 LP CENTRAL INDEX KEY: 0000797977 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 860570015 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-16720 FILM NUMBER: 98615839 BUSINESS ADDRESS: STREET 1: 17207 N PERIMETER DR STREET 2: THE PERIMETER CENTER CITY: SCOTTSDALE STATE: AZ ZIP: 85255 BUSINESS PHONE: 6025854500 MAIL ADDRESS: STREET 1: 17207 N PERIMETER DR CITY: SCOTTSDALE STATE: AZ ZIP: 85255-5402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FFCA INVESTOR SERVICES CORP 86-B CENTRAL INDEX KEY: 0000797978 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 860557949 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-16721 FILM NUMBER: 98615840 BUSINESS ADDRESS: STREET 1: 17207 N PERIMETER DR STREET 2: C/O FINANCIAL CTR CITY: SCOTTSDALE STATE: AZ ZIP: 85255 BUSINESS PHONE: 6025854500 MAIL ADDRESS: STREET 1: 17207 N PERIMETER DR CITY: SCOTTSDALE STATE: AZ ZIP: 85255-5402 10-Q 1 QUARTERLY REPORT 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, 1998 ------------------------------------------------- [ ] 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 0-16720 PARTICIPATING INCOME PROPERTIES 1986, L.P. and FFCA INVESTOR SERVICES CORPORATION 86-B - -------------------------------------------------------------------------------- (Exact Name of Co-Registrants as Specified in Their Organizational Documents) Delaware 86-0570015 - -------------------------------------------------------------------------------- (Partnership State of Organization) (Partnership I.R.S. Employer Identification Number) Delaware 86-0557949 - -------------------------------------------------------------------------------- (Corporation State of Incorporation) (Corporation I.R.S. Employer Identification Number) The Perimeter Center 17207 North Perimeter Drive Scottsdale, Arizona 85255 - -------------------------------------------------------------------------------- (Address of principal executive offices) (zip code) Co-Registrants' telephone number including area code (602) 585-4500 ---------------------------- 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 X No ----- ----- PART 1 - FINANCIAL INFORMATION Item l. Financial Statements. ------ -------------------- PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE CONSOLIDATED BALANCE SHEETS MARCH 31, 1998 AND DECEMBER 31, 1997 (Unaudited)
March 31, December 31, 1998 1997 ------------ ------------ ASSETS ------ CASH AND CASH EQUIVALENTS $ 5,786,675 $ 2,402,680 RECEIVABLES FROM LESSEES 151,608 161,608 SECURED NOTES RECEIVABLE 92,390 100,569 PROPERTY SUBJECT TO OPERATING LEASES, at cost Land 5,766,190 6,773,272 Buildings 28,456,079 29,669,322 Equipment 626,781 626,781 ------------ ------------ 34,849,050 37,069,375 Less - Accumulated depreciation 11,994,561 12,253,903 ------------ ------------ 22,854,489 24,815,472 ------------ ------------ Total assets $ 28,885,162 $ 27,480,329 ============ ============ LIABILITIES AND PARTNERS' CAPITAL --------------------------------- DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 4,730,901 $ 1,366,497 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 53,707 52,297 PAYABLE TO GENERAL PARTNER (Note 1) 101,574 -- RENTAL DEPOSITS 114,400 114,400 ------------ ------------ Total liabilities 5,000,582 1,533,194 ------------ ------------ MINORITY INTEREST (14,815) (16,239) ------------ ------------ PARTNERS' CAPITAL (DEFICIT): General partner (157,986) (171,205) Limited partners 24,057,381 26,134,579 ------------ ------------ Total partners' capital 23,899,395 25,963,374 ------------ ------------ Total liabilities and partners' capital $ 28,885,162 $ 27,480,329 ============ ============
PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (Unaudited) 1998 1997 ---------- ---------- REVENUES: Rental $1,037,825 $1,072,247 Participating rentals 460,326 413,241 Interest and other 47,544 26,152 Gain on sale of property 1,725,741 -- ---------- ---------- 3,271,436 1,511,640 ---------- ---------- EXPENSES: General partner fees (Note 1) 235,910 131,523 Depreciation 300,940 329,134 Operating 51,537 48,777 ---------- ---------- 588,387 509,434 ---------- ---------- MINORITY INTEREST IN INCOME 2,957 1,168 ---------- ---------- NET INCOME $2,680,092 $1,001,038 ========== ========== NET INCOME ALLOCATED TO: General partner $ 26,801 $ 10,010 Limited partners 2,653,291 991,028 ---------- ---------- $2,680,092 $1,001,038 ========== ========== NET INCOME PER LIMITED PARTNERSHIP UNIT (based on 51,687 units held by limited partners) $ 51.33 $ 19.17 ========== ========== PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL FOR THE THREE MONTHS ENDED MARCH 31, 1998 (Unaudited)
Limited Partners General --------------------------- Partner Number Total Amount of Units Amount Amount ------------ ------------ ------------ ------------ BALANCE, December 31, 1997 $ (171,205) 51,687 $ 26,134,579 $ 25,963,374 Net income 26,801 -- 2,653,291 2,680,092 Distribution to partners, cash from operations (13,582) -- (1,344,705) (1,358,287) Return of capital to limited partners -- -- (3,385,784) (3,385,784) ------------ ------------ ------------ ------------ BALANCE, March 3l, 1998 $ (157,986) 51,687 $ 24,057,381 $ 23,899,395 ============ ============ ============ ============
PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (Unaudited)
1998 1997 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,680,092 $ 1,001,038 Adjustments to net income: Depreciation 300,940 329,134 Gain on sale of property (1,725,741) -- Minority interest in income 2,957 1,168 Change in assets and liabilities: Decrease in receivables from lessees 10,000 5,106 Increase in payable to general partner 101,574 4,517 Increase (decrease) in accounts payable and accrued liabilities 1,410 (2,086) ----------- ----------- Net cash provided by operating activities 1,371,232 1,338,877 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of property 3,385,784 -- Principal collections on secured notes receivable 8,179 7,403 ----------- ----------- Net cash provided by investing activities 3,393,963 7,403 ----------- ----------- CASH FLOWS FOR FINANCING ACTIVITIES: Partner distributions declared (1,358,287) (1,329,843) Return of capital to limited partners declared (3,385,784) -- Increase (decrease) in distribution payable 3,364,404 (4,575) Distribution to minority interest (1,533) (1,497) ----------- ----------- Net cash used in financing activities (1,381,200) (1,335,915) ----------- ----------- NET INCREASE IN CASH AND CASH EQUIVALENTS 3,383,995 10,365 CASH AND CASH EQUIVALENTS, beginning of period 2,402,680 2,346,371 ----------- ----------- CASH AND CASH EQUIVALENTS, end of period $ 5,786,675 $ 2,356,736 =========== ===========
PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE -------------------------------------------------------- Note to Consolidated Financial Statements ----------------------------------------- March 31, 1998 -------------- 1) TRANSACTIONS WITH RELATED PARTIES: --------------------------------- A subordinated real estate disposition fee equal to three percent of the selling price on the disposition of any real property (subject to certain limitations) is payable to FFCA Management Company Limited Partnership (the general partner of Participating Income Properties 1986, L.P. (the Partnership)) only after the limited partners have received an amount equal to their Adjusted Capital Contribution, as defined, and a cumulative, non-compounded return of 10% per annum on their Adjusted Capital Contribution. A subordinated real estate disposition fee amounting to $101,574 has been accrued by the Partnership representing three percent of the selling price of the Boise Idaho travel plaza, which was sold in February 1998 for a cash sales price of $3,385,784. PART I - FINANCIAL INFORMATION - -------------------------------- Item 2. Management's Discussion and Analysis of - ------ Financial Condition and Results of Operations --------------------------------------------- As of March 31, 1998, Participating Income Properties 1986, L.P., a Delaware limited partnership, (the Registrant), had received $51,687,000 in gross proceeds from its offering of Units. Net funds available for investment, after payment of sales commissions, organization costs and acquisition fees, amounted to $45,232,790. The offering of Units is the Registrant's sole source of capital, and since the final closing of limited partnership units was held on April 16, 1987, the Registrant will not receive additional funds from the offering. The Registrant was fully invested in eleven travel plaza properties by September 1988 and does not anticipate any further capital expenditures. On February 2, 1998, the Registrant entered into a letter of intent with Flying J. Inc. to sell substantially all of the Registrant's assets for cash of approximately $52 million. The sale is subject to certain conditions specified in the letter of intent, including the negotiation and execution of definitive sale and financing agreements with respect to the assets of the Registrant and the approval, by vote, of a majority of the limited partner interests. In accordance with the partnership agreement, sale of substantially all of the assets will result in dissolution of the Registrant and liquidation of remaining Registrant assets, net of liabilities. There can be no assurance as to the final terms of the proposed transaction, that the conditions will be satisfied or that the proposed transaction will be consummated. The limited partners will receive a proxy statement containing a complete description of the transaction when the sale and financing agreements are finalized. In February 1998, the Registrant sold the Boise, Idaho travel plaza (the Boise Plaza) to CFJ Properties for a cash sales price of $3,385,784. The above-negotiated sale price of approximately $52 million originally included the Boise Plaza and since this travel plaza was sold, the $52 million sale price will be reduced by approximately $3.4 million. Proceeds from the Boise Plaza sale were $65.50 per limited partnership unit and will be distributed to the limited partners in April 1998 as a partial return of their adjusted capital contribution. The Registrant accrued a subordinated real estate disposition fee equal to three percent of the selling price of the Boise, Idaho travel plaza (amounting to $101,574) payable to the general partner of the Registrant. The Registrant also declared a cash distribution from operations to the limited partners of $1,344,705 for the quarter ended March 31, 1998 (the period). During the period, all net proceeds not invested in real estate were invested in Government Agency discount notes and bank repurchase agreements (which are secured by United States Treasury and Government obligations). Total revenues during the period increased $1,759,796 primarily due to the gain on the sale of the Boise, Idaho travel plaza of $1,725,741. Proceeds from the sale generated a higher average cash balance during the period which resulted in an increase in interest and other income of $21,392 over the comparable period in 1997. During the period, base rental revenue from the travel plaza leases decreased to $1,037,825 from the prior period amount of $1,072,247 due to the February 1998 sale of the Boise, Idaho travel plaza. The Registrant received or accrued participating rentals of $460,326 for the period representing an increase over participating rentals of $413,241 for the comparable period of the prior year. On June 1, 1996, CFJ Properties (a lessee of the Registrant's travel plazas) curtailed its relationship with a large third party billing company for the trucking industry. The billing company requested changes to its contract that were unacceptable to CFJ Properties' management due to the significant long-term ramifications of the proposed change on CFJ Properties' future business. This resulted in reduced volume and margins, which contributed to low participating rental revenues in the quarter ended March 31, 1997 as compared to the quarter ended March 31, 1998. For the quarter ended March 31, 1998, total expenses increased by $78,953 primarily due to the accrual of the general partner's subordinated disposition fee described above, offset by a decrease in depreciation expense related to the sale of travel plaza property. The increase in total assets reflected in the Registrant's financial statements filed with this Report is mainly attributable to the cash proceeds received from the sale of the Boise, Idaho travel plaza (in excess if its depreciated cost) being held in temporary investment securities pending distribution to the limited partners. In the opinion of management, the financial information included in this report reflects all adjustments necessary for fair presentation. All such adjustments are of a normal recurring nature. FFCA INVESTOR SERVICES CORPORATION 86-B --------------------------------------- BALANCE SHEET - MARCH 31, 1998 ------------------------------ ASSETS Cash $100 Investment in Participating Income Properties 1986, L.P., at cost 100 ---- Total Assets $200 ==== LIABILITY Payable to Parent $100 ---- STOCKHOLDER'S EQUITY Common Stock; $l par value; 100 shares authorized, issued and outstanding 100 ---- Liability and Stockholder's Equity $200 ==== Note: FFCA Investor Services Corporation 86-B (86-B) was organized on June 23, 1986 to act as the assignor limited partner in Participating Income Properties 1986, L.P. (PIP-86). The assignor limited partner is the owner of record of the limited partnership units of PIP-86. All rights and powers of 86-B have been assigned to the holders, who are the registered and beneficial owners of the units. Other than to serve as assignor limited partner, 86-B has no other business purpose and will not engage in any other activity or incur any debt. SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have caused this report to be signed on their behalf by the undersigned thereunto duly authorized. PARTICIPATING INCOME PROPERTIES 1986, L.P. By FFCA MANAGEMENT COMPANY LIMITED PARTNERSHIP General Partner By PERIMETER CENTER MANAGEMENT COMPANY Corporate General Partner Date: May 11, 1998 By /s/ John Barravecchia -------------------------------------------------- John Barravecchia, Chief Financial Officer SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the co-registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FFCA INVESTOR SERVICES CORPORATION 86-B Date: May 11, 1998 By /s/ John Barravecchia ----------------------------------------------------- John Barravecchia, President EX-27.1 2 FINANCIAL DATA SCHEDULE FOR 1ST QUARTER 10-Q
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AS OF MARCH 31, 1998 AND THE STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 797977 PARTICIPATING INCOME PROPERTIES 1986, L.P. 1 U.S. DOLLARS 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 1 5,786,675 0 243,998 0 0 0 34,849,050 11,994,561 28,885,162 0 0 0 0 0 24,000,969 28,885,162 0 3,271,436 0 486,813 0 0 0 2,781,666 0 2,781,666 0 0 0 2,781,666 53.28 0
EX-27.2 3 FINANCIAL DATA SCHEDULE FOR 1ST QUARTER 10-Q
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AS OF MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH BALANCE SHEET. 797978 FFCA INVESTOR SERVICES CORPORATION 86-B 1 U.S. DOLLARS 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 1 100 0 0 0 0 0 0 0 200 0 0 0 0 100 0 200 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
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