-----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, NELoM+Vs3+vJLi/y0ifl2m21xX6MqudZUuVRtBJGwlo2WF3hnc2v8z11WeHza7PY +CP7xljpofyJu41PLLpUCw== 0000950147-99-000501.txt : 19990518 0000950147-99-000501.hdr.sgml : 19990518 ACCESSION NUMBER: 0000950147-99-000501 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990517 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: 99626803 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: 99626804 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 QTRLY REPORT FOR PERIOD ENDED 03-31-99 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 ---------------------- [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ________________ to ____________________ Commission file number 0-16720 Commission file number 0-16721 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 (480) 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 I. FINANCIAL STATEMENTS. PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE CONSOLIDATED BALANCE SHEETS (Note 1) MARCH 31, 1999 AND DECEMBER 31, 1998 (Unaudited) March 31, December 31, 1999 1998 ----------- ------------ ASSETS CASH AND CASH EQUIVALENTS $47,529,241 $ 2,202,940 RECEIVABLES FROM LESSEES 99,940 146,270 SECURED NOTES RECEIVABLE 63,938 66,595 DEFERRED COSTS -- 208,904 PROPERTY SUBJECT TO OPERATING LEASES, at cost Land 533,040 5,766,190 Buildings 1,266,113 28,456,079 Equipment -- 626,781 ----------- ------------ 1,799,153 34,849,050 Less - Accumulated depreciation 575,957 12,884,742 ----------- ------------ 1,223,196 21,964,308 ----------- ------------ Total assets $48,916,315 $ 24,589,017 =========== ============ LIABILITIES AND PARTNERS' CAPITAL DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 1,193,007 $ 1,282,310 PAYABLE TO GENERAL PARTNER 101,574 177,582 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 142,779 20,328 RENTAL DEPOSITS 38,019 114,400 ----------- ------------ Total liabilities 1,475,379 1,594,620 ----------- ------------ MINORITY INTEREST 8,963 (15,705) ----------- ------------ PARTNERS' CAPITAL (DEFICIT) (Note 1): General partner 1,470,009 (166,879) Limited partners 45,961,964 23,176,981 ----------- ------------ Total partners' capital 47,431,973 23,010,102 ----------- ------------ Total liabilities and partners' capital $48,916,315 $ 24,589,017 =========== ============ PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE CONSOLIDATED STATEMENTS OF INCOME (Note 1) FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (Unaudited) 1999 1998 ------------ ----------- REVENUES: Rental $ 893,351 $ 1,037,825 Participating rentals 407,648 460,326 Interest and other 74,312 47,544 Gain on sale of property (Note 1) 24,870,572 1,725,741 ------------ ----------- 26,245,883 3,271,436 ------------ ----------- EXPENSES: General partner fees 119,134 235,910 Depreciation 202,243 300,940 Operating 50,231 51,537 ------------ ----------- 371,608 588,387 ------------ ----------- OPERATING INCOME 25,874,275 2,683,049 LIQUIDATION COSTS (Note 1) (221,790) -- MINORITY INTEREST IN INCOME (26,034) (2,957) ------------ ----------- NET INCOME $ 25,626,451 $ 2,680,092 ============ =========== NET INCOME ALLOCATED TO (Note 1): General partner $ 1,648,934 $ 26,801 Limited partners 23,977,517 2,653,291 ------------ ----------- $ 25,626,451 $ 2,680,092 ============ =========== NET INCOME PER LIMITED PARTNERSHIP UNIT (based on 51,687 units held by limited partners) (Note 1) $ 463.90 $ 51.33 ============ =========== PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (Note 1) FOR THE THREE MONTHS ENDED MARCH 31, 1999 (Unaudited) Limited Partners General ---------------------- Partner Number Total Amount of Units Amount Amount ------ -------- ------ ------ BALANCE, December 31, 1998 $ (166,879) 51,687 $ 23,176,981 $ 23,010,102 Net income 1,648,934 -- 23,977,517 25,626,451 Distribution to partners, cash from operations (12,046) -- (1,192,534) (1,204,580) ---------- ------- ------------ ------------ BALANCE, March 3l, 1999 $1,470,009 51,687 $ 45,961,964 $ 47,431,973 ========== ======= ============ ============ PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE CONSOLIDATED STATEMENTS OF CASH FLOWS (Note 1) FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (Unaudited) 1999 1998 ------------ ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 25,626,451 $ 2,680,092 Adjustments to net income: Depreciation 202,243 300,940 Gain on sale of property (24,870,572) (1,725,741) Minority interest in income 26,034 2,957 Change in assets and liabilities: Decrease in receivables from lessees 46,330 10,000 Decrease in deferred costs 208,904 -- Increase (decrease) in payable to general partner (76,008) 101,574 Increase in accounts payable and accrued liabilities 122,451 1,410 Decrease in rental deposits (76,381) -- ------------ ----------- Net cash provided by operating activities 1,209,452 1,371,232 ------------ ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of property 45,409,441 3,385,784 Principal collections on secured notes receivable 2,657 8,179 ------------ ----------- Net cash provided by investing activities 45,412,098 3,393,963 ------------ ----------- CASH FLOWS FOR FINANCING ACTIVITIES: Partner distributions declared (1,204,580) (1,358,287) Return of capital to limited partners declared -- (3,385,784) Increase (decrease) in distribution payable (89,303) 3,364,404 Distribution to minority interest (1,366) (1,533) ------------ ----------- Net cash used in financing activities (1,295,249) (1,381,200) ------------ ----------- NET INCREASE IN CASH AND CASH EQUIVALENTS 45,326,301 3,383,995 CASH AND CASH EQUIVALENTS, beginning of period 2,202,940 2,402,680 ------------ ----------- CASH AND CASH EQUIVALENTS, end of period $ 47,529,241 $ 5,786,675 ============ =========== PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE Note to Consolidated Financial Statements March 31, 1999 1) SUBSEQUENT EVENT AND PARTNERSHIP LIQUIDATION: On March 22, 1999, Participating Income Properties 1986 L.P. (the Partnership) sold substantially all of the Partnership's assets (those assets comprising nine of the ten travel plazas) and recognized a gain of approximately $24.9 million on the sale. In April 1999, the Partnership sold the Ellensburg, Washington travel plaza and recognized a gain of approximately $1.8 million on the sale. The sale of the travel plazas represents the disposition of substantially all of the Partnership's assets and the Partnership has no further liability in connection with any of the travel plazas. Sale proceeds have been allocated to the General Partner and the limited partners in accordance with the partnership agreement. In April 1999, the General Partner began the Partnership liquidation process, which includes the distribution of assets to the limited partners in accordance with the partnership agreement. The liquidation of the Partnership is expected to be completed in June 1999 and an estimate of the cost of the liquidation has been included in the Partnership's consolidated statement of operations. The net amount ultimately available for distribution to the limited partners depends on various factors, such as the actual cost of the liquidation and the amount of interest income from temporary investments received by the Partnership until completely liquidated. The General Partner estimates that the liquidating distribution will approximate $924 per limited partnership unit of which approximately $6 per unit will be deposited in a trust (the Trust Fund) with a bank. The Trust Fund, including interest income, would be available to satisfy claims made directly or indirectly with respect to the liquidation of the Partnership for a period of up to 24 months following the effective date of the trust agreement, at which time, as long as there are no unresolved claims, the remaining balance of the Trust Fund will be disbursed to the limited partners. PART I - FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Participating Income Properties 1986, L.P., a Delaware limited partnership, (the Registrant), entered into purchase agreements with Flying J Inc. on September 4, 1998 to sell substantially all of the Registrant's assets (those assets comprising the travel plazas) for cash of $45,508,869 (the original sales price of $48,534,216 for the ten travel plazas, less the Ellensburg, Washington travel plaza referred to below). The limited partners received a consent solicitation statement describing the proposed transaction and an affirmative vote of the limited partners holding a majority of the partnership units was achieved on October 26, 1998. The sale transaction was completed on March 22, 1999 and the Registrant recognized a gain of approximately $24.9 million on the sale. The net cash proceeds from this sale are being held in U.S. government securities pending distribution to the limited partners. In April 1999, the Partnership sold the Ellensburg, Washington travel plaza to its lessee for a sales price of $3,025,347, which resulted in a gain of approximately $1.8 million. The sale of the travel plazas represents the disposition of substantially all of the Registrant's assets and the Registrant has no further liability in connection with any of the travel plazas. In April 1999, the General Partner began the Registrant liquidation process that includes the distribution of assets to the limited partners in accordance with the partnership agreement. The liquidation of the Registrant is expected to be completed in June 1999 and an estimate of the cost of the liquidation has been included in the Registrant's consolidated statement of operations. The net amount ultimately available for distribution to the limited partners depends on various factors, such as the actual cost of the liquidation and the amount of interest income from temporary investments received by the Registrant until completely liquidated. The General Partner estimates that the liquidating distribution will approximate $924 per limited partnership unit of which approximately $6 per unit will be deposited in a trust (the Trust Fund) with a bank. The Trust Fund, including interest income, would be available to satisfy claims made directly or indirectly with respect to the liquidation of the Registrant for a period of up to 24 months following the effective date of the trust agreement, at which time, as long as there are no unresolved claims, the remaining balance of the Trust Fund will be disbursed to the limited partners. The Registrant declared a cash distribution from operations to the limited partners of $1,192,534 for the quarter ended March 31, 1999 (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). During the period, the Registrant received base rental revenue pursuant to its travel plaza lease arrangements in the amount of $893,351. Rental revenue was lower in 1999 because all but one of the travel plazas were sold prior to the end of the quarter. The Registrant received or accrued participating rentals of $407,648 for the period representing a decrease from participating rentals of $460,326 for the comparable period of 1998, primarily related to the sale of the travel plaza properties. Operating expenses for the quarter ended March 31, 1999, decreased $216,779 from the comparable period of the prior year primarily due to the decrease in the general partner fee and depreciation expense. The General Partner's management fee was higher in 1998 due to the Registrant's sale of the Boise, Idaho travel plaza in February 1998 which resulted in a $101,574 subordinated real estate disposition fee payable to the General Partner. Depreciation expense was lower this period due to the sale of the travel plaza property. The increase in total assets reflected in the Registrant's consolidated financial statements filed with this Report is attributable to the cash proceeds received from the sale of travel plaza property (prior to distribution of the proceeds 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, except those adjustments related to the liquidation and dissolution of the Registrant. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. The financial instruments held by the Registrant at March 31, 1999 consist of cash equivalents (primarily investments in U.S. Treasury securities or repurchase agreements that are collateralized by U.S. Treasury and government obligations) and receivables from lessees that are short- term in nature and do not subject the Registrant to a material exposure to changes in interest rates. FFCA INVESTOR SERVICES CORPORATION 86-B BALANCE SHEET - MARCH 31, 1999 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 5, 1999 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 5, 1999 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, 1999 AND THE STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1999 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-31-1999 MAR-31-1999 1 47,529,241 0 163,878 0 0 0 1,799,153 575,957 48,916,315 0 0 0 0 0 47,431,973 48,916,315 0 26,245,883 0 371,608 0 0 0 25,626,451 0 25,626,451 0 0 0 25,626,451 463.90 0
EX-27.2 3 FINANCIAL DATA SCHEDULE FOR 1ST QUARTER 10-Q
5 THIS SCHEDULE 797978 FFCA INVESTOR SERVICES CORPORATION 86-B 1 U.S. DOLLARS 3-MOS DEC-31-1999 MAR-31-1999 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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