-----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, HBEPyOTZ7kWcWnVq5S8o8CC03LfTA+7KNzjnC4pfQWdDcJKFidtzCrLRr/W9sOlV Bx59KKjr5Y4/lwCd/LAGng== 0000950147-99-000504.txt : 19990518 0000950147-99-000504.hdr.sgml : 19990518 ACCESSION NUMBER: 0000950147-99-000504 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 II LP CENTRAL INDEX KEY: 0000820806 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 860588505 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-18504 FILM NUMBER: 99626818 BUSINESS ADDRESS: STREET 1: 17207 N PERIMETER DR STREET 2: SCOTTSDALE PERIMETER DRIVE 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 88-C CENTRAL INDEX KEY: 0000820807 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 860588507 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-18512 FILM NUMBER: 99626819 BUSINESS ADDRESS: STREET 1: 17207 N PERIMETER DR STREET 2: SCOTTSDALE 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 10-Q 1 QTRLY REPORT FOR PERIOD ENDING 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 ________________________ Commission file number 0-18504 Commission file number 0-18512 PARTICIPATING INCOME PROPERTIES II, L.P. and FFCA INVESTOR SERVICES CORPORATION 88-C --------------------------------------------------- (Exact Name of Co-Registrants as Specified in Their Organizational Documents) Delaware 86-0588505 - ----------------------------------- ------------------------------ (Partnership State of Organization) (Partnership I.R.S. Employer Identification Number) Delaware 86-0588507 - ------------------------------------ ----------------------------- (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 I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. PARTICIPATING INCOME PROPERTIES II, L.P. BALANCE SHEETS (Note 1) MARCH 31, 1999 AND DECEMBER 31, 1998 (Unaudited) March 31, December 31, 1999 1998 ------------ ------------ ASSETS CASH AND CASH EQUIVALENTS $ 84,117,472 $ 3,852,514 RECEIVABLES FROM LESSEES 124,036 193,794 DEFERRED COSTS -- 236,461 PROPERTY SUBJECT TO OPERATING LEASES, at cost Land -- 11,709,570 Buildings -- 54,004,577 Equipment -- 3,832,921 ------------ ------------ -- 69,547,068 Less - Accumulated depreciation -- 23,169,556 ------------ ------------ -- 46,377,512 ------------ ------------ Total assets $ 84,241,508 $ 50,660,281 ============ ============ LIABILITIES AND PARTNERS' CAPITAL DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 1,974,738 $ 2,145,202 PAYABLE TO GENERAL PARTNERS -- 133,462 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 230,741 26,903 DEFERRED INCOME (Note 2) -- 320,031 ------------ ------------ Total liabilities 2,205,479 2,625,598 ------------ ------------ PARTNERS' CAPITAL (DEFICIT) (Note 1): General partners (241,478) (238,231) Limited partners 82,277,507 48,272,914 ------------ ------------ Total partners' capital 82,036,029 48,034,683 ------------ ------------ Total liabilities and partners' capital $ 84,241,508 $ 50,660,281 ============ ============ PARTICIPATING INCOME PROPERTIES II, L.P. STATEMENTS OF INCOME (Note 1) FOR THE THREE MONTHS ENDED MARCH 31, 1999 (The Final Period of Operations) AND MARCH 31, 1998 (Unaudited) 1999 1998 ----------- ---------- REVENUES: Rental (Note 2) $ 1,924,118 $1,865,905 Participating rentals 510,703 565,225 Interest and other 130,441 45,211 Gain on sale of property (Note 1) 34,325,990 -- ----------- ---------- 36,891,252 2,476,341 ----------- ---------- EXPENSES: General partner fees 197,213 211,036 Depreciation 382,179 613,233 Operating 53,970 62,945 ----------- ---------- 633,362 887,214 ----------- ---------- OPERATING INCOME 36,257,890 1,589,127 LIQUIDATION COSTS (Note 1) 262,496 -- ----------- ---------- NET INCOME $35,995,394 $1,589,127 =========== ========== NET INCOME ALLOCATED TO (Note 1): General partners $ 16,694 $ 15,891 Limited partners 35,978,700 1,573,236 ----------- ---------- $35,995,394 $1,589,127 =========== ========== NET INCOME PER LIMITED PARTNERSHIP UNIT (based on 82,834 units held by limited partners) (Note 1) $ 434.35 $ 18.99 =========== ========== PARTICIPATING INCOME PROPERTIES II, L.P. STATEMENT OF CHANGES IN PARTNERS' CAPITAL (Note 1) FOR THE THREE MONTHS ENDED MARCH 31, 1999 (The Final Period of Operations) (Unaudited) Limited Partners General ---------------------- Partners Number Total Amount of Units Amount Amount ------ -------- ------ ------ BALANCE, December 31, 1998 $(238,231) 82,834 $ 48,272,914 $ 48,034,683 Net income 16,694 -- 35,978,700 35,995,394 Distribution to partners, cash from operations (19,941) -- (1,974,107) (1,994,048) --------- ------ ------------ ------------ BALANCE, March 31, 1999 $(241,478) 82,834 $ 82,277,507 $ 82,036,029 ========= ====== ============ ============ PARTICIPATING INCOME PROPERTIES II, L.P. STATEMENTS OF CASH FLOWS (Note 1) FOR THE THREE MONTHS ENDED MARCH 31, 1999 (The Final Period of Operations) AND MARCH 31, 1998 (Unaudited) 1999 1998 ------------ ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 35,995,394 $ 1,589,127 Adjustments to net income: Depreciation 382,179 613,233 Gain on sale of property (34,325,990) -- Change in assets and liabilities: Decrease in receivables from lessees 69,758 10,000 Decrease in deferred costs 236,461 -- Decrease in payable to general partner (133,462) -- Increase (decrease) in accounts payable and accrued liabilities 203,838 (506) Decrease in deferred income (320,031) (68,555) ------------ ----------- Net cash provided by operating activities 2,108,147 2,143,299 ------------ ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Net proceeds from sale of property 80,321,323 -- ------------ ----------- CASH FLOWS FOR FINANCING ACTIVITIES: Partner distributions declared (1,994,048) (2,133,806) Decrease in distribution payable to limited partners (170,464) (19,678) ------------ ----------- Net cash used in financing activities (2,164,512) (2,153,484) ------------ ----------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 80,264,958 (10,185) CASH AND CASH EQUIVALENTS, beginning of period 3,852,514 3,984,265 ------------ ----------- CASH AND CASH EQUIVALENTS, end of period $ 84,117,472 $ 3,974,080 ============ =========== PARTICIPATING INCOME PROPERTIES II, L.P. Notes to Financial Statements March 31, 1999 1) PARTNERSHIP LIQUIDATION: On March 22, 1999, Participating Income Properties II, L.P. (the Partnership) sold substantially all of the Partnership's assets (those assets comprising the travel plazas) and recognized a gain of approximately $34.3 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. In accordance with the partnership agreement, all sale proceeds have been allocated to the limited partners. In April 1999, the Managing 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 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 Managing General Partner estimates that the liquidating distribution will range from approximately $982 to $1,015 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. 2) DEFERRED INCOME: In March 1999, the Partnership recognized approximately $320,000 of income previously deferred (rental enhancement income) in connection with the sale of the travel plaza properties. This revenue is included in rental revenue in the Partnership's 1999 statement of operations. PART I - FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Participating Income Properties II, 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 $80,460,000. 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 $34.3 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. 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 Managing 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 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 Managing General Partner estimates that the liquidating distribution will range from approximately $982 to $1,015 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 to the limited partners of $1,974,107 for the quarter ended March 31, 1999 (the period) representing travel plaza operations through the date of the sale of the travel plazas on March 22, 1999. During the period, all net proceeds not invested in travel plaza property 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 $1,604,087. Base rental revenue was lower in 1999 because the travel plazas were sold prior to the end of the quarter. Overall rental revenue for the period also includes the recognition of approximately $320,000 of income previously deferred (rental enhancement income) that was recognized during the period. The amount recognized in the comparable period was approximately $69,000, with the increase resulting from the recognition of the remaining amount of deferred rental enhancement income in conjunction with the sale of the travel plaza properties. In addition, the Registrant received or accrued participating rentals of $510,703 for the period representing a decrease from participating rentals of $565,225 for the comparable period in 1998, primarily related to the sale of the travel plaza properties prior to the end of the quarter. Operating expenses for the quarter ended March 31, 1999 decreased by $253,852 from the comparable period of the prior year primarily due to a decrease in depreciation expense. Depreciation expense was lower this period due to the sale of travel plaza property. The increase in total assets reflected in the Registrant's 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 88-C BALANCE SHEET - MARCH 31, 1999 ASSETS Cash $100 Investment in Participating Income Properties II, 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 88-C (88-C) was organized on August 11, 1987 to act as the assignor limited partner in Participating Income Properties II, L.P. (PIP-II). The assignor limited partner is the owner of record of the limited partnership units of PIP-II. All rights and powers of 88-C have been assigned to the holders, who are the registered and beneficial owners of the units. Other than to serve as assignor limited partner, 88-C 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 II, L.P. By FRANCHISE FINANCE CORPORATION OF AMERICA II 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 88-C 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. 820806 PARTICIPATING INCOME PROPERTIES II, L.P. 1 U.S. DOLLARS 3-MOS DEC-31-1999 MAR-31-1999 1 84,117,472 0 124,036 0 0 0 0 0 84,241,508 0 0 0 0 0 82,036,029 84,241,508 0 36,891,252 0 633,362 0 0 0 35,995,394 0 35,995,394 0 0 0 35,995,394 434.35 0
EX-27.2 3 FINANCIAL DATA SCHEDULE FOR 1ST QUARTER 10-Q
5 THIS SCHEDULE 820807 FFCA INVESTOR SERVICES CORPORATION 88-C 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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