-----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, IcAUSmqTY2eo4nPJ0gHqqx+OJBddzaemkXRu4Qqdyebl8ONaTh4soshDNgrptkyo JeCQv92S3ruguWmNw3p8gg== 0000950147-98-000869.txt : 19981105 0000950147-98-000869.hdr.sgml : 19981105 ACCESSION NUMBER: 0000950147-98-000869 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981104 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PARTICIPATING INCOME PROPERTIES III LTD PARTNERSHIP CENTRAL INDEX KEY: 0000865828 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 860665681 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-20151 FILM NUMBER: 98737322 BUSINESS ADDRESS: STREET 1: 17207 N PERIMETER DR STREET 2: THE PERIMERTER CENTER CITY: SCOTTSDALE STATE: AZ ZIP: 85255 BUSINESS PHONE: 6025854500 MAIL ADDRESS: STREET 1: 17207 N PERIMETER DR CITY: SCOTTSDALE STATE: AZ ZIP: 852555402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FFCA PIP III INVESTOR SERVICES CORP CENTRAL INDEX KEY: 0000865829 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 86055605 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-35868-01 FILM NUMBER: 98737323 BUSINESS ADDRESS: STREET 1: 17202 N PERIMETER DR STREET 2: THE PERIMETER CENTER CITY: SCOTTSDALE STATE: AZ ZIP: 85255 BUSINESS PHONE: 6029478447 MAIL ADDRESS: STREET 1: 17207 N PERIMETER DR CITY: SCOTTSDALE STATE: AZ ZIP: 852555402 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 September 30, 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 0-20151 Commission file number 33-35868-01 PARTICIPATING INCOME PROPERTIES III LIMITED PARTNERSHIP and FFCA/PIP III INVESTOR SERVICES CORPORATION - -------------------------------------------------------------------------------- (Exact Name of Co-Registrants as Specified in Their Organizational Documents) Delaware 86-0665681 - -------------------------------------------------------------------------------- (Partnership State of Organization) (Partnership I.R.S. Employer Identification Number) Delaware 86-0555605 - -------------------------------------------------------------------------------- (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 1. FINANCIAL STATEMENTS. PARTICIPATING INCOME PROPERTIES III LIMITED PARTNERSHIP BALANCE SHEETS SEPTEMBER 30, 1998 AND DECEMBER 31, 1997 (Unaudited) September 30, December 31, 1998 1997 ------------- ------------ ASSETS CASH AND CASH EQUIVALENTS $ 478,090 $ 635,446 RECEIVABLES FROM LESSEES 55,000 44,000 MORTGAGE LOAN INTEREST RECEIVABLE 45,208 45,208 DEFERRED COSTS 140,588 -- MORTGAGE LOAN RECEIVABLE 7,750,000 7,750,000 PROPERTY SUBJECT TO OPERATING LEASES, at cost Land 2,684,138 2,684,138 Buildings 11,010,862 11,010,862 Equipment 947,838 947,838 ------------ ------------ 14,642,838 14,642,838 Less - Accumulated depreciation 2,832,378 2,496,576 ------------ ------------ 11,810,460 12,146,262 ------------ ------------ Total assets $ 20,279,346 $ 20,620,916 ============ ============ LIABILITIES AND PARTNERS' CAPITAL DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 579,620 $ 579,590 RENTAL DEPOSITS AND OTHER 247,470 253,269 ------------ ------------ Total liabilities 827,090 832,859 ------------ ------------ PARTNERS' CAPITAL (DEFICIT): General partner (25,045) (21,687) Limited partners 19,477,301 19,809,744 ------------ ------------ Total partners' capital 19,452,256 19,788,057 ------------ ------------ Total liabilities and partners' capital $ 20,279,346 $ 20,620,916 ============ ============ PARTICIPATING INCOME PROPERTIES III LIMITED PARTNERSHIP STATEMENTS OF INCOME FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (Unaudited)
Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended 9/30/98 9/30/97 9/30/98 9/30/97 ------------ ------------ ----------- ----------- REVENUES: Rental $ 394,870 $ 394,870 $1,184,610 $1,184,610 Participating rentals 167,629 153,436 442,157 401,758 Mortgage loan interest 135,625 135,625 406,875 406,875 Interest and other 5,196 5,524 17,578 16,867 ---------- ---------- ---------- ---------- 703,320 689,455 2,051,220 2,010,110 ---------- ---------- ---------- ---------- EXPENSES: General partner fees 91,170 83,110 207,709 185,627 Depreciation 111,934 111,934 335,802 335,801 Operating 26,876 21,073 87,699 68,663 ---------- ---------- ---------- ---------- 229,980 216,117 631,210 590,091 ---------- ---------- ---------- ---------- NET INCOME $ 473,340 $ 473,338 $1,420,010 $1,420,019 ========== ========== ========== ========== NET INCOME ALLOCATED TO: General partner $ 4,733 $ 4,733 $ 14,200 $ 14,200 Limited partners 468,607 468,605 1,405,810 1,405,819 ---------- ---------- ---------- ---------- $ 473,340 $ 473,338 $1,420,010 $1,420,019 ========== ========== ========== ========== NET INCOME PER LIMITED PARTNERSHIP UNIT (based on 26,709 units held by limited partners) $ 17.54 $ 17.54 $ 52.63 $ 52.63 ========== ========== ========== ==========
PARTICIPATING INCOME PROPERTIES III LIMITED PARTNERSHIP STATEMENT OF CHANGES IN PARTNERS' CAPITAL FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 (Unaudited)
Limited Partners General ---------------------- Partner Number Total Amount of Units Amount Amount ------ -------- ------ ------ BALANCE, December 31, 1997 $ (21,687) 26,709 $ 19,809,744 $ 19,788,057 Net income 14,200 -- 1,405,810 1,420,010 Distributions to partners (17,558) -- (1,738,253) (1,755,811) ---------- -------- ------------ ------------ BALANCE, September 30, 1998 $ (25,045) 26,709 $ 19,477,301 $ 19,452,256 ========== ======== ============ ============
PARTICIPATING INCOME PROPERTIES III LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (Unaudited) 1998 1997 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,420,010 $ 1,420,019 Adjustments to net income: Depreciation 335,802 335,801 Change in assets and liabilities: Increase in receivables from lessees (11,000) (12,000) Increase in deferred costs (140,588) -- Decrease in payable to general partner -- (7,720) Decrease in rental deposits and other (5,799) (5,281) ----------- ----------- Net cash provided by operating activities 1,598,425 1,730,819 CASH FLOWS FOR FINANCING ACTIVITIES: Distributions to partners (1,755,781) (1,755,779) ----------- ----------- NET DECREASE IN CASH AND CASH EQUIVALENTS (157,356) (24,960) CASH AND CASH EQUIVALENTS, beginning of period 635,446 651,261 ----------- ----------- CASH AND CASH EQUIVALENTS, end of period $ 478,090 $ 626,301 =========== =========== PART I - FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- On February 2, 1998, Participating Income Properties III Limited Partnership, a Delaware limited partnership, (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 $27 million. Subsequently, the Registrant entered into purchase agreements with respect thereto on September 4, 1998. In accordance with the partnership agreement, sale of substantially all of the assets would result in dissolution of the partnership and liquidation of the Registrant's remaining assets, net of liabilities. The limited partners have received a proxy statement describing the proposed transaction and were asked to consent to the proposed transaction by October 26, 1998. The following is a summary of the results of the voting: 16,193 units For, 1,470 units Against, 377 units Abstain. An affirmative vote of limited partners holding a majority of the partnership units was achieved. In addition to the majority vote, certain other conditions and contingencies must now be satisfied prior to the consummation of the sale transaction as set forth in the letter of intent between the Registrant and Flying J. Inc. Among these conditions are the finalization of financing arrangements by Flying J. Inc. in order for it to complete the purchase of the assets of the Registrant. The sale and subsequent liquidation of the Registrant will occur as soon as practical if, and to the extent that, all conditions and contingencies have been satisfied or waived. There can be no assurance as to whether or when the transaction will be consummated. The Registrant declared a cash distribution to the limited partners of $579,421 for the quarter ended September 30, 1998 (the period) which, combined with the first and second quarter distributions of $1,158,832, amounts to $1,738,253 year-to-date. During the period, all net proceeds not invested in travel plaza property and the mortgage loan 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 and mortgage loan interest income pursuant to its travel plaza lease and loan arrangements in the amount of $530,495, which remains unchanged from the prior period (year-to-date base rental revenue and mortgage loan interest income are similarly unchanged). In addition, the Registrant received or accrued participating rentals of $167,629 for the quarter ended September 30, 1998, representing an increase over participating rentals of $153,436 for the comparable period in 1997. The increase was due to increased volume at the travel plaza properties. Participating rentals for the corresponding year-to-date periods were similarly affected. Total expenses for the quarter ended September 30, 1998 increased $13,863 over the comparable period of the prior year due to an increase in general partner fees and operating expenses. As described more fully in the Registrant's partnership agreement, the general partner's management fee is based on the Registrant's disbursable cash (generally, cash receipts from operations less cash operating expenses) and is subordinated to a 9% return to the limited partners on their Adjusted Capital Contribution, as defined. The increase in the general partner's management fee of $8,060 during the period resulted directly from the increase in the Registrant's disbursable cash due to the increase in participating rental revenues. Operating expenses increased $5,803 during the period due to an increase in administrative expenses related to the proposed transaction. Expenses for the corresponding year-to-date periods were similarly affected. Net income for the three- and nine-month periods ended September 30, 1998 remained relatively unchanged from the comparable periods in 1997. The decrease in total assets reflected in the Registrant's financial statements filed with this report is mainly attributable to the depreciation allowance, which is deducted for accounting purposes from the cost of the assets on the Registrant's books. 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/PIP III INVESTOR SERVICES CORPORATION BALANCE SHEET - SEPTEMBER 30, 1998 ASSETS Cash $100 Investment in Participating Income Properties III Limited Partnership, 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/PIP III Investor Services Corporation (the Corporation) was incorporated on December 5, 1988, and amended on July 9, 1990 to act as the assignor limited partner in Participating Income Properties III Limited Partnership (PIP III). The assignor limited partner is the owner of record of the limited partnership units of PIP III. All rights and powers of the Corporation have been assigned to the holders, who are the registered and beneficial owners of the units. Other than to serve as assignor limited partner, the Corporation 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 III LIMITED PARTNERSHIP By FFCA PARTICIPATING MANAGEMENT COMPANY LIMITED PARTNERSHIP Managing General Partner By FRANCHISE FINANCE CORPORATION OF AMERICA III Corporate General Partner Date: October 30, 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/PIP III INVESTOR SERVICES CORPORATION Date: October 30, 1998 By /s/ John Barravecchia ------------------------------------------ John Barravecchia, President EX-27.1 2 FINANCIAL DATA SCHEDULE FOR 3RD QUARTER 10-Q
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AS OF SEPTEMBER 30, 1998 AND THE STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 865828 PARTICIPATING INCOME PROPERTIES III LIMITED PARTNERSHIP 1 U.S. DOLLARS 9-MOS DEC-31-1998 SEP-30-1998 1 478,090 0 100,208 0 0 0 14,642,838 2,832,378 20,279,346 0 0 0 0 0 19,452,256 20,279,346 0 2,051,220 0 631,210 0 0 0 1,420,010 0 1,420,010 0 0 0 1,420,010 52.63 0
EX-27.2 3 FINANCIAL DATA SCHEDULE FOR 3RD QUARTER 10-Q
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AS OF SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH BALANCE SHEET. 865829 FFCA/PIP III INVESTOR SERVICES CORPORATION 1 U.S. DOLLARS 9-MOS DEC-31-1998 SEP-30-1998 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
-----END PRIVACY-ENHANCED MESSAGE-----