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, 1996
--------------------------------------------
[ ] 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
----- -----
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item l. Financial Statements.
------- ---------------------
PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
(Unaudited)
September 30, December 31,
1996 1995
------------ ------------
ASSETS
------
CASH AND CASH EQUIVALENTS $ 2,394,341 $ 3,649,977
RECEIVABLES FROM LESSEES 158,000 144,183
SECURED NOTES RECEIVABLE 138,545 157,911
PROPERTY SUBJECT TO OPERATING LEASES, at cost
Land 6,773,272 7,021,917
Buildings 29,669,322 29,669,322
Equipment 626,781 3,969,303
------------ ------------
Total 37,069,375 40,660,542
Less-Accumulated depreciation 10,608,727 12,233,701
------------ ------------
26,460,648 28,426,841
------------ ------------
Total assets $ 29,151,534 $ 32,378,912
============ ============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 1,391,911 $ 3,438,656
PAYABLE TO GENERAL PARTNER -- 17,705
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 52,914 61,088
RENTAL DEPOSITS 114,400 114,400
------------ ------------
Total liabilities 1,559,225 3,631,849
------------ ------------
MINORITY INTEREST (14,594) (13,436)
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General partner (154,769) (143,234)
Limited partners 27,761,672 28,903,733
------------ ------------
Total partners' capital 27,606,903 28,760,499
------------ ------------
Total liabilities and partners' capital $ 29,151,534 $ 32,378,912
============ ============
<PAGE>
PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
9/30/96 9/30/95 9/30/96 9/30/95
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Rental $1,072,248 $1,078,631 $3,223,126 $3,235,893
Participating rentals 481,911 521,156 1,408,249 1,444,029
Interest and other 25,627 42,653 72,960 127,816
Gain on sale of property 59,548 -- 75,958 --
---------- ---------- ---------- ----------
1,639,334 1,642,440 4,780,293 4,807,738
---------- ---------- ---------- ----------
EXPENSES:
General partner fees 139,026 144,158 411,592 420,030
Depreciation 401,444 474,629 1,230,709 1,438,573
Operating 33,479 38,245 126,404 135,186
---------- ---------- ---------- ----------
573,949 657,032 1,768,705 1,993,789
---------- ---------- ---------- ----------
MINORITY INTEREST
IN INCOME 1,239 1,155 3,536 3,294
---------- ---------- ---------- ----------
NET INCOME $1,064,146 $ 984,253 $3,008,052 $2,810,655
========== ========== ========== ==========
NET INCOME ALLOCATED TO:
General partner $ 10,641 $ 9,843 $ 30,081 $ 28,107
Limited partners 1,053,505 974,410 2,977,971 2,782,548
---------- ---------- ---------- ----------
$1,064,146 $ 984,253 $3,008,052 $2,810,655
========== ========== ========== ==========
NET INCOME PER LIMITED
PARTNERSHIP UNIT (based on
51,687 units held by limited partners) $ 20.38 $ 18.85 $ 57.62 $ 53.83
========== ========== ========== ==========
</TABLE>
<PAGE>
PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Limited Partners
General -----------------------------
Partner Number Total
Amount of Units Amount Amount
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1995 $ (143,234) 51,687 $ 28,903,733 $ 28,760,499
Net income 30,081 -- 2,977,971 3,008,052
Distributions to partners (41,616) -- (4,120,032) (4,161,648)
------------ ------------ ------------ ------------
BALANCE, September 30, 1996 $ (154,769) 51,687 $ 27,761,672 $ 27,606,903
============ ============ ============ ============
</TABLE>
<PAGE>
PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,008,052 $ 2,810,655
Adjustments to net income:
Depreciation 1,230,709 1,438,573
Gain on sale of property (75,958) --
Minority interest in income 3,536 3,294
Change in assets and liabilities:
Increase in receivables from lessees (13,817) (10,000)
Decrease in payable to general partner (17,705) --
Decrease in accounts payable and
accrued liabilities (8,174) (54,043)
----------- -----------
Net cash provided by operating activities 4,126,643 4,188,479
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Principal collections on secured notes receivable 19,366 5,489
Proceeds from sale of property 811,442 --
----------- -----------
Net cash provided by investing activities 830,808 5,489
----------- -----------
CASH FLOWS FOR FINANCING ACTIVITIES:
Distributions to partners (6,208,393) (4,170,192)
Distributions to minority interest (4,694) (4,733)
----------- -----------
Net cash used in financing activities (6,213,087) (4,174,925)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (1,255,636) 19,043
CASH AND CASH EQUIVALENTS, beginning of period 3,649,977 3,433,132
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 2,394,341 $ 3,452,175
=========== ===========
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
- --------------------------------
Item 2. Management's Discussion and Analysis of
- ------- Financial Condition and Results of Operations
---------------------------------------------
As of September 30, 1996, 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.
The Registrant declared a cash distribution to the limited partners of
$1,391,645 for the quarter ended September 30, 1996 (the period), which,
combined with the first and second quarterly distributions of $2,728,387
amounts to $4,120,032 year to date. 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, base rental revenue from the travel plaza leases
amounted to $1,072,248 as compared to $1,078,631 for the same period of
the prior year. In the first quarter of 1996, the Registrant sold a piece
of land on the Boise, Idaho travel plaza property, resulting in a monthly
reduction of $2,128 in rental revenue. The Registrant received or accrued
participating rentals of $481,911 for the period which were higher than
each of the previous three quarters. Participating rentals for the quarter
ended September 30, 1995 of $521,156 were especially high compared to the
four quarters that followed. Total expenses decreased by $83,083 to
$573,949 for the period primarily due to a decrease in depreciation
expense related to the sale of travel plaza equipment in the last twelve
months. The Registrant sold six equipment packages to lessees during the
period for a gain of $59,548. The Registrant does not anticipate any
significant changes in rental revenues related to the sale of the
equipment packages.
The decrease in total assets reflected in the Registrant's financial
statements filed with this Report is mainly attributable to the return of
capital to the limited partners from the sale of the Boise travel plaza
lodging facility and 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.
<PAGE>
FFCA INVESTOR SERVICES CORPORATION 86-B
---------------------------------------
BALANCE SHEET - SEPTEMBER 30, 1996
----------------------------------
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.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly 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: October 7, 1996 By /s/ John R. Barravecchia
---------------------------------------------
John R. Barravecchia, Chief Financial Officer
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
co-registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
FFCA INVESTOR SERVICES CORPORATION 86-B
Date: October 7, 1996 By /s/ John R. Barravecchia
---------------------------------------
John R. Barravecchia, President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE BALANCE SHEET AS OF SEPTEMBER 30, 1996 AND
THE STATEMENT OF INCOME FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000797977
<NAME> PARTICIPATING INCOME PROPERTIES 1986, L.P.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 2,394,341
<SECURITIES> 0
<RECEIVABLES> 296,545
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 37,069,375
<DEPRECIATION> 10,608,727
<TOTAL-ASSETS> 29,151,534
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 27,606,903
<TOTAL-LIABILITY-AND-EQUITY> 29,151,534
<SALES> 0
<TOTAL-REVENUES> 4,780,293
<CGS> 0
<TOTAL-COSTS> 1,768,705
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,008,052
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,008,052
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,008,052
<EPS-PRIMARY> 57.62
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE BALANCE SHEET AS OF SEPTEMBER 30, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
BALANCE SHEET.
</LEGEND>
<CIK> 0000797978
<NAME> FFCA INVESTOR SERVICES CORPORATION 86-B
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 100
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 200
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 100
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 200
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
