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 June 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
JUNE 30, 1996 AND DECEMBER 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------- -----------
ASSETS
------
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 1,975,942 $ 3,649,977
RECEIVABLES FROM LESSEES 158,800 144,183
SECURED NOTES RECEIVABLE 145,589 157,911
PROPERTY SUBJECT TO OPERATING LEASES, at cost
Land 6,773,272 7,021,917
Buildings 29,669,322 29,669,322
Equipment 3,666,781 3,969,303
------------ ------------
Total 40,109,375 40,660,542
Less-Accumulated depreciation 12,926,831 12,233,701
------------ ------------
27,182,544 28,426,841
------------ ------------
Total assets $ 29,462,875 $ 32,378,912
============ ============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 1,359,638 $ 3,438,656
PAYABLE TO GENERAL PARTNER - 17,705
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 54,630 61,088
RENTAL DEPOSITS 114,400 114,400
------------ ------------
Total liabilities 1,528,668 3,631,849
------------ ------------
MINORITY INTEREST (14,252) (13,436)
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General partner (151,354) (143,234)
Limited partners 28,099,813 28,903,733
------------ ------------
Total partners' capital 27,948,459 28,760,499
------------ ------------
Total liabilities and partners' capital $ 29,462,875 $ 32,378,912
============ ============
</TABLE>
<PAGE>
PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
6/30/96 6/30/95 6/30/96 6/30/95
------- ------- ------- -------
<S> <C> <C> <C> <C>
REVENUES:
Rental $1,072,247 $1,078,631 $2,150,878 $2,157,262
Participating rentals 458,003 471,521 926,338 922,873
Interest and other 22,556 42,701 47,333 85,163
Gain on sale of property - - 16,410 -
---------- ---------- ---------- ----------
1,552,806 1,592,853 3,140,959 3,165,298
---------- ---------- ---------- ----------
EXPENSES:
General partner fees 135,786 139,557 272,566 275,872
Depreciation 414,633 481,971 829,265 963,943
Operating 42,525 40,656 92,925 96,942
---------- ---------- ---------- ----------
592,944 662,184 1,194,756 1,336,757
---------- ---------- ---------- ----------
MINORITY INTEREST
IN INCOME 1,133 1,078 2,297 2,139
---------- ---------- ---------- ----------
NET INCOME $ 958,729 $ 929,591 $1,943,906 $1,826,402
========== ========== ========== ==========
NET INCOME ALLOCATED TO:
General partner $ 9,587 $ 9,296 $ 19,439 $ 18,264
Limited partners 949,142 920,295 1,924,467 1,808,138
---------- ---------- ---------- ----------
$ 958,729 $ 929,591 $1,943,906 $1,826,402
========== ========== ========== ==========
NET INCOME PER LIMITED
PARTNERSHIP UNIT (based on
51,687 units outstanding) $18.36 $17.81 $37.23 $34.98
====== ====== ====== ======
</TABLE>
<PAGE>
PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE SIX MONTHS ENDED JUNE 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 19,439 - 1,924,467 1,943,906
Distributions to partners (27,559) - (2,728,387) (2,755,946)
--------- ------ ----------- -----------
BALANCE, June 30, 1996 $(151,354) 51,687 $28,099,813 $27,948,459
========== ====== =========== ===========
</TABLE>
<PAGE>
PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
--------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,943,906 $ 1,826,402
Adjustments to net income:
Depreciation 829,265 963,943
Gain on sale of property (16,410) -
Minority interest in income 2,297 2,139
Change in assets and liabilities:
Increase in receivables from lessees (14,617) -
Decrease in payable to general partner (17,705) -
Decrease in accounts payable and
accrued liabilities (6,458) (45,602)
----------- -----------
Net cash provided by operating activities 2,720,278 2,746,882
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Principal collections on secured notes receivable 13,572 2,999
Proceeds from sale of property 430,192 -
----------- -----------
Net cash provided by investing activities 443,764 2,999
----------- -----------
CASH FLOWS FOR FINANCING ACTIVITIES:
Distributions to partners (4,834,964) (2,758,516)
Distributions to minority interest (3,113) (3,103)
----------- -----------
Net cash used in financing activities (4,838,077) (2,761,619)
----------- -----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS (1,674,035) (11,738)
CASH AND CASH EQUIVALENTS, beginning of period 3,649,977 3,433,132
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 1,975,942 $ 3,421,394
=========== ===========
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
- --------------------------------
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
---------------------------------------------
As of June 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
$1,359,216 for the quarter ended June 30, 1996 (the period), which,
combined with the first quarter distribution of $1,369,171 amounts to
$2,728,387 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 $1,072,247 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 $458,003 for the quarter ended June 30, 1996 as
compared to $471,521 for the same quarter of 1995. The $13,518 decrease in
participating rental revenue was due to an overall decrease in travel
plaza sales during the period. Total expenses decreased by $69,240 to
$592,944 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 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 - JUNE 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, L.P.
General Partner
By PERIMETER CENTER MANAGEMENT COMPANY
Corporate General Partner
Date: July 8, 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: July 8, 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 JUNE 30, 1996
AND THE STATEMENT OF INCOME FOR THE SIX MONTHS ENDED
JUNE 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 1,975,942
<SECURITIES> 0
<RECEIVABLES> 304,389
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 40,109,375
<DEPRECIATION> 12,926,831
<TOTAL-ASSETS> 29,462,875
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 27,948,459
<TOTAL-LIABILITY-AND-EQUITY> 29,462,875
<SALES> 0
<TOTAL-REVENUES> 3,140,959
<CGS> 0
<TOTAL-COSTS> 1,194,756
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,943,906
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,943,906
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,943,906
<EPS-PRIMARY> 37.23
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE BALANCE SHEET AS OF JUNE 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-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>
