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, 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
MARCH 31, 1996 AND DECEMBER 31, 1995
(Unaudited)
March 31, December 31,
1996 1995
------------ ------------
ASSETS
------
CASH AND CASH EQUIVALENTS $ 1,975,103 $ 3,649,977
RECEIVABLES FROM LESSEES 164,206 144,183
SECURED NOTES RECEIVABLE 152,460 157,911
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 12,512,199 12,233,701
------------ ------------
27,597,176 28,426,841
------------ ------------
Total assets $ 29,888,945 $ 32,378,912
============ ============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 1,369,608 $ 3,438,656
PAYABLE TO GENERAL PARTNER -- 17,705
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 56,098 61,088
RENTAL DEPOSITS 114,400 114,400
------------ ------------
Total liabilities 1,540,106 3,631,849
------------ ------------
MINORITY INTEREST (13,836) (13,436)
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General partner (147,212) (143,234)
Limited partners 28,509,887 28,903,733
------------ ------------
Total partners' capital 28,362,675 28,760,499
------------ ------------
Total liabilities and partners' capital $ 29,888,945 $ 32,378,912
============ ============
<PAGE>
PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
1996 1995
---------- ----------
REVENUES:
Rental $1,078,631 $1,078,631
Participating rentals 468,335 451,352
Interest and other 24,777 42,462
Gain on sale of property 16,410 --
---------- ----------
1,588,153 1,572,445
---------- ----------
EXPENSES:
General partner fees 136,780 136,315
Depreciation 414,632 481,972
Operating 50,400 56,286
---------- ----------
601,812 674,573
---------- ----------
MINORITY INTEREST IN INCOME 1,164 1,061
---------- ----------
NET INCOME $ 985,177 $ 896,811
========== ==========
NET INCOME ALLOCATED TO:
General partner $ 9,852 $ 8,968
Limited partners 975,325 887,843
---------- ----------
$ 985,177 $ 896,811
========== ==========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(based on 51,687 units outstanding) $ 18.87 $ 17.18
========== ==========
<PAGE>
PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(Unaudited)
Limited Partners
General --------------------
Partner Number Total
Amount of Units Amount Amount
--------- ------ ----------- -----------
BALANCE, December 31, 1995 $(143,234) 51,687 $28,903,733 $28,760,499
Net income 9,852 - 975,325 985,177
Distribution to partners (13,830) - (1,369,171) (1,383,001)
--------- ------ ----------- -----------
BALANCE, March 3l, 1996 $(147,212) 51,687 $28,509,887 $28,362,675
========= ====== =========== ===========
<PAGE>
PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 985,177 $ 896,811
Adjustments to net income:
Depreciation 414,632 481,972
Gain on sale of property (16,410) --
Minority interest in income 1,164 1,061
Change in assets and liabilities:
Decrease (increase) in receivables from lessees (20,023) 3,000
Increase (decrease) in payable to general partner (17,705) 19,072
Increase (decrease) in accounts payable and
accrued liabilities (4,990) 3,110
----------- -----------
Net cash provided by operating activities 1,341,845 1,405,026
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Collection of note principal 6,702 1,784
Proceeds from sale of property 430,192 --
----------- -----------
Net cash provided by investing activities 436,894 1,784
----------- -----------
CASH FLOWS FOR FINANCING ACTIVITIES:
Distribution to partners (3,452,049) (1,379,871)
Distribution to minority interest (1,564) (1,542)
----------- -----------
Net cash used in financing activities (3,453,613) (1,381,413)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (1,674,874) 25,397
CASH AND CASH EQUIVALENTS, beginning of period 3,649,977 3,433,132
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 1,975,103 $ 3,458,529
=========== ===========
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
- --------------------------------
Item 2. Management's Discussion and Analysis of
- ------ Financial Condition and Results of Operations
---------------------------------------------
As of March 31, 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
$1,369,171 for the quarter ended March 31, 1996 (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, base rental revenue from the travel plaza leases
amounted to $1,078,631 which remained unchanged from the same period of
the prior year. In addition, the Registrant received or accrued
participating rentals of $468,335 for the first quarter of 1996 as
compared to $451,352 for the first quarter of 1995. The $16,983 increase
in percentage rentals was due to increased travel plaza sales. Interest
and other income decreased by $17,685 from the prior period in 1995 due to
a lower average cash balance invested. This is because the proceeds from
the sale of the Boise travel plaza lodging facility, which were invested
in temporary investment securities in 1995, were returned to the limited
partners in January 1996. Total expenses decreased to $601,812 for the
period from $674,573 for the quarter ended March 31, 1995 due primarily to
a decrease in depreciation expense resulting from the sale of one travel
plaza equipment package to the lessee upon expiration of the related
equipment lease term. In addition to the sale of this equipment package,
the Registrant sold a piece of land on the Boise, Idaho travel plaza
property to a third party for a net gain of $16,410.
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 - MARCH 31, 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: April 12, 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: April 12, 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 MARCH 31, 1996
AND THE STATEMENT OF INCOME FOR THE THREE MONTHS
ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 797977
<NAME> PARTICIPATING INCOME PROPERTIES 1986, L.P.
<MULTIPLIER> 1
<CURRENCY> U.S.DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 1,975,103
<SECURITIES> 0
<RECEIVABLES> 316,666
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 40,109,375
<DEPRECIATION> 12,512,199
<TOTAL-ASSETS> 29,888,945
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 28,362,675
<TOTAL-LIABILITY-AND-EQUITY> 29,888,945
<SALES> 0
<TOTAL-REVENUES> 1,588,153
<CGS> 0
<TOTAL-COSTS> 601,812
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 985,177
<INCOME-TAX> 0
<INCOME-CONTINUING> 985,177
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 985,177
<EPS-PRIMARY> 18.87
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE BALANCE SHEET AS OF MARCH 31, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
BALANCE SHEET.
</LEGEND>
<CIK> 797978
<NAME> FFCA INVESTOR SERVICES CORPORATION 86-B
<MULTIPLIER> 1
<CURRENCY> U.S.DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<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>
